Abstract Along with the mean sea level rise due to climate change, the sea level exhibits natural variations at a large number of different time scales. One of the most important is the one linked with the seasonal cycle. In the Northern Hemisphere winter, the sea level is as much as 20 cm below its summer values in some locations. It is customary to associate these variations with the seasonal cycle of the sea surface net heat flux which drives an upper-ocean thermal expansion creating a positive steric sea level anomaly. Here, using a novel framework based on steric sea level variance budget applied to observations and to the Estimating the Circulation and Climate of the Ocean state estimate, we demonstrate that the steric sea level seasonal cycle amplitude results from a balance between the seasonal sea surface net heat flux and the oceanic advective processes. Moreover, for up to 50% of the ocean surface, surface heat fluxes act to damp the seasonal steric sea level cycle amplitude, which is instead forced by oceanic advection processes. We also show that eddies play an important role in damping the steric sea level seasonal cycle. Our study contributes to a better understanding of the steric sea level mechanisms which is crucial to ensure accurate and reliable climate projections.