I'm reciprocating a dinner party for some new workmates, but I don't earn nearly as much as them and my home is much smaller and a bit run down, with much cheaper furniture. It's not dirty or broken - just not as nice, and the furniture is much cheaper.
How can I dress it up a bit on a budget for when I have them over?

I would say don't try to make your house into something its not. Your workmates should like you, not your financial standing.

I do agree with that answer above. But, I would like to add a few things.

Granted, you aren't trying to impress anyone. But, you do want people to feel comfortable and at home while they are there. Also, for them to be treated as guests. To be a guest in someone's home in the traditional sense, is very much like receiving a nice gift. You treat your guests as though you are giving them a gift. The warmth of your heart and your organization in preparing for such an event will accomplish the foregoing things.

Throws that look really nice can be put over couches or chairs. They can add a fresh look to a couch or a chair. Please put an ample supply of clean towels hanging in the bathroom that people will use. More than one towel. Guests will appreciate that.

It may not be the season for people requiring coats or jackets where you live, but if it is, then I would suggest having a place where they could hang their wraps rather than stacking them on a bed, chairs or couches.

If you have a pet such as a cat, then it would help to know if someone is allergic to cats. If someone is, then you make everything as clean as possible - carpets, floors, cushions, etc. Then, put the cat in the basement for the event or have a friend take care of the cat.

If you are having these workmates over in the evening, then having lit candles around can add a nice, classy touch.

Yours may not be a large group, but if it is, say ten to twenty people, then I would suggest arranging chairs so that everyone can mingle with everyone.

If you need to borrow anything from anyone else, please don't be afraid to ask. Plates, silverware, towels, decorations to hang or place on certain types of tables, live plants/flowers, even furniture, etc.

If having food, then you could have everyone bring something. Ask them and then assign it to them based upon what they would like to bring and what others are already bringing. It's easy to do. You could provide one, main thing, like a meat dish or beverages, and then have everyone else bring something else.

Music can play a very important part to a gathering. If you have some type of stereo equipment, then have music ready to play softly in the background. If you are lacking some type of music that you know would be popular, then I would suggest borrowing it.

I list what I have in an effort to help you in preparing to have guests over to your home. I love to entertain. I live in a fairly nice, older home. Nothing too exciting as far as my furnishings are concerned. Lots of dead relatives furniture and stuff from rummage and garage sales.

I have the neighborhood Christmas Party at my home. I also have people over at Christmastime and other times of the year that I am mutually involved with concerning various clubs and organizations. I do everything that I have mentioned to you above. It's easy to spruce things up a bit in order to help to make people feel comfortable without having to cost you much money at all.

I find that just clearing off the counters of all clutter and putting out fresh flowers and candles adds to the atmosphere. Also, fragrance your home-oil burners provide a nice fragrance blast in only 5 minutes. Bath & Body works has a great selection of holiday fragrances.