Salary certificate & withholding tax

Taxes are the less favoured topics in HR / Payroll. And yet they are important. The risks lie with both the employer and the employees.

Employees often travel internationally - be it to their place of residence or to work, business trips or further training outside Switzerland.

I will support you on individual questions or comprehensively and in combination with social insurances and permits.

You can also book company workshops on these topics.

Salary certificate / salary statement

Many factors must interact on the salary statement so that it is complete at the end of the year or at the end of employment:

Remuneration elements and benefits, deductions, expenses
Net to gross
Expatriates with foreign currency conversions
Correct mapping of assignments abroad
Remarks, enclosures, additional sheets (e.g. employment stock)
Training / further education and retraining
Home office compensation etc.
Voluntary information for special groups such as cross-border commuters
Multiple salary statements for transparent allocation of remuneration for a change of tax status from unlimited to limited and vice versa

Would you like a workshop or a review? Or have you noticed yourself that elements have been forgotten? This can have enormous consequences for the company and the employees concerned – up to and including criminal and after-tax proceedings.

As a member of the SSK’s (Swiss tax conference) working group on salary certificates (AGLA = Working Group of salary statements), I remain on the case.

I will support you with adjustments while negotiating with the relevant authorities and will gladly make suggestions for employee information.

Expense regulations

The correct treatment of expenses is a permanent topic. The distinction from the reimbursement of professional expenses and taxable benefits is not always clear, depending on the industry and design.

Depending on the size of the company, it may be worthwhile to have an expense regulation (basic regulations, field service regulations, additional regulations for management, etc.) approved by the tax authorities. Often, this then facilitates the preparation of salary statements and creates a basis for equal treatment of expenses for your employees.

The Swiss Tax Conference published an amended sample regulation on 13 Dec 2021. The focus is primarily on various current topics and clarifications. For details, I refer to the blog published on 14 December 2021. Especially in times of home office – also after Covid – considerations must be made regarding compensation of expenses which occur while working at home. Perhaps one or the other solution / benefit can also be approved by the authorities as tax free?

The current sample regulations have been valid since 1 May 2024.

Do you have any changes regarding the reimbursement of business expenses? Would you welcome a check? And then possibly an adjustment and (re)approval? The implementation in practice regarding processes and correct mapping in the payroll accounting does not happen by itself either.

Please do not hesitate to contact me.

Withholding tax calculation and declaration

The difficulties of the recording of the relevant data for the employees subject to withholding tax and the correct calculation of the exact tax amount are not to be underestimated. Especially the new regulations since 1.1.2021 have caused a lot of uncertainty, because instead of being simpler, depending on the industry and type of employment, it has rather become a lot more complex. The various questions can not always be answered easily:

Who is liable to withholding tax?

What is liable to withholding tax where and when?
Who is the debtor of the tax at source to be delivered to the authorities
How is it calculated and declared (applicable tax rate on a monthly or annual basis? (monthly / annual model)
How is it implemented in the payroll system?
How are cross-border commuters and international weekly commuters treated correctly?
Is it recognised in the company that you could become an economical employer?
When and how should special rates be applied, such as board members living abroad, export of employment stock, artists, athletes, lecturers?

In addition, there have been some major changes for the employers and the taxpayers themselves regarding corrections and deductions. These changes will have a major impact on how to deal with it in spring 2022.

Since the beginning of the drafting of the new legislation, I have been able to follow many of the steps and regularly exchange information with the responsible authorities, even after it has been enacted. The ELM provisions of Swissdec take on a whole new dimension about withholding taxes. Software companies that want to be certified for version 5 must prove, among other things, that they have correctly implemented the calculation of defined examples.

Would you welcome a review of the implementation of the new regulations? Is all the necessary information obtained from the employees and are they informed about their obligations? You will benefit from my comprehensive knowledge – be it procedures, processes, payroll accounting system checks, checklists, instructions, information, calculations or training and workshops.

Rulings and international situations

Depending on the situation, it may be important for situations to be confirmed by the authorities. Here I can be of assistance to you.

Selection of important links

The following links are only available in German, French or Italian:

SSK (Swiss Tax Conference); ESTV (Swiss Federal Tax Administration); ELM (Uniform Salary Reporting Procedure)

FTA salary statement, FAQ (Explanations on the salary certificate and pension certificate, forms, questions and answers, etc.)
SSK sample expense regulations
FTA withholding tax page with link to the cantons
link to the circular letters choose circular letter no. 45 for withholding taxes
Various circular letters from the FTA (Choose subject withholding taxes)
Swissdec ELM (5) guidelines (contains information on the salary statement, withholding taxes and cross-border commuters)

Downloads

Arbeitgeber Zürich VZH

Hans Strittmatter, Attorney at Law, Managing Director

Brigitte Zulauf knows the needs of SMEs. Her profound expertise and experience guarantee competent advice.

Blog

Salary certificate 20.12.2024

Instructions for completing the salary certificate and pension statement 2025 published

On 18.12.2024, the FTA (Federal tax administration) published the guidelines for the 2025 salary certificate. As in previous years, the changes are indicated by a bar. The modifications are also pointed out as part of the communication. (free translation into English) The following significant changes have been made to the instructions for completing the salary […]