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As an employer you have to comply with a wide range of payroll and reporting obligations ‒ regardless of whether you have your registered office, a permanent establishment or individual employees working in Switzerland or abroad. We’re here to help you do so effectively, efficiently and in compliance.
Getting it right means having an evolving knowledge of everything from social insurance, income tax withholding, expense regulations and payroll reporting to immigration and labour law, as well as a firm grasp of the corresponding payroll processing and reporting requirements. With demand for flexible and location-independent working models growing, reducing the risks for you as an employer (as well as for your employees) is an increasingly complex challenge.
The Employment Solutions team helps you navigate the complexity of meeting the local Swiss requirements in any canton. We’ll keep you up to speed on the current laws and regulations. And if your circumstances demand, we can also draw on our international network of specialists for valuable employment tax knowledge from other countries.
Find out more about
Income tax withholding in Switzerland
As an employer in Switzerland you’re responsible for calculating and paying withholding tax. This means knowing who’s liable for withholding tax in the first place and being aware of the current personal circumstances of your employees so that you can correctly determine the tax rate and calculate the tax rate-determining income, as well as paying the withholding tax correctly in international scenarios. You also need to know which salary components (e.g. the bonus, 13th month’s salary or equity-based compensation) are to be taken into account and how ‒ even if they’re paid out retroactively.
Our employment tax experts are there to help with a range of services:
Reviewing your payroll processes and reassessing withholding tax calculations
Renewing withholding tax rulings with the authorities
Reviewing withholding tax calculations for your staff and special employee groups (cross-border workers, board members and contractors)
Individual workshops for HR/payroll on your premises
Payroll reporting
The Swiss salary certificate
The salary certificate and the annex for equity-based compensation constitute the key document in your payroll accounting in Switzerland and Liechtenstein. It serves as the basis for the taxation of your employees.
For those subject to withholding tax, the salary certificate in Switzerland is also proof of the withholding taxes paid. As an employer, you must provide this confirmation to each withholding tax payer. This means doing several things at once: You must implement the salary certificate in accordance with the rules, ensure transparency vis-à-vis the tax authorities and provide reliable information and figures on the salary certificate and annex.
It’s important to realise that there are differences between the two countries. It’s also crucial to keep up with the increasing legal requirements and complexity in this area. We’re here to help you with source tax assessments, practical application questions and special cases relating to the salary certificate.
In all cases our goal is to find the best solution. With many years of experience in optimising salary administration processes and answering questions related to social insurance, withholding tax, equity-based compensation, work permits and labour law, we give you the comfort that you’re handling these matters effectively, efficiently and compliantly.
Annex to the salary certificate: equity-based compensation
If you have an equity-based compensation plan for your employees, you must prepare a supplementary annex to the salary certificate. Equity-based compensation must also be correctly reflected in the salary certificate itself.
Please note that some cantons (such as Vaud) require additional details. We can provide you with the necessary information to issue salary certificates and annexes that are compliant with the relevant Swiss laws.
With special expertise in the taxation of employee shares, we can answer your questions on employee shares, employee options (ESOPs), restricted stock units (RSUs), performance share units (PSUs), phantom shares and employee share purchase programmes (ESPPs).
We can draw on in-depth knowledge, useful tools and our extensive network of specialists to prepare the annex to the salary certificate and support your payroll provider with payroll instructions.
This is how we can support you
Creating and revising the annex to the salary certificate
Discussions with the tax authorities on the taxation of employee participation plans
Help with the legal and practical aspects of reporting equity-based compensation
Expense regulations
The handling of expenses is an important topic for any company
Expenses can either be processed and reported in accordance with the general rules and guidance for completing the salary certificate or in line with approved expense regulations as agreed with the competent tax authorities. The biggest advantage of approved expense regulations is that expense reporting is simplified and generally accepted not only by the employer’s canton of domicile but also by other cantons. This saves the employer time when it comes to handling expenses, ensures equal treatment for employees and makes it easier for them to report expenses in their personal tax return. Added to this, no figures, except flat-rate expenses, need to be listed on the salary certificate.
A reference to the approved expense regulations is sufficient.
Another advantage of approved expense regulations is the option of granting executives representation allowances as part of their function and activities on the market.
This is how we can support you
Review and revise your approved expense regulations including representation allowances
Review your existing internal regulations to ensure compliance with your expense regulation
Support with submissions and negotiating with the tax authorities
Tax rulings
Do you need an individual ruling with for your employees from the Swiss tax authorities on a specific topic or do you have older source tax rulings that need to be revised and re-approved?
A tax ruling is a binding information obtained in advance from the responsible Swiss or cantonal tax authorities. In Switzerland, entities or private individuals can describe their situation and what they determine to be the associated tax consequences. The tax authorities then assess the facts and circumstances and provide binding information by way of approving a tax ruling and / or adding some conditions to the tax ruling. This instrument is often used by companies or employers as well as wealthy individuals to have complex and difficult issues conclusively assessed based on current tax rules and laws.
We will be happy to advise you on your specific situation and show you the advantages and disadvantages of a tax ruling.
This is how we can support you
File tax rulings on the withholding tax consequences of an individual employee
Assessment on tax implications of an equity based compensation plan
Determine other tax implications for individuals and seek approval from the tax authorities
Remote work
ANobAG: remote workers in Switzerland with Swiss social security obligations
Employees who have their usual place of work in Switzerland but whose employer has its registered office or place of business outside of Switzerland are categorised as ANobAGs and trigger a social security liability in Switzerland. It’s your duty as a foreign employer to know what your Swiss social security obligations are in relation to employees who work remotely.
You have to distinguish between situations where the employee is employed by a company domiciled in the EU or EFTA and those employees employed by a company domiciled outside the EU/EFTA framework. We’ll be happy to show you what’s important here and the effects on payroll processing.
In addition to evaluating the social security status and the application for an A1 certificate/CoC, we can support you with the following services:
Calculating Swiss employer and employee social security contributions
Registering the employer/employee with the relevant Swiss social security authorities
Advising on the correct social security coverage required in Switzerland for your employees, obtaining various offers from reputable pension fund providers and providing guidance on the insurance policies
Doing the monthly calculation of the actual social security contributions and providing payroll instructions to the foreign employer for easy implementation in payroll
Preparing year-end social security declarations and Swiss salary certificates
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Do you have any questions? We are happy to support.
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Stephen Turley