An introduction to Swiss payroll. Country Overview and Employer Responsibilities

Transcription

1 An introduction to Swiss payroll Country Overview and Employer Responsibilities

2 Agenda Switzerland an overview Employers obligations Employment law Social Insurance Tax at source Payment Payroll administrative requirements

3 Switzerland An overview

4 Switzerland 26 cantons 26 different tax laws 1 federal tax law Over 1000 different tax tables Inconstant way of calculating tax

5 Switzerland 26 cantons There are more than 10 different types of social insurances There are 26 government social security authorities (one per canton) and over 50 privately operated social security authorities There are additional types of social security in certain cantons

6 Culture

7 Swiss Business Culture Swiss culture is very formal and conservative Businesses are structured in a strict traditional vertical way The culture can vary depending on whether the company is in a French, German or Italian area of Switzerland Decisions that need to be made across the country can take time sue to rivalry between Cantons Generally decisions are made at the top of the organisation and employees have little responsibility Meetings are generally short, ordered and task-oriented, with an expectation of reaching a consensus quickly Punctuality is taken very seriously There is little humour in negotiations Office hours are generally Monday to Friday 8am to 5.30pm

8 Employer Obligations

9 Employers obligations The main employer obligations concerning payroll are: Operate Social Security and pension schemes Insure workforce for accidents Withholding and payment of tax at source

10 Employers obligations The main employer obligations concerning payroll are: Pay employers contributions Submit tax and other social insurance declarations Submit income statements

11 Employment Contracts & Law

12 Employment contracts & law Contractual employment obligations Obligationenrecht (OR) from Article 319: OR sets out the terms and conditions of an employment contract (i.e. sick pay, holiday entitlement, notice period, etc.) Articles are very basic and are sometimes open to misinterpretation

13 Employment contracts & law Contractual employment obligations Obligationenrecht (OR) from Article 319: Court rulings are used as interpretation guidelines Articles are not all binding and some terms and conditions can be amended in an employment contract or in a collective bargaining agreement as long as the employee is better off If certain terms are not mentioned in an employment contract or a collective bargaining agreement then the OR is in force.

14 Employment law Arbeitsgesetz (ArG) The employment law (ArG) sets out the working conditions (i.e. working hours, overtime policy, health and safety etc.) Articles are not all binding and some terms and conditions can be amended in an employment contract or in a collective bargaining agreement as long as the employee is better off If no specific agreement is reached in an employment contract or a collective bargaining agreement than the ArG is in force

15 Social Insurance

16 Social insurances overview AHV, retirement IV, disability EO, maternity and army service insurance Maternity insurance (GE) ALV, unemployment FAK, family allowance BVG, Pension UVG, work-related accident insurance UVG, non-work related accident insurance UVG-Z, additional accident insurance KTG, sick leave insurance Health insurance Stop-Loss insurance, in conjunction with an collective health insurance

17 Social security AHV/IV/EO, ALV, Maternity (GE), FAK Overview All insurance must be reported and paid to the same authority at the same time It is possible to deal with more than one social security authority depending on the set up of the company Maternity insurance is only applicable to employees based in Geneva FAK employee deductions are only applicable to employees in VS

18 Social security AHV/IV/EO, ALV, Maternity (GE), FAK Registration starters New starters need to be registered with the social security indicating the new total salary amount for the entire company Registration can be either done on paper forms or online via PartnerWeb Social security numbers for foreign nationals are to be obtained by the employer. A form needs to be completed and submitted. The social security number will be sent to the employer to be distributed to employee.

19 Social security AHV/IV/EO, ALV, Maternity (GE), FAK Deregistration leavers Leavers need to be deregistered with the social security indicating the new total salaries for the entire company Deregistration can be either done on paper forms or online via PartnerWeb

20 Social security AHV/IV/EO, ALV, Maternity (GE), FAK Invoice and remittance The social security sends either monthly or quarterly invoices based on the estimated salary volume declared at year end Payment instructions are indicated on the invoice Changes in the estimated salary volume should be communicated to the authorities to avoid interest payments

21 Social security AHV/IV/EO, ALV, Maternity (GE), FAK Year end Four reports will be generated by the payroll system (AHV/IV/EO, ALV, Maternity (GE) and FAK) The reports need to be submitted on paper or via PartnerWeb no later than the An estimate for the following year of the social security liable salaries must also be submitted The year end invoice, based on the report submitted, will be sent by the social security. Payment instructions will be indicated on the invoice

22 Tax at source (QST)

23 Tax at source (QST) Every canton in Switzerland, 26 in total, has its own tax laws and its own tax tables Additionally, there is a federal tax law with its own tax table. There are multiple tax tables in each canton depending on a family situation, a church membership, on ordinary taxed versus taxed at source and type of permit (resident or border-crosser commuter). The tax rates can vary drastically from canton to canton.

24 Tax at source (QST) Tax file numbers Each canton will allocate an employer with an tax file number (SSL Number) This number will be allocated automatically once you register your first employee in the canton Employees do not have a tax number

25 Tax at source (QST) Canton of tax liability Employees will be taxed according to the tax legislation and tax tables in the canton of residence Exceptions do apply, for instance all employees working in the Canton of Geneva will be administered according Geneva tax law and tables regardless of canton of residence

26 Tax at source (QST) How to ensure compliance? It is of vital importance to read and understand the QST manual of each canton (published in the language spoken in the canton) to ensure correct calculation, reporting, handling and filing as it may differ from canton to canton In case of a language barrier the employer should seek advice from specialists

27 Payment of salary

28 Payment of salary Payday and payment method Salaries are usually paid around the 25th for the current month According to law the salaries should be paid by the end of the month Salary transfers are usually done via bank transfer (DTA file or similar)

29 Payroll administrative requirements

30 Payroll administrative requirements Standard Payroll Record Following data is required to process the payroll: Name and address Birthdate Civil status Number and details of children Details of spouse Religion Nationality Work permit details if not Swiss Social Security Number Bank details Salary details Working hours Place of work

31 Payroll administrative requirements Payslips Payslips are to be distributed on a monthly basis Payslips can be electronic

32 Payroll administrative requirements Forms to be completed The payroll and or HR department will have to complete various forms on case by case basis. The most common will be: Arbeitgeberbescheinigung for unemployment insurance Zwischenverdienst for unemployment insurance Child allowance application EO maternity and army service salary coverage claims Accident reports Sick leave claims Payroll information for the federal office for statistics

33 Annual income statements Salary certificates Salary certificates to be produced annually in January. If an employee leaves Switzerland a salary certificate needs to be provided after last payment. Salary certificates will be produced by the payroll software. However, certain information out of the expenses system needs to be included manually. A copy of the certificate also needs to be sent to following tax authorities: BS, BL, BE, JU, LU, NE, VD and VS.

34 Annual income statements Additional certificates Certain cantons do require an additional tax document (e.g. Attestation Quittance in GE through the online tool ISEL). Documents are to be distributed with the salary certificate no later than 30th January.

35 Website and guidance available Swiss tax conference, with links to all tax authorities Federal tax authority Social Security Social insurance

36 Thank you for watching Please contact the Global Payroll Association with questions END