SwissSalary FAQ

The most frequent questions, briefly summarized for you

Here you will find the answers to current topics concerning SwissSalary.

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Income tax 2021

As of January 1, 2021, the harmonized Income tax calculation will be introduced throughout Switzerland. All 26 cantons support the new standard and can receive the data electronically (via ELM).

There are now two calculation models (year/month) that include the same (harmonized) calculation bases for all cantons. Up until this moment, each canton has been able to specify its particularities in calculation. Owing to the harmonization, the calculation will be standardized, and this way simplified for all of us (employers, payroll accounting solution manufacturers, etc.). Of course, the change only affects the calculation, and not individual rate levels.

Starting from January 1, 2021, every canton is obliged to redeliver its rates, even if nothing changed compared to the previous year. It is ensured this way that every customer always has correct rates in the system.
Source: Wage Data Processing Guidelines, version 5.0 - Swissdec

Other occupations/substitute sources of income
To make correct withholding tax calculation possible, it must be recorded in the system whether the person continues to work or whether s/he has another occupation of substitute income sources (daily allowances, partial disability benefits, etc.). If the income tax payer (WTP) has other occupations OR receives substitute income, additional information is required:

- If the total employment rate of all additional occupations and substitute income sources is known, the corresponding percentage is recorded in the system. In the case of substitute income sources, the degree of incapacity to perform duties or disability must be taken into account.
- If the total gross income (wages subject to income tax) of all additional occupations and substitute sources of income is disclosed by the WTP, it must be converted into a percentage based on the level of employment and the wages subject to income tax.
- If neither the total level of employment nor the total gross income is known, but the ITP has a level of employment, no additional data is recorded in the system. To calculate the wage subject to withholding tax determined by the rate, the wage subject to the IT is converted to 100% (default value) based on the level of employment. Only the level of employment is transmitted to the IT accounting.
- If neither the total level of employment nor the total gross income is known and no level of employment can be determined for the ITP, no other data is recorded in the system in addition to the ‘Other occupations’ element. In this case, the wage subject to IT determined by the rate is the median wage according to the withholding tax rate file.

Single-parent family
WT rate codes H, P (for German cross-border workers) and U (for Italian cross-border workers) are used for single people who live in the same household with children or dependent persons and to the main part pay for their living costs (single-parent families).

If the company assigns this code to an employee, additional data must be provided like the indication of whether the WTP lives with his/her partner and has sole or joint custody.

If this information is not provided, the employee will be accounted for using rate codes A or L (for German cross-border workers) or R (for Italian cross-border workers) (WITHOUT child deductions).

Information about the spouse
Less information about the spouse needs to be obtained in the future. We are making a white paper available in 6 languages on our website. Since the ELM submission as of January 1, 2021 will still be made using the previous ELM standard 4.0, there are no changes in data collection in this regard.
Rates D and O (additional income) wil be removed
Income tax rates D and O (for German cross-border workers) become invalid as of January 1, 2021.

Rate F (only the cantons of TI, VS and GR)
Pursuant to the double taxation agreement with Italy, this rate applies to cross-border workers who live in an Italian border municipality and whose partner is employed outside Switzerland. The list of border municipalities is published at www.ti.ch/fonte -> "Imposte alla fonte Applicativo IFonte".

Rates for Italian cross-border workers (only in the canton of TI, daily return to Italy)
There are now rates R, S, T and U for Italian cross-border workers (with daily return to Italy). They correspond to the regular rate codes as follows:
R = (A) Single person without children
S = (B) Married or in a registered partnership with the partner not gainfully employed
T = (C) Married or in a registered partnership with the partner gainfully employed
U = (H) Single person with children (see single-parent families)
Italian cross-border workers that stay in Switzerland for a week will now be accounted for according to rates A, B, C and H.
According to current standards, the cantons of FR, GE, TI, VD and VS will use the annual calculation model, while the remaining 21 cantons will use the monthly calculation model.

What are the fundamental differences between the two models?

Fiscal period
Month model = month
Year model = calendar year

Wage subject to income tax
Month model = gross monthly income
Year model = gross monthly income

Wage subject to income tax determined by the rate
Month model = gross monthly income
Year model = annual gross income divided by 12

Annual settlement
Month model = not allowed
Year model = mandatory
SwissSalary is constantly developing and testing new features. Some new fields required for the new calculation process are available as of update 5056.000 (end of October 2020). We will inform you about the new features step by step in a detailed manual.

Starting from November 2020, we will also provide free and paid virtual offers. You will be informed on this matter in your SwissSalary Role Center.
A check of the applied WT rate-determining wage
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Clarification whether the employee subject to withholding tax is defined as a member of a single-parent family.
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The conversion takes place according to the contractual conditions stored in SwissSalary. Example: One of your employees is employed on a 50% basis and in return receives CHF 5,000.00. If he now earns CHF 1,500.00 working for another employer, but the workload is unknown, then the calculation is as follows:

50 % ÷ 5000 x 1500 = 15 %

In this case, you would enter 15.00 in the “Level of employment at other income sources” field. It will make 65% (50% + 15%) in the calculation of the rate-determining income.

Short-time work COVID-19

No report has been set up for the accounting of underemployment due to COVID-19. We do not recommend using the standard report being part of the Plus module.
We recommend generating an A4Q wage type list for each accounting period. The filters can be set to ALV wage; Provision for 13th monthly wage and the recorded reduced working hours. Amounts are to be evaluated as values; hours are to be evaluated as quantity. Further processing must then be carried out manually in Excel.
Daily allowances for underemployment due to COVID-19 are processed exclusively in financial accounting. The simplified accounting procedure does not show daily allowance per employee. Entry per employee is not necessary since no social insurance bases need to be corrected.
Supplement to the standard Manual on 13th monthly wage for processing 13th monthly wages with short-time work.

Legal or collective employment contract bases are decisive. We cannot advise on the applicable basis nor assist with the execution. Obligations to pay contributions to individual social security or taxes are not discussed below.

For the sake of clarity, only the processing of the 13th monthly wage is described. The statements below apply accordingly to any 14th monthly wage.

Wage types contain various settings that are decisive for the 13th monthly wage. It is important that neither of these two settings should be active. Either you choose Rate incl. 13th/14th monthly wage (in the General tab) or Portion of the 13th monthly wage (in the Obligations tab).

  • Annual wage should be the basis for social security (e.g., annual wage agreement with payment in 13 parts)
    • Paying out uncut, full 13th month wage:
      • Portion of the 13th monthly wage (tab Obligations):
        Do not activate for (KAE) reducing wage types when calculating or paying 13th monthly wage.
        It is irrelevant whether it was activated or not during the previous payroll processing of (KAE) reducing wage types. It would only lead to discrepancies between provision amount and the amount paid.
      • Rate incl. 13th/14th monthly wage (tab General)
        Should not have been activated during payroll processing carried out using (KAE-) reducing wage types. Otherwise, the reduction of the portion of the 13th monthly wage would have already taken place and would now have to be corrected manually.
    • Base for social security / taxes 100%; payment reduced to 80%:
      • During the previous payroll processing with wage reduction on the basis of KAE:
        Rate incl. 13th/14th monthly wage (tab General) was activated for (KAE) reducing wage types:
        The reduction in the portion of the 13th monthly wage has already taken place with wage deduction. The full 13th monthly wage can now be settled.
      • If Rate incl. 13th/14th MW (tab General) was not activated during the previous payroll processing with wage reduction on the basis of KAE, manual correction is now required:
        • 2 new wage types, 1x with obligations for social security and taxes, 1x without obligations Setup with subsequent wage type is possible (similar to daily allowance types with continued wage payment, account assignment like for 13th month wage)
        • Evaluation of the settled (KAE) reducing wage types
        • Report the amount for the two wage types (1x positive, 1x negative) so that social security contributions / taxes are settled, but no payment is made
        • Portion of the 13th MW (tab Obligations) for (KAE) reducing wage types is activated -> Reduction for calculation / payment
  • Base 80%; payment 80%:
    • Portion of the 13th monthly wage (tab Obligations) is activated for (KAE) reducing wage types:
      It is irrelevant whether it was activated or not during the previous payroll processing of (KAE) reducing wage types. It would only lead to discrepancies between provision amount and the amount paid.
According to the official guidelines on filling out wage statements, partial unemployment benefit is generally listed in Section 7 «Other benefits».

Unemployment insurance fund benefits: All unemployment insurance fund (ALV) benefits and other loss of earnings insurances paid by the employer (e.g., ALV short-time work and bad weather compensation as well as subsidies) are to be specified;
Point 34

Wage statement (admin.ch)

However, this regulation originates from the time when short-time work compensation was applied to and billed for each individual employee. This way, the amount per employee could be precisely defined and correctly shown in the wage statement.

In the current phase, a shortened, summary application and compensation procedure is used for short-time work if it is related to measures taken to contain COVID-19. In this case, short-time work compensation is applied to and paid for company departments or the whole company. It is therefore impossible to precisely break down the compensation per employee.

However, various cantonal tax authorities require that, on the one hand, the amounts per employee be listed in Section 7 and, on the other hand, the number of short-time work days be recorded in Section 15, «Comments». Short-time work compensation received should be distributed among employees as a percentage in Section 7 in proportion to the lost wages, and the difference should be compensated for in Section 1 of the wage statement.

From our point of view, this approach leads to unequal treatment of taxpayers, since it is impossible to make a correct breakdown due to the summary application process. It is imperative to check the correct procedure for you with your tax authority. We recommend including the comment in section 15 of the wage statement as follows:

Number of short-time work days: 15

The continued payment of wages is recorded in Section 1.

You can enter comments either in the employees’ personnel card before the last pay process or in columns «Comments» and «Comments 2» in the pay process list after the pay process. The last pay process of the respective year is decisive for the wage statement.

Important: This procedure has not been agreed on with the cantonal or federal tax administration. In any case, clarify the situation with your contact person at the respective cantonal tax administration. SwissSalary Ltd. accepts no liability in any case.

KLE

KLE stands for "Customer-integrated Service Process from Claim to Provision"

This new optional Swissdec standard has been under SwissSalary's development as a pilot project starting from summer 2019 and has been piloted with 3 existing customers starting from winter 2019/2020. The pilot customers’ valuable experience was in turn incorporated into guidelines and certification standards.
With KLE, our customers can now create their first accident reports completely digitally from payroll accounting. No additional third-party systems are required. The entire process runs digitally via ELM starting from the damage claim by the employee, accident report and processing through to daily allowance processing in the area of wages.
KLE is available immediately to our SwissSalary Plus customers. SwissSalary is one of the first payroll accounting solution manufacturers in Switzerland to offer this new standard.
We will keep you informed via Yammer (partner) and using information in the Role Center in SwissSalary -> News.
The complete SwissSalary KLE functionalities are only available with Release 5057 and with SwissSalary Module Plus.
The SUA certificate required for secure data transmission is free and valid for one year.

Swissdec 5.0

Source: https://www.swissdec.ch/de/ueber-swissdec/

Swissdec is a not-for-profit joint project involving several independent partners and the quality label for electronic data exchange between companies and insurers, and authorities.

The services of Swissdec, a centralized information platform for electronic data exchange standardization, include:

- Swissdec contributes its expertise in standardization
- facilitates information exchange between all interested parties like software users, ERP solutions manufacturers, companies, associations, offices and organizations
- monitors safe data transmission
- certifies successfully tested payslip software.
Swissdec 5.0 is the evolution of version 4.0 standards published on January 1, 2013.

Swissdec certification covers the following topics:
- General section (company data, wage types, evaluations and personal data)
- Insurance (AHV / IV / EO, ALV, family allowances, UVG, UVGZ, KTG, BVG) as well as daily allowance processing, ceiling insurance wages, payment after resignation, etc.
- Wage statement
- Withholding tax (now includes the calculation according to the new Withholding Tax Regulation effective January 1, 2021)
- Cross-border workers information (new starting from Swissdec 5.0)
- Statistics from the Federal Statistical Office (so far, wage structure survey only - LSE), additional Swiss wage index - SLI, employment statistics - BESTA, profiling, Company and Business Register update survey - Profiling Light)
Due to Swissdec’s very speedy schedule of guidelines and certification test cases development as well as due to delays caused by COVID-19, the certification will not be possible before the end of Q2/2021. As a pilot software development company of Swissdec, we will be among the first to be able to deliver the standard (expected in autumn 2021).

This means that as of January 1, 2021, year-end processing will continue to be carried out using Swissdec 4.0. The new harmonized withholding tax calculation will also be transmitted based on Swissdec 4.0.
We will keep you informed via Yammer (partner) and using information in the Role Center in SwissSalary -> News.