Filling out the annual salary certificate is a minefield even in the best of times but COVID-19 has complicated things even further. Completing a form incorrectly may bring with it heavy fines. Here is what to keep in mind.
Every employer is required to issue a salary certificate summarizing all the benefits and appreciable benefits in money that it provides to the employee or retiree under or in connection with a present or past employment contract.
Anyone who does not complete the salary certificate or enters false information in it incurs penalties (Articles 127, 174 and 186 Direct Federal Taxation Act (DFTA); Articles 43, 55 and 59 Direct Taxation Harmonization Act (DTHA) and Article 251 Swiss Criminal Code (SCC)) and / or is held responsible (Article 177 DFTA; Article 56 DTHA).
Keep in mind that the salary certificate is intended for the employee. In some cantons (currently the Cantons of Basel-City, Bern, Fribourg, Jura, Neuchâtel, Solothurn, Valais and Vaud) the employer must also send a copy directly to the cantonal tax administration. In the Canton of Lucerne, it is free to send the salary certificate directly to the cantonal tax administration.
Change of workload and salary
Transport and meals in case of home office
Some employers paid their employees allowances related to COVID-19, for example for rent and / or the purchase of equipment, for example furniture, computer equipment, etc. These lump sums are taxable services which must appear in sections 3 "Intermittent payments" or 7 "Other payments" in the salary certificate stating the lump sum paid to employee.
Reminder: For the employer, the benefits claimed from the unemployment fund constitute taxable income that will have to be recognized in the income statement.
In principle, all benefits that the employer provides to the employee are taxable and must be declared on the salary certificate. But for practical reasons there is no need to declare the following benefits:
As you can see, there are many pitfalls. Should you wish to discuss your employees’ salary certificates, please feel free to contact our Accounting & Payroll team.