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.
Content and purpose of the salary certificate
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.
Specific points related to COVID-19
Change of workload and salary
- The Swiss Tax Conference recommends indicating the employee's workload in section 15 "Remarks" of the salary certificate.
- A reduction in workload should be mentioned in section 15 “Remarks”, especially if it brings with it a temporary reduction in salary.
- In the event of a reduced workload due to short-time work, this could lead to a reduction of the reimbursed flat-rate costs.
- The health crisis does not call for any particular practice on this point. As usual, a private portion must be allocated each month to staff with a company car in section 2.2 of the salary certificate.
- This private share represents the value of the benefit in kind that allows the recipients to use the service car made available for their personal use, i.e. when not traveling between their home and their place of work.
- Whether the employees worked at the office or at home, these employees therefore benefited from this appreciable benefit even if their workload was reduced temporarily, if at all, due to short-time work.
- If providing a service car, you must also tick box F in their salary certificate.
- In section 15, the employer must indicate the percentage of days worked in external service (cf. margin number 9; see also communication-002-D-2016-f of 15 July 2016).
Transport and meals in case of home office
- Even if it was not possible for the employee to use the means of transport or meals made available by the employer during the period of home office, boxes F and G should be ticked nonetheless.
- If the employer’s cafeteria/company restaurant remained closed for more than 120 days in 2020, box G may not be ticked.
- The practice is different from canton to canton when it comes to deducting professional expenses for individuals.
Lump-sum payment to employees for rent and purchase of equipment
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.
Compensation for short-time work (in German: Kurzarbeit / in French: RHT)
- Compensation for short-time work constitutes taxable income for the employees concerned.
- The compensation for short-time work should be indicated in the salary certificate under section 7 "Other payments".
- The company should mention the period for which short-time work was claimed in section 15, “Remarks”.
- If the employer paid the additional 20% difference in the case of short-time work (80%), it is also possible to enter the entire salary (partial unemployment benefit plus difference) as the ordinary salary in section 1 of the certificate of salary.
- Treatment may differ depending on the cantons.
Reminder: For the employer, the benefits claimed from the unemployment fund constitute taxable income that will have to be recognized in the income statement.