Swiss salary certificate – How to understand it ?

In Switzerland, at the end of each calendar year, employers are obligated to provide their employees with a salary certificate. The salary certificate is a specific feature of Swiss payroll and salaries that is important to understand. It is indeed very important for the preparation of tax returns.

Your trust firm Karpeo provides all the explanations about the salary certificate in this article.

Salary certificate – Definitions and obligations

What is a salary certificate in Switzerland ?

The salary certificate is a document that certifies the compensation received by an employee during a calendar year.

It is issued by the employer. The salary certificate includes numerous details, notably the annual income (salaries and bonuses), benefits, social security contributions, and allowances paid by the employer (maternity or paternity allowance).

How to obtain my 2024 salary certificate ?

Employers are obligated to provide a salary certificate annually to all their employees, whether they live in Switzerland or are cross-border workers.

This certificate is generally sent out during the month of January or the beginning of February. The employer’s goal is to issue the salary certificate as quickly as possible to prevent employees from having to request an extension for their tax return.

In cases where an employee holds multiple jobs at once or if they change employers during the year, they must receive a salary certificate for each job.

The importance of the salary certificate in Switzerland

The salary certificate is the most important document for completing the tax return.

It is this document that will allow understanding the income structure of an employee. The salary certificate is tied to the dependent activity of a taxpayer in their tax declaration. Whether you are employed in Geneva, in the Canton of Vaud, or elsewhere in Switzerland, your employer must provide you with this document.

In some cantons, such as Neuchâtel, employers are required to send the salary certificates directly to the tax authorities. The employee will then only need to attach a salary certificate to their tax return if they work for an employer outside the canton or if their employer does not automatically send the certificate to the FTA (Federal Tax Administration).

How to generate a salary certificate as an employer ?

As an employer, you are obligated to provide a salary certificate to your employees.

Accounting and payroll software offers the possibility to generate salary certificates for each employee. These certificates have barcodes to automate processing by the administration.

In cases where your software does not provide you with a salary certificate and you do not have a trust firm, you can visit the website of the Swiss Tax Conference (STC). There, you can generate a salary certificate online for free.

How to understand your salary certificate ?

The salary certificate consists of several sections. Each of these sections serves specific purposes.

The mandatory information on the salary certificate

Beyond the numerical elements mentioned above, a salary certificate must mandatorily include:

• The AVS (social security) number and the date of birth of the employee concerned by the certificate
• The decisive calendar year
• The salary period
• The name and address of the employer
• The date on which it was issued

Simplified table to understand the salary certificate

Sections and figures of the salary certificate

Depending on the benefits received from your employer, it can be more or less complicated to understand your salary certificate. Below, we will explain what each figure represents.

Figure 1 – Salary

The salary includes the following elements: ordinary salary, daily insurance allowances, all types of allowances (birth allowance, family allowance, night work) and commissions.

Note, if the allowance (such as paternity leave) is paid directly by the compensation fund, it should be indicated under figure 15 of the salary certificate.

Figure 2 – Additional salary benefits

These benefits are generally in-kind benefits that provide an advantage to the employee. These advantages must be assessed at their market value or fair value.

There are mainly three types of additional benefits:

• Pension and housing
• Private shares for service vehicles
• Other additional benefits (maintenance expenses, for example)

Figure 3 – Non-periodic benefits

These are benefits received on an occasional basis by employees. The following elements are considered as non-periodic benefits :

• Bonus
• Engagement premiums
• Severance payments
• Loyalty bonuses
• Service anniversary bonuses and gifts

Figure 4 – Capital benefits

This section includes all capital benefits that can be taxed at a reduced rate, notably severance payments or capital benefits of a provident nature, as well as deferred salary payments.

Figure 5 – Participation right

In figure 5, the taxable value as income from employee participations (shares or options) given to the employee during the considered calendar year must be declared.

It is also necessary to declare participations given by a group company (for example: a foreign parent company listed on the stock exchange) if the Swiss employer is aware of their value. Note, a detailed declaration must also be made on an annex to the salary certificate.

Figure 6 – Board members’ allowances

Allowances received by individuals who are part of a company’s board of participation must be indicated here. These allowances include:

• Board members’ allowances
• Attendance fees
• Profit shares

Figure 7 – Other benefits

This figure includes all benefits that cannot be declared under figures 1 to 6 or 14. The type of each benefit must be specified in each case.

Here are the benefits that must be declared :

• Tips (according to AVS norms);
• Daily allowances paid by an insurance (which are not declared under fig.1), unemployment insurance benefits, and loss of earnings allowances;
• Insurance contributions paid by the employer on behalf of the employee or their relatives: health insurance, 2nd pillar, 3rd pillar (a and b), life insurance, etc.;
• Taxes or source taxes settled by the employer on behalf of the employee;
• The schooling fees of the employee’s children that the employer takes on.

Figure 8 – Total gross salary/pension

The gross salary includes the sum of figures 1 to 7 before the deduction of social security contributions and source tax.

Figure 9 – AVS/AI/APG/AC/AANP Contributions

The amount of social security charges borne by the employee is shown in figure 9 of the salary certificate. This includes, in particular, contributions to the 1st pillar (AVS, AI, APG).

Employee’s sickness daily allowance contributions are not deductible; they must be declared under figure 15 in the remarks and not under figure 9.

Figure 10 – Occupational pension (2nd pillar)

Mandatory or optional 2nd pillar contributions are deductible. If the amount is entirely borne by the employer, the deduction is still allowed provided that the amount is declared under figure 7 as other income.

Prevention buy-backs that have been subject to an additional salary deduction must be indicated under figure 10.2. However, buy-backs made directly by the employee with the pension fund must be certified by the pension fund and do not appear on the salary certificate.

Figure 11 – Net salary

This is the amount that will be used in the tax declaration. Mathematically, the net salary is equal to the gross salary (figure 8) minus figures 9 and 10.

Figure 12 – Withholding tax

The source tax withheld by the employer, for example, for cross-border workers or workers with a B work permit throughout the year, must be listed here.

It is important for cross-border workers to check if the quasi-resident status can be advantageous for them tax-wise.

Figure 13 – Allowances for expenses (not included in gross salary)

All expenses actually reimbursed to an employee must be declared in the salary certificate. However, there is no obligation to declare these amounts if the following conditions are met :

• Overnight expenses are reimbursed upon presentation of receipts;
• Dinner or supper expenses are reimbursed at their actual value up to a limit of CHF 35.- or, if they are reimbursed on a flat-rate basis, this flat rate does not exceed CHF 30.- per main meal;
• Client invitations are settled duly upon presentation of the original paid invoice;
• The use of public transport means (train or plane) is attested by receipts;
• A maximum of 70 cents per kilometer is reimbursed for the professional use of a private vehicle.

If all these conditions are met, it is sufficient to tick the small box of figure 13.1.1 of the salary certificate. There is no need then to indicate the actual amount of the reimbursed expenses.

Figure 14 – Other additional salary benefits

Here, you will find benefits that cannot fall under figure 2, talking here about benefits appreciable in money notably goods and services provided to the employee at a particularly advantageous preferential price.

Figure 15 – Observations

The observation field allows for the input of additional information that cannot be categorized under any other section and without which the salary certificate would be incomplete, inaccurate, or lacking clarity.

This includes in particular the following elements:

• PG health contributions / LAMal Geneva / LPC Families Vaud deducted from the employee, mentioning the amount deducted;
• Family allowances included under figure 1 (when they are paid by the employer) or allowances paid directly by the family allowance fund;
• Number of loss of earnings days compensated directly by the insurer;
• Mention of the reimbursement of expenses agreement approved by the canton and the related date;
• Issuance of multiple salary certificates (“1 salary certificate out of 2”);
• Part-time activity (the % of activity must then be mentioned).

Benefits not to be declared

In principle, all benefits that the employer provides to the employee are taxable and must be declared on the salary certificate.

For practical reasons, however, it is unnecessary to declare certain benefits. Here is a list:

• The free provision of a half-fare SBB subscription;
• REKA check discounts of a value less than or equal to 600.- CHF per year (however, discounts must be declared if they exceed 600.- CHF per year);
• Christmas, birthday, or other usual gifts of a value less than or equal to 500.- CHF per occasion. In the case where the value of the gift exceeds this amount, its total value must then be declared under figure 2.3 of the salary certificate;
• Private use of work tools such as a mobile phone or computer;
• Contribution to membership fees in clubs or associations less than or equal to 1’000.- CHF per membership. Note, this does not apply to fitness clubs;
• Contribution to membership fees in professional associations without a cap;
• The granting of usual discounts in the concerned branch on goods intended for personal consumption and use.

FAQ on the Swiss salary certificate

What is a salary certificate in Switzerland ?

The salary certificate is an official document issued by an employer in Switzerland at the end of each calendar year. It contains details on the gross salary, deductions, non-monetary benefits, and other compensation elements of an employee for the concerned year.

Who needs to issue a salary certificate ?

All employers in Switzerland are required to issue a salary certificate for each employee at the end of the calendar year, regardless of the type of employment contract or the employee’s salary, even for a minimum wage employee.

Why is the salary certificate important ?

The salary certificate is used by the Swiss tax authorities to determine an individual’s income tax. It is also used by the employee to declare their income in their tax return. Additionally, the salary certificate can be requested by various institutions, such as banks when granting a loan.

What should I do if I lose my salary certificate ?

If you have lost your salary certificate, you should contact your employer to request a copy. Employers are required to keep a copy of all issued salary certificates.

What elements are usually included in a salary certificate?

A Swiss salary certificate typically contains the following information: the name and address of the employer, the name and address of the employee, the annual gross salary, social deductions (AVS/AI/APG/AC), non-monetary benefits, professional deductions, the annual net salary, and the employer’s signature.

Should I keep my salary certificates ?

Yes, it is recommended to keep your salary certificates for at least 10 years, as they might be requested by tax authorities or other institutions.

When will I receive my salary certificate ?

Employers are required to issue salary certificates by the end of February of the following year. For example, for the fiscal year 2023, the salary certificate should be received by the employee before the end of February 2024.

What is a corrective salary certificate ?

A corrective salary certificate is a revised salary certificate that is issued when errors have been identified in the original salary certificate. It replaces the original salary certificate and must be used in place of the latter for all tax declarations and other uses.