Private share of the vehicle in the Swiss payroll accounting

In Switzerland, the correct treatment of the private use share of a company vehicle is one of the important aspects of payroll accounting. This article provides a detailed overview of the two common methods for accounting the private use share, including the advantages and disadvantages, as well as precise examples with current social insurance rates.

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Methods for treating the private use share

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The private use share of the vehicle is added to the gross salary and deducted again after the calculation of social insurance contributions. In the second variant, the employee pays the private use share in full. These methods are crucial as they affect social insurance contributions and tax burden.
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Variant 1: Addition to gross salary
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This method involves adding the private use share to the gross salary, thereby increasing the assessment base for taxes and social insurance contributions. After deducting these contributions, the private use share is subtracted from the net salary.
Advantages:
- Benefit in kind for the employee.
Disadvantages:
- Higher administrative effort due to the additional calculation and deduction.
- The taxable salary of the employee is higher.

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Variant 2: Deduction
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Here, the private use share is deducted from the net salary.
Advantages:
- Simpler and quicker processing.
- Does not affect the taxable salary of the employee.
Disadvantages:
- Higher burden for the employee.

Examples

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Variant 1: Addition to gross salary
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Monthly salary 1000.00
Private use share of the car 150.00
Gross salary 1150.00
AHV/ALV deduction 73.60
UVG deduction 11.50
BVG deduction 100.00
Net salary 964.90
Private use share of the car 150.00
Payment 814.90

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Variant 2: Deduction
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Monthly salary 1000.00
Gross salary 1000.00
AHV/ALV deduction 64.00
UVG deduction 10.00
BVG deduction 100.00
Net salary 826.00
Private use share of the car 150.00
Payment 676.00

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Conclusion

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The choice of method for treating the private use share of the vehicle depends on several factors, including company policies and legal requirements. It is important for companies to understand the tax and social insurance implications of each method and to ensure a transparent and correct payroll accounting accordingly.