Private use of company car: How is the private portion determined?

If a company car is also used privately, the private share must be determined, as this use may represent a monetary benefit and is therefore taxable.

Private share in company car

When an employee is allowed to use a company car for private purposes and has to pay no or only a small compensation, a monetary benefit accrues to him. This is to be taxed as income from non-self-employed work.

In calculating this, a distinction can be made between two methods. First, there is the actual calculation. Alternatively, the flat-rate calculation is used.

The actual calculation is applied if the total operating costs and the business and private kilometers traveled can be traced using a logbook. Thus, the actual costs are proportionally divided between the business and private kilometers traveled. With the flat-rate calculation, the keeping of a logbook is not necessary. Here, as the name suggests, a flat rate of 0.8% of the purchase price per month is assumed. However, the minimum amount is CHF 150.-.

The private share of a company car is charged through the payroll. It represents a component of wages subject to AHV contributions.