Simplified billing procedure for social insurances

In Switzerland, small employers have the option to use a simplified procedure for processing small payroll amounts. Employers can choose between this simplified procedure and the regular accounting procedure.

The following conditions must be met to use the simplified procedure:

1. The salary per employee must not exceed CHF 21,060 per year. For employment shorter than one year, the salary is prorated to an annual basis.
2. The total payroll must not exceed CHF 56,160 per year.
3. All wages are processed using the simplified procedure.
4. No employment of cross-border commuters from the Principality of Liechtenstein.
5. No employment relationship between an employer in the cantons of Basel-Stadt, Basel-Land, Bern, Jura, Neuchâtel, Solothurn, Vaud, Valais, and a cross-border commuter residing in France.

This results in several advantages for both the employer and the employee:

Payment of social security contributions only once a year

‍Unlike the regular accounting procedure, social security contributions need to be paid only once a year and not on a monthly or quarterly basis. This significantly reduces administrative efforts for the employer.

Accounting of social security contributions and taxation of income

Through the simplified procedure, an employee's income is taxed simultaneously. The employer does not need to create an income statement for the employee and the income is taxed at a uniform tax rate of 5%, which is often more favorable than regular taxation. This results in a significantly lower tax burden for the employee. In this process, the tax is levied as withholding tax, regardless of whether the employee is Swiss or foreign.Our experts are happy to advise you on all aspects of social insurance. In the next post, you will learn how to register and account for the simplified social insurance procedure.

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