Table of Contents

Process withholding tax

Update tariffs, classify employees subject to withholding tax, and check the calculation in the payroll run. Payroll specialists do this when tariffs are updated, when employees join, and when employee data changes—ideally during employee master data maintenance and before every final run with withholding tax. The annual reconciliation is part of preparing the Swissdec and annual reports.

Prerequisites

  • Employees' work locations and tax locations are maintained. For more information, see Set up employees for payroll.
  • You enter your settlement number for each canton in Payroll Setup under Tax at Source Setup. Do not change the calculation method of the cantons manually.
  • The current tariff set is available as a supported import file (Store or official tariff file).
  • Joining, leaving, number of children, and other tariff-relevant information is complete and correct for the applicable dates (use TimeMachine where necessary).
Wichtig

SwissSalary checks whether a tariff combination technically exists. The legal assessment of which tariff applies to a person remains a professional responsibility.

Import tariffs

  1. Through the administration area, open the SwissSalary Organization page.
  2. Choose Store > Install All Store Updates. This requires that your SwissSalary version is up to date.
  3. Wait until all cantons have been updated one after the other. This can take a few minutes.
  4. Check that the status of all cantons is up to date at the end.

In addition to tariff lines, the import updates cantonal values such as collection commission and median value. Tariff data that is more than four years before the year of the import file is removed.

Warnung

Change the cantonal calculation method only after a confirmed legal change. SwissSalary explicitly alerts you when you make a change.

Classify employees

On the employee card, open the Tax at Source section and proceed as follows for each person subject to withholding tax:

  1. Turn on Tax at Source Liable.
  2. Check the work location. SwissSalary requires a work location when withholding tax liability is enabled.
  3. Check the IT County.
  4. Select the IT Tariff from the tariff list available for the canton.
  5. Enter the Number of Children.
  6. Check IT with Church. SwissSalary compares the selection with the existing tariff lines.
  7. If necessary, enter Tax at Source Other Gainful Activities and the total employment percentage of other income.
  8. Use an IT Fix Rate only for a professionally confirmed special case.

For Swiss or Liechtenstein addresses, SwissSalary partly determines the canton from the tax location and postal code. An entered tariff must match the available combinations for the canton.

Record changes by date

Use TimeMachine for past or future changes to:

  • withholding tax liability;
  • withholding tax canton;
  • withholding tax tariff;
  • number of children;
  • church tax;
  • other gainful activities.

Keep the last processed value on the employee card and enter the retroactive changes for the affected fields in TimeMachine. This preserves the date from which a new classification applies. For backdated changes, check whether a corrective payroll calculation is required.

Tipp

Do not enter tariff changes immediately before the final payroll run. Then run a test calculation for the affected person and compare the base, rate, and deduction.

Calculate withholding tax

In the payroll run, SwissSalary transfers the valid withholding tax information to the payroll header. For tariff determination, the calculation considers, among other things:

  • canton and tariff;
  • church tax;
  • number of children;
  • gender;
  • validity period;
  • amount subject to withholding tax.

A stored fixed rate overrides the tariff search. Payments after leaving without a retroactive calculation receive special treatment; the corresponding indicator requires a leaving date.

If no matching tariff is found, the calculation stops and provides the person, canton, tariff, date, and amount. Then check both the classification and the imported tariff set.

Check results

Check the calculated values on payslips and in the following reports:

  • Tax at Source / County
  • Tax at Source / County / Year
  • Tax at Source Confirmation

At a minimum, reconcile the withholding tax base, deduction, canton, tariff, and period. Also use the annual report for reconciliation before the electronic report is submitted.

Good to know

  • You treat the existence of a tariff as proof that the classification is legally correct—incorrect tax deductions are made despite a “valid” tariff.
  • You change the cantonal Calculation Method without a confirmed legal change—deductions and reports differ from the canton’s requirements.
  • You enable withholding tax liability without a work location and matching IT Tariff—the calculation stops or returns 0.
  • You enter tariff changes immediately before the final run without a test calculation—incorrect deductions are sent to employees and the canton.
  • You set a fixed rate or payment after leaving without a leaving date or professional basis—the run stops or posts incorrectly.

See also