Payroll Update 2025

Legal Changes

Compared to previous years, there are some changes in the area of Payroll and social insurance in 2025.

First Pillar

The first increase in the reference age for women from 64 years to 64 years and three months came into effect on 1 January. Women born in 1961 will therefore retire three months later.

The option to waive the allowance for persons of reference age remains in place. The waiver must be reported by the first payroll run of the calendar year or after continuing to work. Employees are responsible for complying with the requirements.

The rates for family allowances have been increased to at least CHF 215 or CHF 268 as the minimum contribution. Cantonal contributions may be higher and have been communicated accordingly.

The handling of private contributions for electric company cars will also change in 2025. Previously, the value of the charging station including installation was added to the vehicle value and served as the basis for calculating the 0.9 % private contribution per month. From 2025, the costs of the charging station including installation will be regarded as the relevant salary and will no longer be included in the 0.9 % reduction. In concrete terms, this means that only the value of the vehicle will be taken into account in the conversion calculation.

Example with a vehicle value of CHF 50,000:

An increasingly popular alternative to accounting for the private share of business vehicles is the crediting of flat-rate car expenses. A distinction must be made here as to whether the company has approved expense regulations. With approved expense regulations and the corresponding mention in the salary statement, the flat-rate car expenses must be reported under item 13.2.2 and are not subject to social insurance contributions. This compensation also covers the journey to work, which is why the "F" field on the salary statement must be marked with a cross. The costs must correspond approximately to the actual expenses and must be reviewed every three years or when there is a change of function. If the company does not have approved expense regulations, a logbook must be kept to justify the lump-sum expenses. The lump sum is also taxable. A template in an expense regulation can look like this:

2. Secure Pillar

The limit amounts for occupational pension schemes have generally been adjusted.

French Cross-Border Commuters – What Applies from
1 January 2025?

On 17 December 2024, the Federal Tax Administration (FTA) published an important communication on the taxation of cross-border teleworking between Switzerland and France. Teleworking includes all professional activities and tasks that employees do not perform at the company's central location. This also includes work carried out in a home office, a coworking space or while travelling, for example by train or plane. These regulations affect many employers and their employees.

Extension of the Transitional Regulation on Teleworking

Switzerland and France have reached a new mutual agreement that extends the previous transitional regulation on the taxation of cross-border teleworking until 31 December 2025. Originally, this regulation would have expired at the end of 2024.

The following key points continue to apply:

• Teleworking of up to 40% of annual working hours is permitted without giving rise to international tax divergences
• Employers do not have to certify the percentage of teleworking in 2025 as part of the automatic exchange of information (AEOI) However, the obligation to provide a corresponding certificate at the request of the tax authorities remains in place. It is recommended that the days and quotas are recorded in the Payroll on an ongoing basis.

Effects for Companies

The extension of the transitional regulation entails the following obligations and adjustments for employers:

1. Detailed certificates for departures: In accordance with the Withholding Tax Ordinance (Art. 5a QStV), employers are obliged from 1 January 2025 to issue detailed certificates when French cross-border commuters leave the company during the year. A template for the certificate is still available separately here.
2. Compliance with the 40% rule: Employers are still responsible for ensuring compliance with the maximum 40% teleworking per year. This rule also includes a maximum of ten travelling days within the country of residence.
3. Social security challenges: The tax regulations on teleworking are not congruent with the social insurance provisions. Social security issues and cost increases can arise, particularly for employees who regularly work outside Switzerland or the EU. In this case, it is advisable to clarify the situation in detail before hiring the employee.

Conclusion

Although the Federal Tax Administration (FTA) has adopted the new mutual agreement, the regulation on the documentation obligation remains in place. Employers are still obliged to keep detailed records of the teleworking rates and work assignments of their employees. This data is essential in order to fulfil both tax and social security requirements.

Efficient and Secure: The Standardised Payroll Reporting Procedure (ELM) at a Glance

ELM (standardised payroll reporting procedure) considerably simplifies payroll accounting and reporting obligations for companies. Here you can find out how ELM works, what advantages it offers and what you need to pay attention to in order to maximise the efficiency of this system.

What is ELM?

ELM is known as a standardised system for the transmission of salary data from companies to social insurance companies and authorities. Developed and certified by Swissdec, it not only serves as a transmission tool, but is also regarded as the wage standard in Switzerland.

This Swissdec wage standard defines topics such as how withholding tax calculations and wage statements should work and look in Switzerland.

The Advantages of ELM

The standardised payroll reporting procedure has numerous advantages that both reduce the administrative burden and increase efficiency.

• Time savings through automation
  By bundling notifications to various authorities such as compensation funds, tax offices and accident insurers, there is no need to enter the same data multiple times. Once information has been entered, it is automatically transmitted to the correct authorities.
• Error reduction thanks to standardised processes
  ELM uses a standardised data format that minimises errors caused by manual entries. The automatic validation of data before transmission ensures that contradictory or missing information can be recognised and corrected at an early stage.
• High data security
  Data transmission is encrypted and complies with strict data protection guidelines. This ensures that sensitive information such as wages and social security data is transmitted securely and protected against unauthorised access.
• Improved collaboration with authorities
  As all relevant institutions receive standardised information, queries can be reduced and smooth communication with authorities and insurers can be ensured.

Changes Between ELM Versions 4 and 5

The ELM 4 version is coming to an end and the data will now be transmitted with ELM 5.

The deadline for adapting the system to ELM 5 was 31 December 2024, although an extension until 31 December 2025 could be requested. After this date, all systems must have ELM 5 in use.

What Advantages Does the Current Version of ELM 5 Offer?

The latest version of ELM provides users with a chat function. This enables insurers and withholding tax offices to send feedback or information on potential corrections directly.

In addition, ELM 5 expands the variety of data transmission options. This includes, for example, the transmission of information on cross-border commuters from France and Italy as well as monthly statistical reports.

What Actually Happens when I Start the ELM Transmission?

Essentially, ELM is used to read out various technical tables and link them to the master data and payroll data. In the case of withholding tax transmission, for example, the system extracts the payroll number per canton from a technical table, checks relevant master data such as withholding tax liability, canton, tariff or marital status and combines this with the payroll data for the current month. It also differentiates between periodic and non-periodic payments.

The standardised payroll reporting procedure is an important step towards Digitalisation and efficiency. Take advantage of the benefits and save valuable time and resources!