The simplified accounting procedure for employers

The simplified billing procedure makes it easier to handle social security contributions and withholding tax.

The Simplified Billing Procedure

The simplified billing procedure was established with the Federal Act to Combat Undeclared Work (BGSA). The employer can voluntarily use this procedure. This benefits the employer by having only one point of contact, which is the compensation fund. The invoicing and collection of social security contributions and withholding taxes occur once a year. Conditions for billing in the simplified procedure:

• the wage per employee may not exceed CHF 21'060 per year
• the total wages must not exceed CHF 56'160 per year
• the wages of the entire staff must be settled in the simplified procedure
• the billing and payment obligations must be properly met

The contributions for AHV/IV/EO/ALV amount to 6.25% each for employers and employees. Regarding withholding tax, the regulation is such that the employer deducts this at the rate of 5% from the AHV-liable wage and forwards it to the compensation fund. The employer is liable for unpaid withholding taxes. Employers who have not employed any staff so far must register with the compensation fund within 30 days of the start of the employment relationship. Employers who want to switch from the ordinary to the simplified procedure must inform their previous compensation fund.

The calculation of social security contributions is as follows: The employer deducts these and the withholding tax from the wages and prepares the invoice with the compensation fund by January 30th of the following year. Afterwards, the compensation fund issues an invoice to the employer. If the deadlines are not met, interest on arrears may be imposed.