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Payroll year-end: declarations and salary certificates

The gingerbread on the supermarket shelves leaves no doubt: Christmas is coming, and with it the payroll year-end. But what does it involve? In this article, we take you through the year-end close. The payroll year-end close, that is. And so that nothing gets forgotten, we’ve set it out month by month.

November

In November, take a closer look at your payroll. Also check in with neighbouring departments, such as HR admin and financial accounting, because they may hold information that matters for payroll.

But which questions should you ask? Here are ten questions to help you review the current payroll period:

  1. Are all pay types set up with the correct bases for AHV (old-age and survivors’ insurance), ALV (unemployment insurance), FAK (family allowances), UVG and UVG-Z (accident and supplementary accident insurance) and KTG (daily sickness allowance insurance)?
  2. Were the correct premiums processed?
  3. Were advances paid that weren’t settled through payroll?
  4. Are the private use shares for company vehicles assigned and accounted for correctly?
  5. Were GA travelcards or point-to-point season tickets issued?
  6. Were expenses processed through financial accounting that weren’t settled through payroll?
  7. Were there any gifts to employees?
  8. Were training costs reimbursed to employees?
  9. Or were training costs repaid under a repayment agreement?
  10. Is there an ESOP (employee share ownership plan)?

December

December is all about social insurance. Salary declarations for the past year and salary reports for the coming year are due. And as so often in payroll, preparation is half the battle.

Before you start the declarations, ask yourself: do we declare via ELM (Swissdec’s uniform salary reporting procedure), an online portal or a declaration form? Then check that your ELM codes are set up and assigned correctly, that all access is in place, or that you have all the forms in-house.

If you like to double-check everything, we also recommend a worksheet, ideally in Excel. It lets you re-sort the data later and calculate with formulas. The worksheet is based on the cumulative journal: for each employee individually, it assigns the salary components to the salary totals to be declared, and it records their gender too. That gives you the final confidence that your payroll is right.

Next, simulate the coming year in Excel or your payroll software, with any salary adjustments, budget figures for new positions, known leavers and an estimate of your variable pay components (based on experience, the budget or department forecasts).

Once the final payroll run is done and your preparation is complete, you’re ready for the declarations:

  • AHV declaration
  • FAK declarations, if you employ people at other locations
  • UVG and, where applicable, UVG-Z declaration
  • KTG declarations
  • BVG (occupational pension) salary report for the coming year

With a GAV (collective labour agreement):

  • Declaration to the joint committee (paritätische Kommission)

With a cantonally approved expense policy:

  • Overview of the recipients of flat-rate expenses for the cantonal tax office

January

If payslips were created after your declaration, which unfortunately happens far too often, report them with a supplementary declaration. After that, you can turn your full attention to the Lohnausweis (salary certificate). It can still be tricky.

Here too, we strongly recommend checking how your pay types are mapped first. Go through the pay types in the cumulative journal and quickly check that each one is assigned to the right box on the Lohnausweis.

If questions come up, the Lohnausweis guidance (in German) from the ESTV (Federal Tax Administration) is a great help. It is clear and easy to follow. If in doubt, take a look.

Once you feel the salary certificates are final and correct, ask someone on the team to cross-check them as a second pair of eyes. The Lohnausweis is an official document and is treated as a legal record, so it should be checked carefully. It only needs to be signed if you created it by hand or with a program that isn’t Swissdec-certified.

Now all that’s left is to send the salary certificates to your employees. But here too, in true Swiss payroll fashion, there are small cantonal differences. Some cantons, currently Basel-Stadt, Bern, Fribourg, Jura, Neuchâtel, Solothurn, Vaud and Valais, also require employers to send a copy of the salary certificates directly to the cantonal tax administration.

And once that’s done, your payroll year-end close is complete (unless you still have clearing accounts to reconcile).

Now it’s your turn to enjoy the winter. Whether on the slopes (or next to them), on the sofa, under the northern lights or perhaps by the sea is entirely up to you. The busiest season of the payroll year is behind you.

By Anna Wiesian