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Payroll accounting

Payroll accounting is the correct calculation, settlement, and booking of wages including all social-security deductions and employer contributions. It produces the monthly payslip, the annual salary certificate, and the reports to the AHV compensation office, pension fund, and accident insurer.

As soon as a business has employees, a series of legal obligations around wages arises. Payroll accounting ensures the right deductions are made from gross salary, employer shares are added, and all amounts are delivered on time to the responsible bodies. The net salary determines what employees are paid out; the reports determine whether AHV, pension fund, and insurers are correctly maintained.

The main deductions in Switzerland: AHV/IV/EO (total 10.6 %, split in half, i.e. 5.3 % each for employee and employer), unemployment insurance ALV (total 2.2 %, 1.1 % each), occupational-pension contributions (BVG/pension fund, per the plan rules), and non-occupational accident insurance (NBU) at the employee's expense. For employees liable to withholding tax, the tax-at-source deduction is added. Besides its own shares, the employer bears occupational accident insurance (BU) and administrative costs.

The process: a monthly payslip per employee with gross, deductions, and net; ongoing booking into the financial accounts; interim or annual settlement with the AHV compensation office, pension fund, and accident insurer (wage-sum report); and at year-end the salary certificate for each person as the basis for their personal tax return. Many businesses use ELM (unified wage-reporting procedure), which transmits the data directly to social insurers.

What to watch for: correct handling of child and family allowances, expenses (genuine expenses are not salary, flat-rate expenses need an approved policy), the 13th monthly salary, holiday and overtime compensation, and the correct treatment of illness, accident, and maternity (daily allowances). Errors in social insurance surface at the periodic AHV audit and are charged retroactively.

A fiduciary office often runs payroll as a module alongside the financial accounts. As a guide, the payslip costs around CHF 15–40 per employee per month, plus the annual closing and reporting work; smaller setups are frequently billed as a flat fee (no guarantee).

Example

A restaurant in St. Gallen employs six people, two of them with cross-border/withholding-tax status. The fiduciary office prepares the monthly payslips, deducts AHV/IV/EO, ALV, pension fund, NBU, and for the two concerned the withholding tax, books everything in the accounts, and reports the wage sums annually to the compensation office and accident insurer. At year-end each person receives their salary certificate.

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Frequently asked

What does payroll accounting cost at a fiduciary?

As a guide, roughly CHF 15–40 per employee per month for the payslip, plus the annual closing and reporting work. With few employees a small flat fee is often charged. Cost drivers are headcount, withholding-tax cases, and changing workloads (no guarantee).

Which social-security deductions belong on the payslip?

AHV/IV/EO (5.3 % each), ALV (1.1 % each), the occupational-pension (BVG) contributions, and the non-occupational accident insurance (NBU) at the employee's expense; for withholding-tax-liable persons the tax at source as well. The employer bears its own shares plus occupational accident insurance.

What is the difference between payroll and financial accounting?

Financial accounting records all of the business's transactions. Payroll accounting is the specialised part around wages, i.e. settlement, social insurance, salary certificates, whose results (wage expense, deductions) then feed into the financial accounts.

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