If you employ staff without a settlement permit or with residence abroad, your business becomes a tax collector: as employer you deduct withholding tax from salary, register the person, settle periodically and pay the amount over to the canton. You are liable for it, even if the person gave false information. This guide explains withholding tax for employers: who is affected, how you determine the tax code, which deadlines apply and when the withholding tax liability ends. It deals with cantonal tariffs and forms only in general terms; your cantonal tax administration and its leaflets are decisive.
Who is liable to withholding tax
Under Art. 83, para. 1 DBG, employees without a settlement permit who are resident or stay in Switzerland for tax purposes are subject to withholding tax on their earned income. Income in the simplified accounting procedure under Art. 37a DBG is excepted. Spouses in a legally and actually undivided marriage are not liable to withholding tax if one of the two has Swiss citizenship or a settlement permit (Art. 83, para. 2 DBG).
Employees resident abroad are also subject to withholding tax on their income earned in Switzerland (Art. 91, para. 1 DBG). According to Circular No. 45 of the FTA, this applies regardless of nationality and permit, and so also to cross-border commuters with a Swiss passport. Double taxation agreements remain reserved (no. 3.1.2). The duty begins when dependent gainful activity is taken up, including for minors (no. 3.1).
The debtor of the taxable benefit is whoever pays it out; as a rule this is the employer, and in the case of replacement income also the insurer (no. 2.2.1). Special rules for personnel leasing and de facto employers are not covered here.
What is subject to withholding tax
Withholding tax is calculated on gross income (Art. 84, para. 1 DBG). Earned income, including secondary income and benefits in kind, and replacement income such as daily allowances are taxable (Art. 84, para. 2 DBG; Art. 3 QStV). The circular includes ordinary salary, payments for overtime and night work, all allowances including family allowances and holiday compensation, commissions, gratuities, bonuses, long-service gifts and benefits in kind (no. 3.2.1). The private use of a company car increases gross monthly salary (no. 3.2.6).
Expenses are not taxable only if they are matched by actual business outlays; the receipts are to be kept. Flat-rate expenses are subject to withholding tax unless they rest on an expense policy approved by the tax authority (no. 3.2.5).
Determine the tax code
The FTA calculates the withholding tax deduction on the basis of the income tax tariffs; occupational expense flat rates, insurance premiums and family burdens are taken into account in it (Art. 85 DBG). Which tariff applies is determined by the tax code. It depends on the personal circumstances at the time of payment, transfer, crediting or maturity of the benefit (Circular no. 4.1). The most important codes under Art. 1 QStV:
| Code | Application |
|---|---|
| A | Single persons without children or persons in need of support in the same household |
| B | Married persons where only one person is gainfully employed |
| C | Married persons where both are gainfully employed |
| H | Single persons with children or persons in need of support in the household, whose maintenance they mainly bear |
The letter is joined by the number of child deductions and church tax: “A0Y” means without children and with church tax (no. 4.1); an “N” stands for not liable to church tax (example in no. 4.9). As evidence for children, the circular names, among others, birth certificates and allowance decisions (no. 4.7); on this, see the guide to family allowances. If the person cannot identify themselves reliably, apply A0Y or C0Y (no. 4.1). If circumstances change, for instance through marriage, divorce, birth or joining or leaving a national church, the new tariff applies from the following month (no. 4.1). Employees must report changes (Art. 5, para. 3 QStV).
Employer duties and deadlines
Art. 88, para. 1 DBG names three duties: to withhold the tax when it falls due, to issue the person a statement or confirmation of the deduction, and to pay over the taxes periodically, settle and allow the authority to inspect the records. This also applies if the person lives in another canton (Art. 88, para. 2 DBG). You make the deduction regardless of objections or wage garnishments (Art. 2, para. 1 QStV).
| Duty | Deadline | Basis |
|---|---|---|
| Report a new hire | eight days from the start of employment, on the authority’s form | Art. 5, para. 1 QStV |
| Report changes | eight days after the event | Art. 5, para. 3 QStV; Circular no. 9.2 |
| Submit the settlement | in principle monthly, within 30 days after the end of the settlement period | Circular no. 9.3 |
| Pay the tax | Monthly model: on the canton’s invoice; annual model: within 30 days of the due date | Circular no. 9.3.2, 9.3.4 |
With electronic settlement, you can report new hires (one item of the onboarding checklist) with the monthly settlement (Art. 5, para. 2 QStV). The authority can approve longer settlement periods on application, unless settling electronically via the payroll declaration procedure. Since 2021 you settle directly with the entitled canton, as a rule the person’s canton of residence or stay, and for persons resident abroad the canton of the employer’s registered office or permanent establishment; if the person moves, the settlement changes from the following month (no. 9.5). Annex III of the circular (as at 1 January 2019) lists which cantons settle under the monthly or annual model; check your canton’s assignment.
For your effort you receive a collection fee of 1 to 2 per cent of the total withholding tax amount (Art. 88, para. 4 DBG). The cantons set the rate and the arrangements and may reduce or cancel it in the event of breach of procedural duties (Art. 6 QStV).
Liability and corrections
The debtor is liable for payment of the withholding tax (Art. 88, para. 3 DBG). The circular states: liability is independent of fault and includes mistakes or false information by the person; it also exists after leaving (no. 9.1). You must therefore clarify the personal circumstances and check the information. Recourse against the person remains reserved. Anyone who intentionally or negligently fails to pay over withholding tax risks a charge of tax evasion, and anyone who uses it for their own benefit a charge of embezzlement (no. 9.1).
You can correct errors in gross salary or the tax code yourself if the correction reaches the authority by 31 March of the following year at the latest; amounts deducted in excess must be refunded to the person (no. 9.4). If you submit registrations or settlements late, depending on the canton the collection fee may be lost, and default interest and fines are threatened (no. 9.6).
End of the withholding tax liability
Anyone who receives a settlement permit or marries a person with Swiss citizenship or a settlement permit is assessed in the ordinary procedure for the whole tax period. Withholding tax is no longer owed from the following month; the tax deducted so far is credited without interest (Art. 12 QStV). Persons resident in Switzerland are also assessed ordinarily afterwards if their gross income in the tax year is at least CHF 120’000 (Art. 89, para. 1 lit. a DBG, Art. 9 QStV), or on application by 31 March of the following year (Art. 89a DBG, Art. 10 QStV). For you as employer, nothing changes as a result: you continue to deduct withholding tax until the duty ends.
Payroll and salary certificate
Disclose the withholding tax deducted in every payslip and in item 12 of the salary certificate. The circular recommends naming in item 15 the tax codes applied, with periods (no. 9.1). Item 12 shows the gross amount for the year; if you pay the withholding tax for the person, it belongs in item 7 with the note “Withholding tax paid by employer” (guidance notes, m.no. 48). More on this in the guide to the salary certificate.
Practical example: Gartenbau Zehnder AG
The Gartenbau Zehnder AG is a fictitious business in a canton with the monthly model. Marko Jovanović, single, no children, not liable to church tax and with a B permit, starts on Monday, 2 November 2026. Tax code: A0N. His monthly salary is CHF 5’200, plus a shift allowance of CHF 300, together CHF 5’500 gross. The rate for this bracket in the canton’s tariff is assumed in the example at 8.5 per cent; the tariff line of your canton is always decisive.
| Step | Date | Calculation |
|---|---|---|
| Registration with the canton | at the latest Mon 9.11.2026 | eight days from the start of employment, start day counted to be safe |
| Deduction in November | salary payment 30.11.2026 | 5’500 × 8.5% = 467.50 |
| Settlement for November | at the latest Wed 30.12.2026 | 30 days after the end of the settlement period (30.11.) |
| Marriage | Wed 2.12.2026 | Mr Jovanović marries a Swiss woman |
| Deduction in December | salary payment December | again 467.50, withholding tax no longer owed from the following month |
| Reporting the change | at the latest Thu 10.12.2026 | eight days after the event |
From January 2027 the company no longer deducts withholding tax. The 2026 salary certificate shows CHF 935 (2 × 467.50) in item 12 and the tax codes in item 15. Mr Jovanović is assessed ordinarily for 2026, and the withholding tax deducted is credited without interest. Had the company missed the marriage and kept deducting in January, it would have had to refund the excess tax.
Checklist
- Clarified before joining whether the person is liable to withholding tax (permit, marital status, spouse, residence)
- Personal circumstances asked for and documented: marital status, children, denomination, spouse’s gainful activity
- Registration submitted within eight days from the start of employment
- Tax code entered in the payroll master data and adjusted on changes
- All taxable salary components in the basis of calculation, including allowances and benefits in kind
- Monthly settlement submitted within 30 days after the end of the period, payment on the canton’s invoice
- Withholding tax shown in every payslip and in item 12 of the salary certificate
- Changes and departures reported within eight days
- Error corrections completed by 31 March of the following year
How KMU | base helps
HR | base calculates withholding tax in payroll and handles registration through the checklist. You still submit the settlement to the canton yourself for now.
1. Record the person. On joining (People › Employees › Record new joiner) you tick withholding tax under “What applies?”. The joining checklist then contains the item “Register withholding tax with the cantonal tax office”, with the note on the eight-day deadline, by default due three days after joining. On leaving, the checklist handles the deregistration.
2. Payroll master data. Under Payroll › Payroll › People you open the person. In the “Withholding tax” group you enter liability to withholding tax, withholding tax canton, the tax code (for example A0N or B2Y), the municipality and, for further gainful activity, the total workload. You enter and change the tax code yourself; it is not derived from marital status and children.
3. Calculate the deduction. The payroll run calculates in the monthly and annual model with the official tariffs of all cantons, also for several gainful activities. KMU | base loads the tariffs centrally from the FTA, checks and releases them. Without a released tariff for a canton and tax code, the calculation reports a finding. You store the collection fee in the company settings per canton.
4. Monthly settlement. Under Payroll › Payroll › Reporting you create the monthly withholding tax settlement and download it as XML according to ELM 6.0. The deduction appears automatically in the payslip and in the salary certificate (item 12).
What you need to know:
- Productive transmission of the withholding tax declaration is blocked pending Swissdec certification. You submit the settlement to the canton in the way your canton provides for.
- Cross-border commuters, withholding tax for working days abroad and personnel leasing are not currently covered.
- Registration with the canton is an item of the checklist; HR | base does not send it for you.
- You check the tariff assignment yourself on marriage, birth or leaving a church, and adjust the payroll master data as of the effective date.
If you would like to try it yourself, take a look at the Demo or open a test account. If you have questions, we will help you via the Contact page.
Sources
- Federal Act on Direct Federal Taxation (DBG, SR 642.11), Art. 83–85, 88, 89, 89a and 91, as at 2 September 2026: fedlex.admin.ch (German original), accessed on 27.10.2026.
- FDF Ordinance on Withholding Tax for Direct Federal Tax (QStV, SR 642.118.2), Art. 1, 2, 3, 5, 6, 9, 10 and 12, as at 10 January 2025: fedlex.admin.ch (German original), accessed on 27.10.2026.
- FTA, Circular No. 45, Withholding tax on employment income of employees, of 12 June 2019 (annexes as at 10 October 2023): estv.admin.ch (in German), accessed on 27.10.2026. Listed as in force on the FTA overview of circulars on 27.10.2026.
- FTA, Circular No. 45, Annex III, Overview of cantons with monthly model and annual model (as at 1 January 2019): estv.admin.ch (in German), accessed on 27.10.2026.
- SSK and FTA, guidance notes on completing the salary certificate (Form 11), valid from 1 January 2026, m.no. 48: estv.admin.ch (in German), accessed on 27.10.2026.
This guide does not replace legal or tax advice. Information as at 27.10.2026.