News Salary Administration / Social Security Insurances

Withholding Taxation Amendments 2021

With the changes from January 1, 2021, the employer is now responsible for applying the correct withholding tax rate.


The Federal Law of 16th December 2016 on the revision of the Withholding Taxation of Income from Employment has revised the basis for the withholding taxation. These changes will come into force on 1st January 2021.


The aim of the withholding tax reform was to standardize and simplify the withholding tax provisions in Switzerland. As a result, various changes and corrections will be made to the withholding taxation as of 1st January 2021.


The most important changes as of January 1, 2021:

  • The definition of income subject to withholding tax will be unified throughout Switzerland. Accordingly, there will be no longer any differences in taxable salary components between the cantons.
  • Withholding tax must now be settled with the employee's canton of residence or domicile.
  • The rates will be applied uniformly by the cantons.
  • The calculations of the withholding tax on wage components before entry, during employment and after leaving the company have been partially adjusted. As a result, it is possible that from January 1, 2021 onwards, remuneration may have to be settled with withholding tax in a different way than previously.
  • The withholding tax rate for the 13th monthly salary in the monthly model must now be determined using a special calculation formula.
  • For irregular hourly wage earners a uniform rate determination applies.
  • The requirements for filing a tax return (subsequent ordinary assessment) have been adjusted and extended.
  • The “application for tax tariff correction” no longer applies and the so-called "recalculation of withholding tax" is newly introduced, but for conclusively determined situations only.
  • All completed withholding tax rulings will be cancelled as of 31st December 2020.


Important: From January 1, 2021, the employer is now responsible for the application of the correct withholding tax rate! Therefore, in the future the employer will have to collect even more information about his employees liable to withholding tax than before. In the future, it is important that the employer is aware of any other employment of the employee, any employment of the partner or any replacement income. Only if the employer has all the information about the employee, it will be possible for him to define the correct tax at source rate for his employee. The cooperation between the HR department and the employee will therefore be even more important in the future.


What needs to be done now?

  • Complete all personnel data of the employees concerned (other employers, partners with gainful employment, replacement income, etc.).
  • Train your employees on their reporting obligations to you as the employer
  • Check the payroll accounting program to see, if it can correctly implement the new features as of January 1, 2021 (entries and exits, back payments, 13th month's salary, hourly wage, etc.)


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Reto Leisibach 21 September 2020


Keywords: withholding tax, changes 2021, payroll