The simplified settlement procedure is an administrative relief for anyone who employs someone with a low income (e.g. domestic help) or who has several employees with a smaller total annual payroll.
Employers of domestic help can register with the compensation office for the so-called simplified settlement procedure (BGSA) with tax deduction. In this procedure, which has been established specifically for domestic help, all employees are taxed at a flat rate of 5%, regardless of their residence status or nationality (i.e. including Swiss nationals). This offers employers the advantage that no additional administrative expenses are incurred for the payment of withholding tax at the cantonal tax office.
However, the registration to the simplified procedure is only possible if the gross salary of the individual employee does not exceed CHF 1,837.50 per month or CHF 22,050 per year. The total gross salary of all the employees at the company or employer may not exceed CHF 58,800 per year.
If these criteria are not met, the private employer is registered with the compensation office in the ordinary procedure.
There are the following two possibilities for a voluntary change of procedure:
Registration with the compensation office has already taken place
Due to the regulations of the compensation offices, a change in the settlement procedure after registration has taken place is only possible in the following year. An exception exists if the salary of the employed person is above the BVG entry threshold. If you wish to make a change, we require confirmation from you so that we can make the change on January 1st of the following year. Please note that the settlement procedure concerns all your employed persons in the corresponding calendar year - including future ones (if any).
Registration with the compensation office not yet completed
If your registration with the compensation office has not yet been sent and you notify us within 24 hours, we have the option of registering with the compensation office using the ordinary settlement procedure.
For your information:
-In certain cantons it is not possible to register cross-border commuters in the simplified procedure.
-The registration with the SVA must be done within 30 days after the start date of the contract.
-No employees of retirement age (unless there is another employee.)
You can find more information about the settlement procedures at the following link: What is the difference between the ordinary and the simplified settlement procedure?