Periodic Calculation Procedure (SAP Library - Payroll Switzerland (PY-CH))

Periodic Calculation Procedure

1) Periodic calculation procedure

For the periodic procedure, only those payments made in the payroll period are relevant for determining the withholding tax base. Due to the progression, strong fluctuations in the withholding tax rate can occur.

Standard periodic calculation

To calculate the withholding tax amount, the appropriate withholding tax rate must be applied to the gross monthly wage. According to the conditions outlined above (see Calculation Example), the withholding tax rate would be 5% for a monthly gross wage of 5,000 SFr.

5,000 SFr ––> Withholding tax rate 5 %

The monthly wage is then multiplied by the withholding tax rate:

5,000 x 5 % = 250

Result: This yields a withholding tax amount of 250 SFr.

Periodic calculation with one-time payment

In the month of February, the employee receives a one-time bonus in addition to his or her monthly wages. The bonus is 5,000 SFr. In order to determine the wage that determines the base for February, the one-time payment (5,000 SFr) must be added to the gross monthly wage (5,000 SFr). The withholding tax rate to be applied is determined from the total of the gross monthly wages and the one-time payment.

5,000 + 5,000 = 10,000 ––> Withholding tax rate is 10 %

The wage that determines the rate is then multiplied by this withholding tax rate.

10,000 x 10 % = 1,000

Result: Withholding tax for February amounts to 1,000 SFr.

Periodic calculation with an entry/leaving during the month

The cantonal tax offices stipulate different procedures for calculating the withholding tax deduction for entry/leaving during the month. The following guideline is, however, valid. To determine the tax bracket and the corresponding withholding tax rate, you must calculate the wages that the employee would have earned had he or she worked the entire month.

The employee leaves on March 15^th. For the partial monthly wage, the employee must pay with the same rate as if he or she had earned wages for a full wage period. This means that you must project the partial wage on to the entire monthly wage.

The partial wage is calculated according the company regulations. Usually, the entire wage is multiplied by the number of tax days (= working days). The product is then divided by the number of the total tax days (= calendar days):

5,000 x 15/30 = 2,500

To calculate the monthly wage that determines the rate, the proportion of the wage is multiplied by the number of the total possible tax days (= calendar days). The product is then divided by the actual tax days (= working days).

2,500 x 30 / (divided by) 15 = 5,000 -–> Withholding tax rate is 5 %

The portion of the monthly wage is then multiplied by this withholding tax rate.

2,500 x 5 % = 125 SFr

Result: The withholding tax for March amounts to 125 SFr.

The procedures for withholding tax calculation differ in the variant that determines how time-period-dependent pay is projected. In the SAP system, these are called variants for partial period calculation.

The following variants for partial period calculation are listed in the guidelines published by the cantonal tax administrations. They are explained using an example of an entry as of 01/16 with earnings of 2,500 SFr for the period from 01/16 to 01/31. - 31.01. .

30: Entire month with 30 days; partial month with actual calendar days
30 days count as an entire month. The days of a partial month are calculated according to the formula 30 – day of entry + 1.
Projected income: 2,500 (multiplied by) 30 / 15 = 5,000
This rule is valid for most cantons.

31: Entire month and entire month with actual calendar days
The days of an entire month and those of a partial month are counted according to the calendar.
Projected income : 2,500 (multiplied by) 31 / 16 = 4,843.75. The procedures for withholding tax calculation differ in the variant that determines how the time-period-dependent pay is projected.
This rule is valid for the canton of Zurich.

30: Entire month with 30 days; partial month with actual calendar days
30 days count as an entire month; the days of an entire month are counted according to the calendar.
Projected income: 2,500 (multiplied by) 30 / 16 = 4,687. 50
This rule is valid for the following cantons: AR, GL, SG, and UR.

Periodic calculation with entry/leaving during the month and one-time payment

The employee leaves the company on March 15^th. However, he or she receives both a monthly wage and a one-time payment of 5,000. SFr.
The partial monthly wage must be projected to the full monthly wage as in example b). To determine the monthly wage that serves as a base for the rate, the amount of the one-time payment must be added.
5,000 + 5,000 = 10,000 ––> Withholding tax rate = 10%
The one-time payment is added to the partial payment. The sum of this operation is multiplied by the withholding tax rate.
2,500 + 5,000 = 7,500
7,500 x 10 % = 750

Result: Withholding tax for the March payroll period is 750 SFr.