Expenses must always be business-related. Only the client or the company where the work is performed can determine at any time whether the expenses are business-related. In the event of an AHV/SUVA audit, payroll+ would have great difficulty verifying these expenses.
For this reason, we strongly recommend that freelancers, contractors, and employees bill their expenses directly to the client or the company where they are working.
Billing Directly Through the Customer
The advantage for freelancers, contractors, and employees of receiving direct payment from the client or the company where they are assigned is that this payment is not considered part of their wages, since the client or the company where they are assigned does not pay wages and therefore does not have to issue a wage statement. If payroll+ pays the freelancer, contractor, or employee their wages plus expenses, this may be considered a wage component subject to AHV contributions. If it is considered part of the salary, a corresponding note will be made on the salary statement (see “Guidelines for Filling Out the Salary Statement or Pension Certificate,” Form 11).
Payroll processing by payroll+
Input Tax on Expenses
When paying business expenses, it is permissible to claim a VAT refund provided certain formal requirements are met. One of these requirements is the name and address of the recipient of the service. In this case, the company name as listed in the commercial register must be provided in full and without alteration.
If expenses are processed through payroll+, payroll+ cannot deduct the VAT as input tax from the submitted expense receipts, since payroll+ is not the recipient of the services listed on the submitted expense report. payroll+ must invoice the total amount of the expense report plus an additional 8.1% VAT and a margin of 1–3%. You may claim the input tax deduction only on the VAT charged by payroll+.
Expenses must always be business-related and justified.
Furthermore, employees can submit expense receipts for business-related expenses to your company using an expense form, and only you can effectively determine whether an expense is business-related or not.
Since payroll+ cannot verify business compliance, this will lead to many questions during an AHV and VAT audit that we will not be able to answer.
For the reasons mentioned above, and so that you can save money, we recommend that you bill your expenses through your company rather than through payroll+.
If the client/assigning company does not wish to make a direct payment to the freelancer, contractor, or employee, and the freelancer, contractor, or employee is aware that a corresponding note will appear on the wage statement and is aware of and accepts the reasons stated above, he or she may claim expenses through us. In accordance with the expense regulations approved by the Schwyz Cantonal Tax Administration on July 20, 2017, the following can be claimed: 1. actual expenses based on submitted original receipts and/or 2. flat-rate expenses amounting to 5% of gross pay. In addition to the original receipts, payroll+ requires a letter signed by the freelancer, contractor, or employee containing the following text: “I hereby confirm with my signature that these are business-related expenses.”
If a freelancer, contractor, or employee acts with fraudulent intent when claiming expenses, they are liable to criminal prosecution. They are required to review the expense policy and strictly comply with it.
Expense Reports in the Online Tool:
You can bill the customer for the expenses as usual. Please fill out our expense form (Excel file available for download). Once your customer has paid the invoice, you can include the expense amount when creating the work report and upload the expense form and supporting documents.
Notes on the Pay Statement
Flat-rate expenses are reported by amount under Section 13.2.1.
Expenses in Foreign Currency
Expense amounts in a foreign currency must be converted to Swiss francs directly by the freelancer, contractor, or employee. If the invoice is already issued to the client in a foreign currency, it will be converted to Swiss francs once the payment is received by payroll+.