Income Tax | Rate-determining Income from Hourly Salary

Tasks #10130 + 10131 | Added to version 5056.000 resp. 5056.002

The aim of this change in Income Tax regulations is to make so that rate determination is based on the total level of employment.

In case of multiple jobs on hourly pay, monthly percents by position with your own employer as well as percents by position with other employers must be determined. For hourly salary earners, most customers record, for example, 100% or an average percentage applicable according to the employment contract in the Percents by position field under the Wages tab. To calculate rate-determining income, workload should be determined every month based on the hours worked (actual hours).

Rate-determining income is only converted if employee also works for another employer.

To make the calculation, SwissSalary takes into account average monthly hours (monthly parts) and the ‘actual hours’ worked during the month.

Example:

On average, an employee works 182 hours for employer A. 182 hours are entered in the ‘Salary’ tab under ‘Monthly parts’. In May, the employee works 35 hours for CHF 25.00/hour. For employer B, the employee works for 30% of working time.

To determine the workload in May, the calculation is as follows:

100 / monthly parts x actual hours

= 100 / 182 x 35 = 19.23%

The total workload is 49.23% for May (employer A = 19.23% + employer B = 30%).

The income earned from employer A is now converted into total workload for rate-determining income:

actual time worked for employer A x hourly rate / percents by position with employer A x total workload

= 35h x CHF 25.00 = CHF 875 / 19.23% x 49.23% = CHF 2'240.05

The rate is searched for in the rates table based on the rate-determining income of CHF 2'240.05. Income Tax deduction of CHF 875.00 is then made from the wage subject to Income Tax using the calculated percentage.

NOTES

- Make sure that your salary types (reported number of hours and absences) are always set up correctly with assignment to correct time type and ‘actual time’ balancing.

- Employees are obliged to quickly report changes in workload with other employers to their main employer so that correct extrapolation can be made.

- If the workload or workloads with another employer or other employers are unknown and cannot be determined, just check the ‘Other known income sources’ box.

IMPORTANT: In this case, the rate-determining income is ALWAYS extrapolated to a workload of 100%, which in most cases is not in employee’s interests.

- Workloads or percents by position determined this way have nothing to do with the indication of part-time employment in a regular wage statement. The percentage recorded in the Personnel card will be shown on the wage statement as of December 31 or taken into account as of the date of resignation.