Conversion vacation pay obligation

Based on feedback and as part of Swissdec 5.0, we have already included the following explanations in the 2022-2023 year-end manual. If you have not yet made this adjustment, we recommend that you do so for the coming year.

Many customers already take social security deductions into account when accruing vacation pay and include this salary type in the income tax.

We recommend that you make a change here. When you have completely processed the vacation pay, please then change the duties from the accrual salary type to the payment salary type.

The regulation for income tax is with the clarifications of Swissdec 5.0 and according to feedback from tax authorities so that the vacation pay should not be taxed when the hourly wage is paid out but when the vacation pay is paid out. Accordingly, the payment salary type is to be considered as Taxable, Withholding Taxable, Withholding Tax Rate Determining with capitalization of aperiodic.

In order to avoid differences, we recommend that you also consider the social insurances only at the time of payment. Therefore, transfer the social insurance obligations from the accrual salary type to the payment salary type.

The accrual salary type should no longer have any social insurance or tax obligations.