Social insurance: updates to the guides issued by the authorities

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The guides issued by the Federal Social Insurance Office (FSIO) are daily tools of the trade for people in payroll accounting. Their practical relevance stems above all from the fact that they are up to date and give clear guidance applicable to specific situations and circumstances. The FSIO has updated the guides again in 2018.

Two documents are key for people working in payroll accounting: the WVP/DAA (Wegleitung über die Versicherungspflicht in der AHV/IV), which contains guidance on the AHV/AVS and IV/IS insurance requirements, and the WML/DSD (Wegleitung über den massgebenden Lohn), a guide to the pay applicable for social insurance purposes. The WVP/DAA helps you work out whether there are factors in a particular case suggesting that the person is subject to social insurance in Switzerland. The WML/DSD addresses non-cash employee benefits and clarifies the question of whether and to what extent these benefits are subject to AHV/AVS contributions. Below we summarise the changes that are of most importance in terms of your payroll accounting.

Changes in compulsory social insurance

The updated WVP/DAA takes account of the entry into force on 19 June 2017 of the social insurance agreement with China. This agreement does not cover the special administrative regions Hong Kong, Macao and Taiwan. Given that it only governs the applicable provisions of the law and does not provide for the export of pension benefits, it is deemed to be a bilateral agreement on the secondment of staff.

The biggest change in terms of compulsory social insurance is the use, since 1 January 2018, of the Applicable Legislation Platform Switzerland (ALPS). This online system facilitates communication with employers and the FSIO in connection with compulsory insurance (in particular applications for secondment or continuation of compulsory insurance, and reporting activity in two or more states). Following a pilot phase where various employers and social security authorities worked with ALPS, the system is now going live and must be used by all social security authorities.

The introduction of ALPS is covered in detail in the corresponding official notice (AHV/EL Mitteilung 402). The introduction of ALPS does not entail any changes to the WVP/DAA. The notice also explains various issues in the event of activity in more than one state, for example calculating the materiality limit.

Changes in assessing contributions

The latest edition of the WML/DSD no longer contains rules relating to the demarcation of responsibilities between the AHV/AVS authorities and SUVA when it comes to assessing the status of commercial travellers and contractors (self-employed versus employed status). This is because there is no legal basis. A series of margin numbers have been removed (numbers 1033, 4019, 4033-4044, and 4051-4055).

There are new arrangements governing the treatment for the purposes of contributions of WIR money paid to employees. These payments are subject to contributions in full without a discount. The WML/DSD also specifies that when WIR money is given to employees at a discount (analogous to REKA money), the difference between the value and the value at which it is purchased by the employee is, unlike REKA money, subject to contributions.

Margin number 3007 has once again been made slightly more concrete. Now it clearly specifies how an employer has to treat season tickets for public transport for contribution purposes. What has not changed is the vague formulation to the effect that a season ticket is subject to contributions if business travel is undertaken on 40 days. The question still remains as to whether 40 very short business trips justify the exemption as per margin number 3007. According to the current WML/DSD, the answer to this has to be in the affirmative.

A digression on the WBB/DP

Most HR managers are familiar with the WML/DSD and the WVP/DAA. By contrast, the main people working with the WBB/DP guide on collecting social security contributions (Wegleitung über den Bezug der Beiträge in der AHV, IV und EO) are the social security authorities that implement social insurance. It is therefore fairly rare for changes to the WBB/DP to have a direct impact on HR work within organisations.

However, one of the amendments contained in the latest edition of the WBB/DP (valid as of 1 January 2018) has explosive potential: now margin number 2035.1 on collecting unemployment insurance (ALV) contributions on retrospective salary payments has been added, and margin number 2035.3 has been augmented with an example. This is problematic. For one thing, none of the leading payroll software solutions can accommodate these rules at present. And for another, many specialists see the rule as contradictory and believe that the result of applying it is unacceptable.

Contact Us

Dominic Müller
Senior Manager and Specialist for Payroll & Employment Solutions
Tel. +41 58 792 2002
dominic.mueller@ch.pwc.com

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Dominic Müller

Dominic Müller

Senior Manager und Spezialist für Payroll & Employment Solutions

Dominic Müller stiess 2016 zu PwC. Der gelernte Jurist leitet diverse Payroll-Mandate und hat sich auf rechtliche, sozialversicherungsrechtliche und steuerrechtliche Fragen von Arbeitsverhältnissen spezialisiert. Vor seiner Tätigkeit bei PwC war er in leitender Funktion im HR-Consulting und Payroll-Bereich tätig. Im Weiteren doziert Dominic Müller an einer höheren Fachschule über das Thema Personalmanagement.