CONVINUS Global Mobility Alert - Week 41.2025

BEST PRACTICEIn

BEST PRACTICEIn Switzerland, the allowance is also subject to social security contributions.As the allowance is stated as a gross amount, the employee contributions must be deducted fromthis.The result is different if Mr Steiner is reimbursed for the actual moving costs. In this case, thereimbursement is exempt from tax and social security contributions.The extent to which no tax is payable on this amount depends on the country of assignment.Travel costs at the start and end of the assignmentIn this case, the reimbursement of travel expenses for Mr Steiner can be made tax- and socialsecurity-free. However, this must always be checked for each country of assignment or country inwhich social security contributions are payable.However, the travel expenses for the wife and children are subject to tax and social securitycontributions. If the corresponding employee costs are covered by the employer, these must begrossed-up.Bonus paymentIn principle, tax law stipulates that tax liability arises at the time of payment of a bonus. However, itmust be checked to which period the bonus relates, and taxation usually takes place in thecountries where the employee has worked.The bonus paid in April 2029 relates to the period from January to December 2028. During thisperiod, Mr Steiner will be in Manchester until 31 October 2028. For this reason, England has the rightto tax 10/12ths and Switzerland has the right to tax 2/12ths.The same distribution is applied in the area of social security.However, Mr Steiner will remain in the Swiss social security system during his assignment and willbe subject to the Swiss insurance system again after his return to Switzerland. Therefore, socialsecurity contributions are payable in Switzerland.8convinus.com

BEST PRACTICEConclusionThese examples show that each individual remuneration component must be examined separatelyin terms of tax and social security obligations in the home country and the country of assignment.The place of payment does not necessarily have to be the country in which tax or social securitycontributions are payable for this remuneration component.As the employer is responsible for paying these contributions, it is necessary to clarify this andensure that these contributions are declared correctly.9convinus.com