Expense Regulations in Switzerland: Tax Rules, Flat Rates, and Reimbursement Limits

Swiss tax authorities recognize various types of expenses that are considered necessary for conducting business, which may be reimbursed without incurring additional income tax. These include travel expenses, accommodation costs, meals, and other expenditures directly related to work activities. It’s essential to ensure these expenses are properly documented and meet the criteria set by the tax authorities for reimbursement.

Examples of necessary business expenses

Below are some examples of expenses that are recognized by the tax authorities as necessary for the performance of a professional activity:

• Travel expenses: Transport costs and other incidental expenses such as parking tickets and tolls associated with business-related travel are reimbursed to the employee. Transport costs are only reimbursed for travel outside of the designated place of work (i.e., the daily commute to the office is not considered a reimbursable travel expense). It is important to note that the employer may specify multiple contractual places of work within reason.
• Accommodation costs: Expenses related to overnight stays during business trips are generally recognized for reimbursement. If an employee has to spend a longer period of time working away from home on a business trip, they may also receive reimbursement for appropriate leisure and wellbeing expenses, such as visiting the gym or tickets to a show.
• Meals while traveling: Costs incurred for business-related meals outside the workplace are usually eligible for reimbursement. Meals may either be reimbursed as per the actual costs or at a flat rate. In both cases, there may be maximum allowable amounts set both by the employer and the relevant tax regulations.
• Communication expenses: Reimbursement for expenses related to the private use of an employee’s phone for business calls, personal internet usage, and other communication tools is common.
• Training and education costs: Certain costs associated with professional development, training programs, and educational courses may be recognized for reimbursement.
• Work clothing: Reimbursement of expenses for purchasing special work clothing and gear required by the employer is an interesting case. In principle, such expenses should be reimbursed by the employer; however, if these clothes are also worn outside of working hours, the employee may only receive partial reimbursement for the expense.
• Other: We have outlined a few of the main expenses which are typically recognized for reimbursement, but there are numerous other costs, both small and large which may qualify. It is dependent on the company’s own internal expense regulations, approval from the tax authorities, and relevant legislation and case law on the subject.

Note: The distinction between a reimbursable business expense and a taxable benefit in kind is not always obvious. For gifts, entertainment, and similar employee perks, separate rules apply. See our article on employee gifts and fringe benefits for more detail.

Examples of unrecognized expenses

While many different expenses incurred while conducting work are recognized for reimbursement, some do not qualify. These include:

• Personal entertainment costs.
• Personal travel expenses, including the cost of regular commute to the contractual place of work.
• Purchase of operating equipment without approval/request from the employer.
• Traffic fines, including those incurred during business-travel.
• Expenses not supported by proper documentation.
• Ordinary meals at the place of work or when working from home: while many employers may provide the added benefit of meal allowances, canteen vouchers, etc., these are typically denoted as benefits in kind and are therefore included in the wage statement as taxable income.

The implementation of expense regulations, especially those pertaining to flat-rate reimbursement, requires careful consideration, and often approval from the tax administration.

These regulations need to be explicit, well-documented, and fair. The conditions and criteria for reimbursement must be clearly communicated to employees to avoid misunderstandings and disputes.

What are expense regulations?

Expense regulations are internal policies and guidelines set by a company to govern the reimbursement of expenses incurred by employees. These regulations may cover various aspects, including eligible expenses, documentation requirements, the amount covered and the method of reimbursement.

Both flat-rate and effective expense reimbursements must be explicitly regulated by companies so that employees understand the detailed rules regarding compensation and what is required of them to claim reimbursements.

When and why should flat-rate expense regulations be approved by the tax administration?

Companies with at least ten beneficiaries of flat-rate expense reimbursements can have their flat-rate expense regulations approved by the cantonal tax authorities. This is highly recommended to avoid potential complications later.

Flat-rate expense reimbursements are legally required to roughly approximate the actual expenses incurred. By having the expense regulations approved by the authorities, the company can be certain that their reimbursements are in alignment with established guidelines and that they will not be subjected to scrutiny of their expense reimbursements down the line.

An important development from 1 January 2026: following the Federal Supreme Court ruling (ATF 148 II 504), all Swiss cantons are now required to recognise expense reimbursement regulations approved by any canton, provided those regulations comply with the FTA's standard models. This means companies operating across multiple cantons no longer need separate cantonal approvals, as a single approval now provides nationwide legal certainty. This inter-cantonal recognition is one of several key changes introduced with the updated salary certificate guidelines (Wegleitung zum Lohnausweis), effective 1 January 2026, as announced by the FTA.

Averting the dangers of hidden salary payouts

Expense reimbursements are typically tax-free for the employee. This can tempt employers and employees to engage in the illegal practice of providing hidden salary payouts by artificially inflating reimbursements and lowering the actual salary payout.

When reviewing a company’s expense regulations, the tax authorities are primarily verifying that they are not overinflated which would therefore be viewed as hidden salary payouts or tax evasion. They also verify that all reimbursement limits and guidelines are adhered to.

Companies are allowed to set their own flat-rate expense regulations without approval from the tax authorities, but they set themselves up for scrutiny from the authorities. The tax authorities can even request the actual expense receipts of the employees to determine whether there is a significant difference between the documented expenses and the flat-rate reimbursement from the company.

The risk is greater with larger expenses. This places an additional administrative burden on the company to maintain receipts in case they are audited, as well as opening them up to penalties and consequences if their expense regulations are not deemed acceptable.

To avoid such dangers, it is always best to have the expense regulations approved. If this is not possible (i.e., for smaller companies with less than ten employees receiving flat-rate reimbursements), the regulations should be drafted with the help of experts and should always closely follow all regulatory guidelines to avoid discrepancies.

Reimbursement limits

There are certain guidelines and reimbursement limits for both effective and flat-rate expenses outlined by the Federal Tax Administration (FTA). For example:

• The effective reimbursement limit for lunch is CHF 35 against the receipt, or a flat-rate allowance of CHF 30.
• The limit for car expenses is CHF 0.75 per kilometer (increased from CHF 0.70 as of 1 January 2026, following an amendment to the Berufskostenverordnung, SR 642.118.1, announced by the FTA on 11 September 2025). Note that from 2026, flat-rate car allowances paid to employees must also be explicitly indicated on the salary certificate.
• Daily flat rate allowance of maximum CHF 20 per day for small expenses.

It is important to reiterate that those receiving flat-rate allowances for small expenses can no longer claim individual expenses under the value of CHF 50 as it is assumed they are covered by the flat-rate allowance. According to the SSK model expense regulation, flat-rate representation expenses that exceed CHF 6,000 per year must not surpass 5% of the employee's gross annual salary, and are capped at an absolute maximum of CHF 24,000 per year.