The Centre Party wants to exempt tips from taxes and social security contributions altogether. The hospitality industry supports the move but the Swiss government does not. Under current rules, voluntary tips are generally exempt from tax and contributions. However, if a tip forms an integral part of an employee’s salary, it is treated as income and is therefore subject to tax and social security deductions. The law does not clearly define what constitutes a “substantial part” of salary. What is meant by voluntary tipping? The catering industry is one of those sectors in which service is actually included in the price. Nevertheless, some customers add a tip when paying for good service. This lack of clarity creates legal uncertainty, says Beat Imhof, president of GastroSuisse. “More payments are now made digitally. Tips are therefore more visible than when they were given in cash,” he says. “Businesses are asking themselves when digital tips must be taxed. This is causing ...
