Which costs can be deducted from taxes in case of home office?
According to the home office recommendation of the swiss federal council of 18.10.2020, employers have increasingly relocated their workplaces to the private living quarters of personnel. More and more employees are working from home at least temporarily due to the corona pandemic. Which home office expenses can employees deduct from their taxes?? Does this invalidate the claim for travel and subsistence expenses??
You can find out here when a home office is tax deductible and what conditions the federal government and cantons impose.
When is a workroom tax deductible?
Expenses for travel between the place of residence and the place of work, meal costs for appointments away from home as well as a work room used for professional purposes in the private living quarters belong to the deductible professional expenses. They can be claimed instead of the lump-sum deduction for other professional expenses.
However, there are conditions that must be fulfilled together. If a condition is not met, the deductibility is not given.
In principle, the tax deduction is possible if:
- …The employer does not offer a workplace to his employee or this is not reasonable or. Is not usable. Voluntary use of a home office, even though a workplace is available in the company, does not meet the conditions for deductibility.
- …The employee regularly performs a substantial part of his or her working time in the home office.
- …A separate room within the private living area is made available for this purpose and this is used exclusively as a home office. Mixed use as a work and hobby room is not permitted. Even the popular kitchenette or the use of a spacious hallway as a workplace is not sufficient.
The taxpayer is required to provide proof to the tax authorities. In order to prove that the requirements are met, photos of the workplace and the laptop etc. Can be taken, for example. Are made.
What applies if the employer partially offers a workplace?
If the employer offers a workplace in his company, but not 100%, it becomes difficult for tax purposes. If, for example, the company only provides a workplace for 80% of the working time, this home office quota is not sufficient for a tax deductibility.
The federal supreme court held in its ruling of 31.05.2018 (bger 2C_1033/2017) the view that if only 20% of the work is done at home, this is too small a part of the work performed at home. Thus, the requirements for the tax deduction are not met. Possible costs in this case are already covered by the flat-rate professional expense allowance.
Caution: permanent establishment
Not only employees should be well informed about tax rights and obligations. Employers can also experience unpleasant tax surprises when offering a home office. If employees work to a considerable extent in a home office, where they also carry out significant activities, the tax authorities can declare this location as an independent place of business. If this is the case, the employer must pay taxes at the location of the home office. This is a risk especially if cross-border commuters reside within germany.
How to calculate the deduction of a workroom?
You can calculate for yourself how much the deductibility of a workroom is worthwhile. Note that most tax offices provide for two adjoining rooms. If the home office is not used 100% for business, the share of private use must be deducted from the rental costs.
- Gross rent p. A. CHF 24,000: 6 rooms (4 rooms+2 adjoining rooms) = CHF 4,000 tax deduction
- If the employee owns residential property in the home office, the calculation is based on the imputed rental value.
When is it worthwhile to deduct the work room?
If you meet the requirements for deductibility, it may be worthwhile to claim the workroom for tax purposes.
Because these deductions are permissible:
- According to the size of the workroom, a rent share can be claimed for tax purposes.
- Electricity costs for lighting, IT equipment and other devices can be deducted as well as cleaning and furnishing costs of the workroom.
- Heating costs and costs for air conditioning units can also be claimed.
- Last but not least working material, pro rata insurance contributions and account fees.
If a taxpayer declares the actual costs for the study and if these exceed the lump-sum deduction for professional expenses, it is worthwhile to declare further professionally related costs. This includes professional literature, professional clothing, contributions to professional associations, hardware and software, etc.
Every taxpayer is obliged to provide correct and verifiable information. Tax offices review costs in detail that are deductible for use of a home office.
How much are the lump sums?
At the federal level, 3% of net wages can be claimed for tax purposes, minimum CHF 2,000, maximum CHF 4,000. Instead of the flat rate, you can also claim the detailed proven costs. It is not possible to combine flat rate and cost.
Tip: the tax deductibility of the actual costs is only worthwhile if these are higher than the professional expense allowance and compensate for a possible reduction in travel and subsistence expenses. The longer the home office assignment and the higher the ratio of rent to income, the more likely the expense is worthwhile.
New situation due to corona pandemic
After the federal council of switzerland called for increased use of working from home due to the corona pandemic, many employers have complied with this demand. They obliged employees to work from home and did not provide a workplace at the place of business. If the employee can show a separate room for exclusive use as a home office, all tax requirements are met.
Deductible workroom expenses are determined differently depending on the canton. Travel expenses and catering costs are not incurred due to home office activity. As the demands on employees in the context of the corona pandemic are particularly high, some cantons have decided to continue to recognize travel and meal costs instead of home office costs, as if the employee were working on company premises. The flat rate for other professional expenses also remains and can be claimed additionally.
This approach saves the administration costs and effort. The cantons of obwalden and bern only require an additional confirmation that the work in the home office is necessary and how long it is expected to last.
| Canton | tax deductibility available upon audit | claiming travel and subsistence expenses instead of deducting workroom expenses |
| bern (BE) | yes | no |
| lucerne (LU) | yes | no |
| obwalden (OW) | yes | no |
| nidwalden (NW) | yes | no |
| aargau (AG) | yes | no |
| thurgau (TG) | yes | no |
| appenzell ausserrhoden (AR) | yes | no |
| st.Gallen (SG) | yes | no |
| glarus (GL) | yes | no |
| ticino/ticino (TI) | yes | no |
| neuchatel/neuchatel (NE) | no | yes |
| fribourg/freiburg (FR) | no | yes |
| valais/wallis (VS) | no | yes |
| geneve/geneva (GE) | no | yes |
| solothurn (SO) | no | yes |
| basel-landschaft (BL) | no | yes |
| basel-city (BS) | no | yes |
| schaffhausen (SH) | no | yes |
| zurich (ZH) | no | yes |
| train (ZG) | no | yes |
| schwyz (SZ) | no | yes |
| uri (UR) | no | yes |
| law (JU) | n.B. | N.B. |
| Vaud/waadt (VD) | special regulations | special regulations |
| grisons (GR) | special regulations | special regulations |
| appenzell inner rhodes (AI) | special rules | special rules |
Do employer's compensation payments have to be taxed?
According to the federal supreme court (bger 4A_533/2018), if employers offer a workplace and occasionally allow work in a home office, they are obliged to provide compensation for the use of the home office (art. 26 DBG). Such compensation (art. 327a OR) constitute a salary component that is taxable, regardless of the amount. In addition, compensation is subject to social security contributions. The background: this is the reimbursement of professional expenses, not expenses.
If the employer does not provide a job, he is obliged to reimburse compensation (bger 4A_533/2018). According to the federal supreme court, the employee must reimburse all expenses incurred as a result of the activity. This reimbursement is not a professional expense, but is billed as an expense.
This reimbursement of expenses does not count as part of the relevant salary for AHV purposes. This also applies to the reimbursement of IT costs, internet and telephone, office equipment, materials, etc. The background: the costs are incurred during the activity and not before or during the period of employment. Afterwards as taxable professional expenses such as travel expenses o. A.
Get car or public transit deducted if you work from home office?
On days when the employee works in a home office rather than on the job, there are no travel or meal expenses for off-site activities. Therefore, the taxpayer is not entitled to these.
However, in the context of the corona pandemic, some cantons have decided to grant tax relief. You continue to pay travel and meal expenses instead of deducting the specific home office expenses. The tax offices save themselves and the taxpayers a lot of time and effort.
Bottom line: tax hurdles to home office deductibility are high
Only if all requirements are met cumulatively for a home office can the expenses be claimed, depending on the canton. The expense may be worthwhile because deductible expenses include the prorated rent, heating, electricity, and telephone costs. Some cantons take an economic approach and continue to reimburse travel and meal costs in addition to the flat rate for other professional expenses.
But it remains difficult, because if you want to deduct your home office expenses, you have to meet a number of conditions that vary from canton to canton. Best to check with your tax office in advance.