Business expenses are part of everyday working life in Switzerland – yet in many companies, expense reporting is still needlessly tedious. Receipts get lost, Excel sheets are emailed back and forth, and there is often uncertainty about VAT or the salary certificate.
The basic principle is clear: anyone who pays for necessary work-related costs on behalf of the company is entitled to be reimbursed. That is exactly what the Swiss Code of Obligations sets out. At the same time, a clean process is what separates a simple expense report from unnecessary admin.
In this guide, you'll learn what business expenses are in Switzerland, what a correct expense report looks like, which rules apply to actual and flat-rate expenses, how to book expenses properly and which mistakes SMEs should avoid. It is rounded off with a concrete example, a simple template and a look at how digital tools make the whole process far more efficient.
What are business expenses?
Business expenses are necessary costs that employees incur in the employer's interest and that are reimbursed to them. They typically include business travel, meals away from the usual place of work, overnight stays, transport, client meetings or smaller work-related purchases. The employer is obliged to reimburse such necessary expenses.
The distinction from salary is important: expenses are not additional income but a reimbursement of costs. That is exactly why a clean separation matters. As soon as payments no longer reflect a genuine business cost, expense allowances can turn into taxable salary.
What is an expense report?
An expense report is the structured recording, review and reimbursement of business expenses. It documents when a cost was incurred, what it was for, how much it was and whether a valid receipt exists. In Switzerland, this traceability is what counts – under employment law, for tax purposes and in the accounts.
A good expense report always answers the same questions:
When was the cost incurred? Why was it necessary? Who paid for it? Is there a receipt? Does it include VAT? And how is it booked correctly? Once these points are properly settled, expense reports go from a chaotic chore to a routine process.
Legal basis for business expenses in Switzerland
The legal basis in Switzerland is clear: under Art. 327a of the Code of Obligations (OR), the employer must reimburse employees for all expenses necessary to perform their work. When work is carried out away from the usual place of work, this also covers the employee's living costs there. This principle is not just theory – it is the core of any sound expense policy.
For companies, this means that necessary work-related costs cannot simply be passed on to employees. At the same time, not every expense that is submitted automatically counts as a business expense. What matters is the business connection, whether the cost is reasonable and whether it is documented. This is where a clean expense report differs from problematic grey areas.
Actual expenses vs. flat-rate expenses – what's the difference?
With actual expenses, the costs actually incurred are reimbursed item by item. Employees submit specific receipts – for a train ticket, a hotel or a business lunch, for example – and are reimbursed exactly these amounts. This is the standard in many SMEs because it is transparent and easy to follow.
With flat-rate expenses, individual costs are not claimed one by one. Instead, employees receive a fixed amount for certain types of costs, such as a monthly car allowance or entertainment allowance. This reduces admin but is more sensitive from a tax perspective. Flat-rate expenses must roughly match the actual costs, and this is precisely where approved expense regulations are advisable.
Important: without a sound basis, there is a higher risk that flat-rate expenses are no longer treated as a genuine reimbursement of costs but as salary. This is one of the most common points where companies run into avoidable problems.
Expense regulations – when they make sense
Expense regulations define which expenses are allowed, which rates apply, how receipts are submitted and who certain rules apply to. This creates clarity internally and cuts down on discussions. Approved regulations are especially important for flat-rate expenses because they affect the tax treatment and how the expenses are declared on the salary certificate.
The Swiss Tax Conference publishes up-to-date model expense regulations for this purpose; the templates were updated as of 1 January 2026. This matters for companies because expense regulations are not just an internal PDF – they have a direct impact on declarations, documentation requirements and risk.
How does an expense report work in Switzerland?
In practice, an expense report almost always follows the same steps. First, a business cost is incurred. The receipt is then collected, the expense is assigned to a category, the business purpose is documented and the report is submitted. The company then reviews the items, books them correctly and reimburses the amount.
Expense reporting step by step
1. Incur the expense
As part of their job, an employee pays for a necessary expense – a train ticket to a client meeting, for example, or a hotel night on a business trip.
2. Keep the receipt
The receipt or invoice is kept. Without a receipt, VAT and proof quickly become a problem later on.
3. Document the business purpose
The amount alone is not enough. It must also be clear why the expense was business-related – e.g. "client meeting in Bern" or "overnight stay for trade fair visit".
4. Record the expense
Date, category, amount, currency, any VAT and a receipt reference are recorded. For foreign receipts, the exchange rate is usually added as well.
5. Review and approval
The company checks whether the expense is allowed, fully documented and correctly categorised.
6. Booking and reimbursement
Only then is the expense report booked and the amount paid out – often together with the salary or as a separate payment.
Which expenses are typically allowed?
Typically allowed are necessary work-related costs such as travel, overnight stays, meals on business trips, transport, client entertainment or smaller incidental costs connected with the job. Using a private car or private communication devices for business can also give rise to expenses, depending on the situation.
What counts is not the label but the business connection. An expense does not become a business expense just because it appears on an expense report. It must be objectively justified and traceable. This is an important distinction, because this is exactly where tax adjustments happen later on.
Which expenses are not allowed?
Costs without a business connection, private living costs or mixed costs that cannot be cleanly split are not allowed. Excessive or luxurious spending that cannot plausibly be justified by the job is also problematic, as are expenses that clearly exceed the actual costs. In such cases, there is a risk that they are no longer treated as a reimbursement of costs but as salary. Another common mistake concerns the commute. Costs for the normal journey to work or everyday meals cannot simply be claimed as expenses and may have to be treated as salary. Being too generous or sloppy here creates unnecessary tax risks and makes later audits more work.
What happens without a receipt?
Without a receipt, the most important basis for traceability is missing. This does not necessarily mean that no reimbursement is possible, but the risk rises sharply: the input tax deduction is lost, tax recognition becomes harder, and flat rates or poorly documented individual cases may be reclassified.
The receipt is central for VAT-relevant items in particular. Documentation is also clearly regulated by law: companies are required to document business transactions in a traceable way and to retain receipts (among others under Art. 958f OR and Art. 3 and 8 of the Ordinance on Accounting Records, GeBüV).
For SMEs, the practical rule is therefore simple: no clean expense report without a clean receipt. If a receipt is missing, the case should be documented separately and handled under a clear internal rule – not simply waved through without comment.
VAT on expenses – what you need to watch out for
VAT is often where mistakes happen with expenses. Input tax can only be deducted if a receipt meets the legal requirements. This concerns details such as the supplier, date, amount, type of goods or service and – depending on the case – the recipient. The VAT Act (MWSTG) sets out these requirements in Art. 26; the federal SME portal also states that, as a rule, input tax cannot be deducted without a formally correct invoice.
In practice, one point is especially important: flat-rate expenses without individual receipts generally do not entitle you to deduct input tax. This applies, for example, to flat-rate meal allowances or flat rates for minor expenses.
VAT rates also play a role. The current standard rate is 8.1 %, the special rate for accommodation 3.8 %. So if you book hotel expenses or restaurant receipts, you shouldn't simply treat "everything the same".
You'll find a detailed explanation in our separate guide to VAT on expenses in Switzerland.
Booking expenses correctly – what it looks like in the accounts
From an accounting perspective, expenses are nothing unusual, but they need to be recorded cleanly. A recent Swiss guide recommends booking expenses to accounts such as 6640 to 6680 depending on their type – for example travel, meals, accommodation or entertainment. In addition, only reviewed and approved expense reports should serve as the basis for bookings.
If employees pay costs out of their own pocket, they are typically recorded as a creditor in the accounts. With a company credit card, on the other hand, the contra entry goes directly to the credit card account. This distinction is important because it keeps the process clean and avoids follow-up questions during an audit or the month-end close.
Typical booking for expenses paid by the employee
When an employee pays a business expense privately and is reimbursed later, the booking logic is usually as follows:
Expense / input tax to creditor employees
Later, when the amount is paid out:
Creditor employees to bank
A concrete example: expense report for a business trip
Let's take a client meeting off-site:
- Taxi to the meeting: CHF 38.00 incl. 8.1 % VAT
- Business lunch with the client: CHF 120.00 incl. 8.1 % VAT
- Parking fees: CHF 12.00 without VAT shown
This shows nicely why expenses are not simply a matter of "paying people back":
For the taxi and the business lunch, input tax can be claimed – provided the receipt is correct.
For the parking fees, on the other hand, this is often not possible if no VAT is shown.
So what matters is not just the amount, but:
- whether there is a valid receipt
- whether VAT is shown
- and how the expense is categorised
Meal allowances and mileage – how careful you should be
Many companies use fixed rates for meals or journeys. Such flat rates are common in practice but must be used with care. The key point is: flat rates are possible, but you can't set them however you like. They should be based on realistic costs and be clearly defined in the expense regulations.
Meal allowances typically consist of standard amounts per meal or per day. For business use of a private car, mileage rates are common. Both can reduce admin considerably – provided they are properly regulated and traceable. If you set flat rates too high or use them without a clear basis, you risk them no longer being recognised as expenses but treated as salary. That is exactly why a consistent, well-documented approach is essential.
Expense report template – what really needs to be in it
An expense report template is simple, yet it covers all the relevant information. What matters is that every expense is clearly traceable – both for the review and for the accounts.
You can download an expense report template for Switzerland here and use it right away.
Typical required details are:
- Date of the expense
- Category (e.g. travel, meals, accommodation)
- Description or business purpose
- Amount and currency
- VAT (if any)
- Receipt reference
In most cases, this structure is enough to record expenses cleanly and book them correctly.
For small teams, Excel often still works well. As volumes grow, however, the process quickly becomes hard to keep track of – especially with several employees, lots of receipts and recurring follow-up questions.
Common mistakes in expense reporting
The typical mistakes are much the same regardless of company size or industry. They include missing receipts, unclear justifications, incorrect VAT treatment, overly rough flat rates, mixing private and business expenses, and too lax a review before booking.
Growing SMEs in particular face one more problem: the process is too manual. As long as one team member "somehow knows how it works", things still run. But as soon as volumes grow, it quickly becomes a confusing, error-prone process.
Why many expense processes in SMEs are needlessly complicated
In many companies, expense management still works like this: collect receipts, fill in Excel, send it by email, answer questions, book it manually. It works – but it scales badly. The more employees, trips or expenses you add, the more time is lost, the more errors creep in and the less transparent everything becomes.
So the real question is not just how to settle expenses, but how to do it without friction.
How digital tools simplify expense reporting
Digital expense processes not only reduce effort but improve the overall quality of expense reporting. Receipts are captured directly, expenses are categorised automatically and booking suggestions are created.
This significantly reduces errors, follow-up questions and manual work.
The decisive difference lies elsewhere, though: expenses are no longer a separate process but part of the accounting.
A receipt turns straight into a booking – including VAT and the correct allocation. That is exactly what makes the process not only faster but also cleaner.
Conclusion
Business expenses and expense reports in Switzerland are not a side issue but a central part of clean business processes. The legal basis is clear, the typical mistakes are well known, and the biggest problems almost always arise where documentation, VAT or internal rules are sloppy.
For SMEs, this means: a good expense report is not only correct but also efficient. If you regulate expenses properly, use clear templates and support the process digitally, you save time, reduce risk and create transparency.
If you no longer want to handle expenses with scattered receipts, Excel and manual rework, it's worth looking at a solution that brings receipt capture and accounting together – that is where a mandatory chore becomes a clean process.
FAQ on business expenses and expense reports in Switzerland
Are business expenses tax-free in Switzerland?
In principle, yes – provided they are a genuine reimbursement of costs and correctly documented. However, if flat rates or payments are not properly justified or exceed the actual costs, they can become taxable salary.
Is the employer obliged to reimburse expenses?
Yes. Under Art. 327a OR, the employer must reimburse necessary expenses that employees incur in carrying out their work.
Does every expense claim need a receipt?
For a clean, VAT-compliant expense report, a receipt is very important in practice. Without a qualifying receipt, the input tax deduction in particular is generally not possible.
Are flat-rate expenses allowed in Switzerland?
Yes. Flat-rate expenses are possible but must roughly match the actual costs. For larger or systematic flat rates, approved expense regulations are highly advisable.
Can flat-rate expenses be used to claim input tax?
As a rule, no, if there is no individual receipt. That is exactly why actual expenses and flat rates should also be kept clearly separate from a VAT perspective.