Expenses are part of everyday business life in Switzerland – but reporting expenses is still unnecessarily tedious in many companies. Documents are lost, Excel spreadsheets are sent back and forth, and there is often uncertainty when it comes to VAT or salary statements.
The basic principle is clear: Anyone who assumes professionally necessary expenses for the company is entitled to compensation. That is exactly what the Code of Obligations regulates. At the same time, clean processes make the difference between a simple expense report and unnecessary administrative effort.
In this guide, you will find out exactly what expenses are in Switzerland, what a correct expense report looks like, what rules apply for effective and lump sum expenses, how to correctly book expenses and which mistakes SMEs should avoid. The whole thing is complemented by a specific example, a simple template and a classification of how digital tools make the process significantly more efficient.
What are expenses?
Expenses are necessary expenses that employees make in the interest of the employer and are reimbursed to them. This typically includes costs for business trips, food outside, accommodation, transportation, customer appointments or minor work-related expenses. The employer must reimburse such necessary expenses.
The distinction between wages is important: Expenses are generally not additional income, but reimbursement of expenses. That is exactly why a clean separation is essential. As soon as payments no longer represent a real business expense, expenses can become tax-relevant wages.
What is an expense report?
An expense report is the structured recording, verification and reimbursement of business expenses. It documents when an expenditure was made, what it was made for, how much it was incurred and whether a valid document is available. It is precisely this traceability that is decisive in Switzerland – in terms of employment law, tax and accounting.
A good expense report always answers the same questions:
When was the issue created? What was it needed for? Who paid for them? Is there a receipt? Is VAT included? And how is it recorded correctly? When these points are properly regulated, the expense report goes from a messy topic to a normal process.
Statutory basis for expenses in Switzerland
The legal basis in Switzerland is clear: According to Art. 327a OR, the employer must reimburse the employee for all expenses necessary for the performance of the work. In addition, there are also maintenance expenses when working abroad. This principle is not just theory, but the core of any correct expense regulation.
For companies, this means that necessary professional expenses must not simply be passed on to employees. At the same time, however, it does not mean that every submitted expenditure is automatically an expense. Business context, appropriateness and documentation are decisive. This is exactly where a clean expense report separates itself from problematic hybrid forms.
Effective expenses and lump sum charges – what's the difference?
In the case of effective expenses, the actual costs incurred are billed individually. Employees therefore submit specific receipts – for example for a train ticket, a hotel or a business dinner – and receive exactly these expenses reimbursed. This is the standard in many SMEs because it is transparent and easy to understand.
In the case of lump sum expenses, not every single expenditure is billed separately. Instead, employees receive a lump sum for certain types of expenses, such as monthly car or representative expenses. This reduces administrative costs, but is more sensitive when it comes to tax treatment. Flat-rate expenses must roughly correspond to effective expenses, and this is precisely where an approved expense regulation is recommended.
Important: Without a clean basis, there is an increased risk that lump sum expenses will no longer be regarded as genuine reimbursement of expenses but will be qualified as rewards. This is one of the most common points where companies run into problems unnecessarily.
Expense regulations – when it makes sense
Expenses regulations determine which expenses are admissible, which estimates apply, how receipts are submitted and to whom certain regulations apply. This creates internal clarity and reduces discussions. Approved regulations are particularly important for lump sum expenses because they influence tax treatment and the declaration in the salary statement.
The Swiss Tax Conference provides current information on this Sample expense regulations ready; the templates were updated as of January 1, 2026. This is relevant for companies because regulations are not simply an internal PDF, but have direct effects on declaration, documentation requirements and risk.
How does an expense report work in Switzerland?
In practice, an expense report almost always follows the same steps. First, there is a business expense. The document is then collected, the expenditure is assigned to a category, the business purpose is documented and the statement is submitted. The company then checks the positions, accounts them correctly and refunds the amount.
Expense report step by step
Make the 1st issue
As part of their work, an employee pays for necessary expenses – such as a train ticket for a customer appointment or an overnight stay in a hotel on a business trip.
2. Save document
The receipt or invoice is collected. Without a receipt, VAT and proof can quickly become problematic later on.
3. Document business purpose
It's not just the amount that counts. It must also be clear why the issue was for business – e.g. “customer appointment in Bern” or “overnight stay due to trade fair visit.”
4. Record expenses
Date, category, amount, currency, any VAT and document reference are entered. For foreign documents, the conversion rate is usually added.
5. Review and approval
The company checks whether the output is admissible, fully documented and correctly categorized.
6. Booking and refund
Only then is the expense report posted and the amount paid out – often with the salary or via a separate payout.
What expenses are typically allowed?
Professionally necessary expenses such as travel expenses, accommodation, food on business trips, transportation costs, customer invitations or minor additional expenses in connection with professional activity are typically permitted. Business use of private vehicles or private means of communication can also trigger expenses – depending on the situation.
It is not the name that is decisive, but the business context. An expense does not become an expense because it is on an expense report. It must be factually justified and comprehensible. That is an important difference, because it is precisely at this point that tax corrections occur later on.
Which expenses are not allowed?
Expenses that are not related to business, private living costs or mixed costs that cannot be divided up cleanly are not allowed. Excessive or luxurious expenditure, which cannot be plausibly justified on the basis of professional activity, is also problematic. Expenses that significantly exceed actual expenditure are also critical. In such cases, there is a risk that they will no longer be considered as compensation for expenses but will be qualified as wages. Another common mistake involves commuting to work. Expenses for normal commuting to work or daily meals cannot be billed as expenses at will and may have to be treated as wages. Anyone who works too generously or uncleanly creates unnecessary tax risks and increases the effort required for subsequent audits.
What happens without a receipt?
Without documentation, the most important basis for traceability is missing. This does not necessarily mean that every refund is impossible, but the risk increases significantly: The input tax deduction is eliminated, tax recognition is becoming more difficult and there is a risk of requalification in the event of lump sums or unclean individual cases. The document is central, especially for VAT-relevant items.
For SMEs, the practical rule is simple: No clean expense report without a clean receipt. If a document is missing, the case should be separately documented and clearly regulated internally – not simply waved through without comment.
VAT on expenses – what you need to pay attention to
When it comes to expenses, VAT is often the point where mistakes occur. Input tax deduction is only possible if a document meets the legal requirements. This applies in particular to information such as the service provider, date, amount, type of service and – depending on the case – the recipient. The VAT Act regulates these requirements in Art. 26; the federal SME portal also states that no input tax can generally be deducted without a formally correct invoice.
It is particularly important in practice: lump sum expenses without individual documents generally do not entitle you to deduct input tax. This applies, for example, to catering packages or small expenses.
Tax rates also play a role. The current standard rate is 8.1%, the special rate for accommodation 3.8%. Anyone who records hotel expenses or restaurant receipts should therefore not simply treat “everything the same.”
Book expenses correctly – this is what accounting looks like
Expenses are not an uncommon topic in accounting terms, but they must be presented cleanly. A current Swiss guideline recommends that expenses be recorded in accounts such as 6640 to 6680, depending on the type – such as travel, food, accommodation or representation. In addition, only audited and approved expense reports should be used as a basis for accounting.
When employees advance expenses themselves, they are typically recorded as creditors in the accounting department. In the case of a corporate credit card, on the other hand, the counterbooking is made directly via the credit card account. This distinction is important because it keeps the process clean and prevents queries when auditing or monthly financial statements.
Typical booking for pre-extended expenses
When an employee pays a business expense privately and is later refunded, the accounting logic usually works like this:
Expenditure/input tax on creditor employees
Later on payout:
Creditor employees at the bank
Specific example: expense report for a business trip
Let's take a customer appointment outside:
- Taxi by appointment: CHF 38.00 including 8.1% VAT
- Business dinner with customer: CHF 120.00 incl. 8.1% VAT
- Parking fees: CHF 12.00 without a VAT pass
This is a good example of why expenses cannot simply be “repaid”:
If the document is correct, input tax can be taken into account for taxis and business lunches.
When it comes to parking fees, on the other hand, often not if no VAT is shown.
It is therefore not only the amount that is decisive, but:
- Whether there is a valid document
- Whether VAT is shown
- and how the output is categorized
Meal package and kilometers – how careful you should be
Many companies work with fixed approaches for meals or trips. Such flat rates are common in practice, but must be used carefully. The decisive factor is: Flat rates are possible, but not freely selectable. They should be based on realistic costs and be clearly defined in the expense regulations.
Meal packages typically involve standardized amounts per meal or day. Mileage estimates are often used when using private vehicles. Both variants can significantly reduce administrative costs – provided that they are properly regulated and comprehensible. Anyone who sets lump sums too high or uses them without a clear basis risks that they will no longer be recognized as expenses but will be regarded as rewards. That is exactly why a consistent and well-documented approach is crucial.
Expense report template – what really needs to be included
An expense report template is simple but covers all relevant information. It is crucial that every expenditure is clearly comprehensible – both for auditing and accounting.
You can download and use an expense report template for Switzerland directly here.
Typical mandatory information is:
- Date of issue
- Category (e.g. travel, food, accommodation)
- Description or business purpose
- Amount and currency
- VAT (if available)
- document reference
In most cases, this structure is sufficient to record and correctly record expenses.
For small teams, this often still works well in Excel. As volumes grow, however, the process quickly becomes confusing – especially when there are several employees, lots of documents and recurring queries.
Common mistakes when reporting expenses
The typical mistakes are similar – regardless of company size or industry. These include missing documents, unclear reasons, incorrect VAT treatment, too rough lump sums, the mixing of private and business expenditure and an overly relaxed audit before accounting.
There is another mistake, especially for growing SMEs: The process is too manual. As long as an individual team member “somehow knows how to do it,” it still works. As soon as the volume increases, however, it quickly becomes a confusing and error-prone process.
Why many expense processes in SMEs are unnecessarily complex
In many companies, expense management still works like this: collect receipts, fill out Excel, send by email, answer queries, manually book. It works – but it scales poorly. The more employees, trips or expenses are added, the greater the loss of time, error rate and lack of transparency.
The real question is therefore not only how to settle expenses, but how to do them without friction.
How digital tools simplify expense reporting
Digital expense processes not only reduce effort, but also improve the overall quality of billing. Documents are entered directly, expenses are automatically categorized and booking suggestions are created.
This significantly reduces errors, queries and manual effort.
But the decisive difference lies elsewhere: Expenses are no longer a separate process, but part of accounting.
A document becomes a booking directly – including VAT and correct allocation. This is exactly what makes the process not only faster but also cleaner.
Conclusion
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 known, and the biggest problems almost always arise where documentation, VAT or internal rules are messy.
The following therefore applies to SMEs: A good expense report is not only accurate, but also efficient. Anyone who regulates expenses cleanly, uses clear templates and digitally supports the process saves time, reduces risks and creates transparency.
If you no longer want to process expenses via scattered receipts, Excel and manual rework, it's worth taking a look at a solution that combines document entry and accounting directly – this is where compulsory work becomes a clean process.
FAQ about expenses and expense reporting in Switzerland
Are expenses tax-free in Switzerland?
In principle, yes – provided that it is a genuine reimbursement of expenses and the expenses are correctly documented. However, if lump sums or payments are not properly justified or do they exceed the actual expenditure, they can become tax-relevant wages.
Is the employer required to pay expenses?
Yes. According to Art. 327a OR, the employer must reimburse necessary expenses that employees incur in carrying out their work.
Does every expense report require a receipt?
For clean and VAT-compliant billing, a receipt is very important in practice. In particular, input tax deduction is generally not possible without qualified document.
Are there lump sum charges in Switzerland?
Yes. Flat charges are possible, but must roughly correspond to actual expenses. For larger or systematic lump sums, approved expense regulations are highly recommended.
Can lump sum charges trigger input tax?
As a rule, no, if no individual document is available. That is exactly why effective expenses and lump sums must be clearly separated, even from a VAT perspective.
