Staff discount: What does it mean for the employer?

Employers can grant their employees discounts on their own products or services. These discounts can take the form of lower prices or benefits in kind.

If employees receive discounts on products or services from their employer, these discounts are considered a non-cash benefit and are taxable. The following must be observed:

1. standard market discount: a staff discount is tax-free up to a certain limit if it corresponds to the discount that is also granted to other customers or partners. Discounts that exceed this customary market limit must be taxed as income.

2. allowances: There is an allowance for staff discounts in Switzerland. For 2024, this limit is CHF 2,300. If the discount exceeds this amount, the entire amount is taxable. If the employee purchases the goods or services for their own company or resells the goods to third parties, the exemption limit does not apply.

3. declaration: The non-cash benefit resulting from excessive staff discounts must be declared in the salary statement under ‘Benefits in kind’. A distinction is made in the salary statement between assessable and non-assessable fringe benefits. While assessable benefits such as company car parks and mobile phones must be stated in terms of amount, non-assessable benefits are only stated according to their type. Where valuation is possible, benefits must be stated at market value. The employer is responsible for reporting these amounts correctly.

4   VAT: Staff discounts can also affect VAT. If the discount is so high that it pushes the sales price below the production costs, the difference must be correctly recognised in the VAT.