Net salary accounting consists of recording in the accounting only the amounts actually paid to employees. It is a simple and practical method, particularly suitable when payroll processing is carried out using dedicated payroll software or outsourced to a fiduciary firm.

Compared with gross salary accounting, it provides a less detailed view of personnel costs, as it does not separately show the employer's social security contributions and the contributions withheld from employees.

For this reason, the calculation of gross salaries, deductions, and social security contributions is performed by the payroll software or by a fiduciary firm, which submits the required declarations to the relevant authorities. The annual declaration to the AHV Compensation Office is based on the gross payroll, which must be determined from the payroll statements.

What is recorded

With net salary accounting, the following items are normally recorded in the accounting:

• net salaries paid to employees
• advance payments of social security contributions (AHV/IV/EO/ALV), paid monthly or quarterly
• insurance and pension premiums, paid at the beginning of the year or every six months.
• any year-end adjustments.

What is not recorded:

• Gross salary
• Employee deductions
• Liabilities towards social security institutions at the end of the period.

Advantages of net salary accounting

• Simple transactions
• Few accounts to manage
• Faster accounting.

Limitations of net salary accounting

• The gross salary does not appear in the accounting.
• The details of employee salary deductions are not visible.
• Employer and employee contributions are not shown separately.

When to use net salary accounting

Recording salaries on a net basis is recommended when payroll management is handled by payroll software or by a fiduciary firm, and the main purpose of the accounting is to record payments and accounting transactions.

It is particularly suitable when:

• the details of salaries, deductions, and social security contributions are managed outside the accounting
• there is no need to analyse personnel costs separately in the accounting
• you want to keep the accounting simpler and reduce the number of transactions.

Accounts normally used

Only a few accounts are normally required to manage net salaries.

Expense accounts

• 5000 Salaries
• 5700 AHV/IV/EO/ALV Contributions
• 5710 Family allowance fund contributions
• 5720 Mandatory occupational pension contributions
• 5730 Occupational accident insurance premiums
• 5740 Daily sickness allowance insurance
• 5790 Withholding tax

Payment accounts

• 1020 Bank
• Another cash account.

Distinction between the employer's share and the employee's share

With net salary accounting, the accounting records do not directly show the allocation of social security contributions between the employer's share and the share withheld from employees.

Payments made to social security institutions (AHV, occupational pension fund, insurance companies, and other institutions) generally include both shares and are recorded as total amounts. Consequently, it is not possible to identify the employer's share directly from the accounting entries alone.

To determine it, you need to refer to:

• the expense accounts dedicated to social security contributions
• the payroll statements generated by the payroll software.

The accounting correctly records the total personnel cost, while the detailed allocation of contributions is provided by the payroll statements.

Payment of net salaries

When paying employees, the net salary paid is recorded.

In the Transactions table, record the following each month:

• Date: the salary payment date
• Description: the payment description
• Debit: account 5000 Salaries
• Credit: the Bank account

Periodic payment of social security contributions

When paying advance social security contributions, record:

• Date: the payment date of the social security contributions
• Description: the payment description
• Debit: account 5700 AHV/IV/EO/ALV Contributions
• Credit: the Bank account
• Amount: enter the amount of the social security contributions (shown on the advance invoice), including both the employer's share and the employee's share.

Annual payment of insurance premiums

When paying insurance premiums, for example Occupational Accident Insurance or supplementary Occupational Accident Insurance, record the payment to the insurance company.

• Date: the annual insurance premium payment date
• Description: the payment description
• Debit: account 5730 Occupational accident insurance premiums
• Credit: the Bank account
• Amount: enter the amount shown on the invoice. It includes both the employer's share and the employee's share.

Annual payment of the pension fund premium

When paying the annual occupational pension fund premium:

• Date: the annual pension fund premium payment date
• Description: the payment description
• Debit: account 5720 Mandatory occupational pension contributions
• Credit: the Bank account
• Amount: enter the amount shown on the invoice. It includes both the employer's share and the employee's share.

Payment of the daily sickness allowance insurance premium

When paying the annual daily sickness allowance insurance premium:

• Date: the payment date of the daily sickness allowance insurance premium
• Description: the payment description
• Debit: account 5740 Daily sickness allowance insurance
• Credit: the Bank account
• Amount: enter the amount shown on the invoice. It includes both the employer's share and the employee's share.

Expense reimbursement included in the net salary paid

When the net salary paid includes an expense reimbursement, it is advisable to separate the net salary from the expense reimbursement in the accounting records. This ensures that the salary account is not affected by amounts that do not actually represent salary.

Example:

• Net salary: CHF 4'000
• Expense reimbursement: CHF 200
• Total payment through the bank: CHF 4'200

In the accounting entry, the two amounts must be recorded separately. Therefore, the transaction should be entered using three rows:

In the Transactions table:

• First row – total payment through the bank
  • Date: the transaction date
  • Description: monthly salary payment
  • Debit: leave blank
  • Credit: the Bank account
  • Amount: the total amount paid CHF 4'200
     
• Second row – monthly net salary
  • Date: the transaction date 
  • Description: monthly salary payment
  • Debit: account 5000 Salaries
  • Credit: leave blank
  • Amount: the net salary paid CHF 4'000
     
• Third row – expense reimbursement
  • Date: the transaction date
  • Description: expense reimbursement
  • Debit: the Expense reimbursement account (for example, travel expenses)
  • Credit: leave blank
  • Amount: the expense reimbursement amount CHF 200

Payment of withholding tax

When paying withholding tax at the end of the quarter:

• Date: the withholding tax payment date
• Description: the payment description
• Debit: account 5790 Withholding tax
• Credit: the Bank account
• Amount: enter the amount calculated by the payroll software according to the requirements of the Withholding Tax Office.

Checks and verification

During the year, social security contributions and some insurance premiums are generally paid as advance payments. The actual amount due is determined only when the final statements or the year-end adjustments are issued.

For this reason, when using net salary accounting, it is essential to carry out regular checks and a thorough verification at the end of the financial year.

For more information, see the Net salary reconciliation.

Gross salary management consists of recording in the accounting the entire salary, including all employee salary deductions and social security contributions.

Unlike net management, this method provides a complete view of salary costs and liabilities toward social institutions.

What is recorded

With gross management, the following are recorded monthly:

• the gross salary
• employee deductions (AVS, LPP, withholding tax, etc.)
• employer’s social security contributions
• liabilities toward social security and insurance institutions (if the accounting is kept on an accrual basis)
• the net salary paid

In gross management, the accounting clearly distinguishes between:

• the employee’s share (deducted from the salary),
• the employer’s share.

The accounting principle

Gross management follows the accrual principle:
Salary costs and the related liabilities are recorded in the period in which they arise, regardless of the time of payment.

Difference compared to net management

Unlike net management, which records only actual payments, gross management records all salary components and the related liabilities.

When to use gross management

Gross management is appropriate when:

• A complete and detailed accounting is required
• You want to monitor personnel costs precisely
• Liabilities toward social security and tax authorities must be recorded
• The accounting is used for analysis and reporting

Accounts normally used

Gross management requires a larger number of accounts compared to net management.

Expense accounts

• 5000 Gross salaries
• 5700 Employer social security contributions
• 5710 Family allowance fund contributions
• 5720 Occupational pension contributions (LPP)
• 5730 Accident insurance premiums (LAINF)
• 5740 Daily sickness allowance insurance

Liability accounts

• 2270 Liabilities to social security institutions (AVS/AI/IPG/AD)
• 2272 Pension fund liabilities (LPP)
• 2273 Accident insurance liabilities
• 2274 Collective health insurance liabilities
• 2209 Withholding tax liabilities
• 2371 Liabilities to employees

Payment accounts

• 1020 Bank
• other Cash accounts

Employer’s share of social security and insurance contributions

In gross salary management, the accounts relating to social security contributions and insurance costs make it possible to clearly identify the portion effectively borne by the employer.

In the dedicated account cards (for example AVS, LPP, accident insurance, etc.), the following are recorded:

• in Debit, the total amounts due to the institutions (employer + employee),
• in Credit, the employee’s share deducted from the salary.

The difference between these amounts represents the employer’s share, i.e. the portion borne by the company as its own expense.

This approach makes it possible to:

• clearly distinguish between company costs and amounts withheld from employees,
• have a transparent view of obligations toward social institutions,
• accurately monitor the impact of personnel costs on the company’s results.

Accounting entry of gross salaries

At the end of the payroll period, the gross salary and the related deductions from employees’ pay are recorded. With gross recording, both the salary cost and the deductions and liabilities toward third parties are recognized.

Example:

• 5000 Gross salaries → Debit
• 1181 Family allowances → Debit
• 5700 AVS/AI/IPG/AD Contributions → Credit (employee’s share, deducted from salary)
• 5720 LPP Contributions → Credit (employee’s share, deducted from salary)
• 5730 LAINF Contributions → Credit (employee’s share, deducted from salary)
• 5740 Sickness contributions → Credit (employee’s share, deducted from salary)
• 2209 Withholding tax liabilities → Credit (fully borne by the employee). The withholding tax deducted from the employee’s salary must be fully paid to the Withholding Tax Office and represents a liability for the company.
• 2371 Liabilities to employees → Credit

Payment of the net salary

If salaries have been recorded when accrued and the payment takes place later, the payment entry is recorded as follows:

• 2371 Liabilities to employees → Debit
• 1020 Bank → Credit

Recording AVS advances and payment

Monthly or at another regular interval, the employer receives from the cantonal AVS office the advance invoices for AVS contributions to be paid. These amounts also include any allowances advanced in the salary of the employee entitled to them.
The advance invoice includes both the employer’s share and the employee’s share.

Recording the invoice:

On 03.01.2026 we record the invoice for AVS advances:

• 5700 Employer social security contributions → Debit
• 2270 Liabilities to social security institutions (AVS/AI/IPG/AD) → Credit

Payment:

On 30.01.2026 we record the payment of the AVS advances:
The contributions are paid according to the invoice, the amount of which is net of any family allowances or other benefits.

• 2270 Liabilities to social security institutions (AVS/AI/IPG/AD) → Debit
• 1020 Bank → Credit

The AVS account plays a central control role:

• in Credit, employees’ salary deductions are recorded
• in Debit, payments to the institution.

The account balance therefore represents the employer’s share.

In the AVS contributions account card (see image), advances paid appear in Debit, while contributions deducted from employees’ salaries appear in Credit. The account balance therefore represents the employer’s share. This presentation makes it easy to verify the correctness of contributions and payments made.

LPP contribution premium and payment

When the annual LPP premium is received, the total cost borne by the employer and the liability toward the LPP insurer are recorded.

When we receive the LPP premium invoice:

• 5720 LPP Contributions → Debit
• 2272 LPP Liabilities → Credit

When we pay the LPP premium invoice:

• 2272 LPP Liabilities → Debit
• 1020 Bank → Credit

Annual accident insurance premium (LAINF) and payment

When the annual LAINF premium is received, the total cost borne by the employer and the liability toward the LAINF insurance are recorded.

When we receive the LAINF premium invoice:

• 5730 Accident insurance premiums (LAINF) → Debit
• 2273 Accident insurance liabilities → Credit

When we pay the LAINF premium invoice:

• 2273 Accident insurance liabilities → Debit
• 1020 Bank → Credit

Annual collective health insurance premium (IGM) and payment

When the annual collective health insurance premium is received, the total cost (including both the employer’s and the employee’s share) and the liability toward the health insurance are recorded.

When we receive the health insurance premium invoice:

• 5740 Daily sickness allowance insurance → Debit
• 2274 Health insurance liabilities → Credit

When we pay the health insurance premium invoice:

• 2274 Health insurance liabilities → Debit
• 1020 Bank → Credit

Payment of withholding tax

The withholding tax, deducted from the monthly salaries of employees subject to withholding tax, must be declared and paid by the employer within the prescribed deadlines. It is borne solely by the employee.

• 2209 Withholding tax liabilities → Debit
• 1020 Bank → Credit
   

Control and verification

It is important to regularly verify:

• the consistency between accounting and payroll calculations
• the balances of liability accounts toward social institutions
• the payments made

During the year, social contributions are often paid as advances.
Following the final statements from the social institutions, any adjustments are recorded to align costs and liabilities with the amounts actually due.

Advantages of gross management

• Complete view of salary costs
• Greater accounting transparency
• Detailed control of deductions and contributions
• Proper representation of liabilities
   

Limitations of gross management

• Greater complexity
• More accounting transactions
• Requires more accounts and careful management

When salary accounting is managed on a net basis, the annual OASI declaration cannot be verified by directly comparing the Salaries account with the final statement issued by the OASI Compensation Office. This is because the Salaries account contains the recorded net amounts, whereas the OASI statement is based on the gross payroll calculated by the payroll management software.

To verify the accuracy of the annual OASI declaration and the other year-end statements, it is therefore necessary to reconstruct the gross payroll and carry out a series of reconciliation checks.

The reconciliation process makes it possible to verify the consistency between:

• the accounting records
• the payroll statements generated by the payroll management software
• the annual OASI declaration
• the final statements issued by the social security institutions.

Reconciliation objectives

The year-end reconciliation has two main objectives:

• to reconstruct the gross payroll and compare it with the gross payroll declared to the OASI Compensation Office;
• to reconcile the OASI contributions by comparing account 5700 OASI Contributions with the final statement issued by the OASI Compensation Office.

Required documents

The following documents are normally required to perform the reconciliation:

• the accounting file
• the payroll statements
• the annual OASI declaration
• the final statement issued by the OASI Compensation Office
• the occupational pension (LPP/BVG) statements
• the insurance statements (OAI, daily sickness allowance insurance, etc.).

Verification of net salaries

The first check is to verify that the amounts paid to employees match those shown in the payroll statements generated by the payroll management software.

The total net salaries recorded in the accounting records must match the net salaries shown in the payroll statements.

It is also necessary to verify that there are no missing or duplicate transactions and that all entries have been recorded in the correct accounting period.

Any differences must be analyzed and corrected before proceeding with the reconciliation of the gross payroll.

Reconstruction of the gross payroll

To compare the accounting records with the OASI statement, the gross payroll must first be reconstructed.

The reconstruction must be carried out using the data from the payroll management software, which provides the details of the deductions applied to each employee.

Start from the net salaries recorded in the accounting records and add only the deductions withheld from employees, such as:

• OASI, DI, IC, and ALV
• occupational pension (LPP/BVG) contributions
• withholding tax
• other salary deductions.

The following must instead be excluded:

• family allowances;
• expense reimbursements;
• other allowances that are not subject to OASI contributions.

Verification of OASI contributions

During the year, OASI contributions are normally paid as advance payments. The actual amount due is determined only by the final statement.

For this reason, the balance of account 5700 OASI Contributions must be compared with the final statement issued by the OASI Compensation Office.

The account balance must include the advance payments made during the year as well as any year-end adjustments. The total must match the contributions shown on the final statement issued by the OASI Compensation Office.

Verification of other social security contributions

The same principle can also be applied to other social security and insurance contributions by comparing the balances of the related accounts with the annual statements issued by the relevant institutions.

In particular, it is advisable to verify:

• occupational pension (LPP/BVG) contributions;
• occupational accident insurance (OAI) premiums;
• daily sickness allowance insurance premiums;
• other recorded social security contributions or insurance premiums.

Any differences relating to these institutions should also be analyzed and reconciled before the financial year is closed.

Year-end checks

At the end of the financial year, the reconciliation should confirm that:

• the gross payroll matches the gross payroll declared to the OASI Compensation Office;
• the recorded contributions match the final statements issued by the institutions;
• all advance payments and any year-end adjustments have been recorded;
• there are no differences between the accounting records, the payroll statements, and the declarations submitted to the social security institutions.

A complete reconciliation makes it possible to identify any differences before submitting the declarations to the social security institutions and ensures consistency between the accounting records, the payroll management software, and the annual statements.

FAQ

Why doesn't the gross payroll in the OASI declaration match the Salaries account?

• Because under net salary accounting, the Salaries account records only the net amounts paid to employees, whereas the OASI declaration is based on the gross payroll.

Why is the balance of the OASI account different from the advance payments made?

• Because advance payments are normally made during the year. The actual amount due is determined only by the final statement.

How is the gross salary determined?

• The gross salary is reconstructed using the payroll statements generated by the payroll management software.

How do you reconstruct the gross salary starting from the net salary?

• Start with the net salary recorded in the accounting records and add the deductions withheld from the employee (OASI/DI/IC/ALV, occupational pension (LPP/BVG) contributions, withholding tax, and other deductions). Family allowances, expense reimbursements, and other allowances that are not subject to OASI contributions must instead be excluded.