Article written by Julie Pignier

Representation fees

What are they?

These are costs actually incurred to maintain and develop the network of business relationships of the company as well as to carry out customer follow-up, borne by the company. Representation fees allow an employee to develop and retain the business network and customers.

Representation fees should not be mistaken with professional fees.


Who can benefit?

All employees having a duty of representation of the company incumbent on them personally, can benefit from flat-rate representation fees.

As the job is not considered satisfactory and as the only title does not justify an effective duty of representation, the Administration admits that a strong duty of representation can be recognized as soon as the total gross salary is reached or exceeds CHF 150,000 per year for an activity rate of 100%.

Below this threshold, the tax administration considers that the employee cannot benefit from representation fees. If such fees were to be paid to employees, they would therefore be treated as taxable income for them, regardless of any other consideration.

For wages exceeding CHF 150,000, the employer must be able to demonstrate that the employees concerned are effectively bound by a strong duty of representation. Therefore, having a managerial position does not necessarily mean a strong duty of representation.

Thus, employees occupying functions without direct relation with customers or suppliers cannot claim to exercise a duty of representation. In case of doubt, the tax authority reserves the right to ask the employer to justify the strong duty of representation.


How much are the representation fees?

Below are the bearings:

  • 5%: for a total gross annual salary between CHF 150,000 and CHF 250,000;
  • 10% above CHF 250,000 of gross annual salary.

However, the maximum annual limit granted is CHF 100,000.


Example: an employee receives a gross annual salary of CHF 270,000

Calculation: 250,000 x 5% + 20,000 x 10% = 14,500

The amount of representation fees is therefore CHF 14,500 per year for this employee.


What is the determining salary?

Only the part of the total gross salary in connection with the exercise of the duty of representation in the context of gainful activity (salary, allowances, various allowances) should be taken into account.

Reimbursements of actual costs, severance pay or redundancy pay are excluded.


What is the process?

For representation fees to apply, the employer must submit a ruling request to be validated by the tax administration as well as by the AVS compensation fund, providing the list of employees concerned.

The request must be sent to the tax authorities sufficiently early in the current fiscal year, so that an agreement is received before the establishment of the salary certificate. Representation fees accepted by the authorities are not subject to social charges and are not taxable.

In addition, the tax administration reserves the right to ask the employer to demonstrate the strong duty of representation of the employees concerned, even if the threshold of CHF 150,000 is exceeded.

Lump-sum allowances for representation fees paid by an employer who has not had the list of employees concerned approved will be considered as additional salaries, deductible at the employer’s level as charges, and taxable at the employees’ level as income from the dependent gainful activity.




Employees who are absent for a long period of time (RHT, long-term illness, military service, accident) cannot benefit from a lump-sum reimbursement for the period in question as they are not able to exercise their duty to representation.


For companies whose registered office is based outside the canton of Geneva, but which have employees in the canton of Geneva, the ruling for representation fees approved by the canton of the registered office will be recognized by the Geneva tax administration, provided that said ruling is sent to the Geneva tax administration. If this is not the case, then the representation fees allowances paid to employees working in the canton of Geneva will be considered as additional income and will therefore be taxed.

Each canton defines its practice in this area.


Main source: website of the Geneva cantonal administration

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