Germany–Switzerland · Employment Income Taxation
Employment Income and Workdays Between Germany and Switzerland
If you work in Germany and Switzerland, determining the tax treatment often requires more than identifying your residence and employer: your actual workdays may need to be allocated between countries. Outside the special frontier-worker rule in Article 15a of the tax treaty, the physical place of work is a key factor in allocating employment income. Working from home, business travel, bonuses and equity compensation can further affect the calculation.
Article 15 of the Tax Treaty
The physical place of work is central to the allocation of taxing rights
Under Article 15 of the Germany–Switzerland double taxation agreement, salaries, wages and similar remuneration are generally taxable only in the country of residence unless the employment is exercised in the other contracting state.
If the work is physically performed in the other state, that country generally also acquires a right to tax the related income, subject to the treaty’s exceptions. Cross-border employees may therefore need to allocate their remuneration by actual workdays.
However, Article 15a provides a special rule for frontier workers that can take precedence over the general allocation by workdays.
Three Levels of Review
Residence, frontier-worker status and work location must be assessed in the right order
Simply counting German and Swiss workdays is not sufficient in every case. First establish where the employee is resident for treaty purposes and whether the special frontier-worker rule applies.
If Article 15a does not apply, the general allocation by workdays under Article 15 usually becomes a central part of the analysis, subject to any other special rules.
- Determine tax treaty residence
- Check frontier-worker status under Article 15a
- Record actual workdays by country
- Apply the 183-day rule in its proper context
- Analyse variable remuneration separately
- Coordinate the German and Swiss tax returns
Special Rule in Article 15a
For frontier workers, a workday split may not determine the tax treatment
If an employee is resident in Germany, works in Switzerland and meets the frontier-worker conditions, their employment income is generally taxed in Germany as the country of residence.
Switzerland, as the country of work, may generally levy withholding tax of no more than 4.5% of gross remuneration, provided German residence is properly certified.
In this situation, regular employment income is not allocated between the two countries simply because some days are worked at home in Germany and others at the Swiss office.
Outside the Frontier-Worker Rule
Outside Article 15a, the actual place of work becomes decisive
Workday in Germany
Work physically performed in Germany generally constitutes a German workday. This applies in particular to work performed at the employee’s German home.
Workday in Switzerland
A day on which the employee physically performs their duties at the Swiss workplace generally constitutes a Swiss workday.
Third country
For business trips to other countries, the actual place of work must also be documented. The treaty treatment of those days may require a separate review.
Workday Allocation
Outside the frontier-worker rule, employment income is often allocated by actual workdays
For cross-border employment, the first step is generally to identify the period to which the remuneration relates. The actual workdays within that period are then allocated to the countries where the work was performed.
Annual leave, sick leave, weekends and other days on which no work is performed are generally excluded from both the numerator and denominator of a ratio based on actual workdays. This does not mean that pay for those periods is tax-free.
Before applying a time-based ratio, remuneration directly attributable to specific activities must be allocated separately. Other remuneration components may also require a more detailed analysis.
Example
220 workdays: 88 in Germany and 132 in Switzerland
Assume an employee does not fall within Article 15a and has a total of 220 actual workdays for the relevant annual remuneration.
They work 88 days from home in Germany and 132 days physically in Switzerland. As a starting point, this produces a workday allocation of 40% to Germany and 60% to Switzerland.
Whether the remuneration is ultimately allocated for tax purposes in exactly that proportion also depends on the treaty rules, the employer, the type of remuneration and any applicable special provisions.
| Country | Workdays | Share | Initial allocation |
|---|---|---|---|
| Germany | 88 | 40% | German workday share |
| Switzerland | 132 | 60% | Swiss workday share |
| Total | 220 | 100% | Total relevant workdays |
Working from Home
A day worked from home in Germany generally constitutes a German workday
If an employee physically works from their home in Germany, their employment is generally exercised in Germany on that day.
This classification does not depend on whether the employer is based in Switzerland, pays remuneration in Swiss francs or assigns the employee organisationally to a Swiss branch.
- Document the physical place of work
- Record home-working days separately
- Check frontier-worker status first
- Distinguish tax rules from social security rules
- Review payroll consequences separately
- Assess any permanent establishment risk for the employer where relevant
Residence in Germany
For German residents, the German employment income share already forms part of worldwide income
A person resident in Germany is generally subject to German income tax on their worldwide income. With a German residence, the question is therefore not simply whether Germany may tax days worked from home there.
For days worked in Switzerland, it is also necessary to determine Switzerland’s taxing rights and how Germany provides relief from double taxation under the treaty.
Workday allocation and the method of double taxation relief must therefore be considered together.
Business Travel
Business travel days must be assessed by the actual place of work
If an employee travels to clients or group companies for their Swiss employer, their place of work may differ from their usual Swiss workplace.
A client meeting in Munich generally constitutes work in Germany. A working day in Zurich is a Swiss workday. A business trip to France may involve a French workday.
For frequent business travellers, a simple division into “Germany or Switzerland” is therefore insufficient. Each country should be recorded separately.
Client meeting in Germany
Work physically performed at a German client’s premises generally constitutes work in Germany.
Swiss office
Work at the employer’s Swiss premises generally constitutes work in Switzerland.
Travel to a third country
Work in a third country may require a review of an additional tax treaty and its employment income provisions.
Travel Days
A day spent travelling must be assessed by the actual work performed
Crossing a border does not automatically allocate an entire calendar day to one country. The work actually performed on that day remains relevant.
If substantive work is performed during a journey, document where it takes place. The treatment of transit or travel-only days depends on the circumstances; where work is performed in more than one country on the same day, a proportionate allocation may be needed.
For a reliable workday allocation, a calendar showing work locations is therefore usually more informative than a list of border crossings alone.
183-Day Rule
Fewer than 183 days do not automatically make employment income tax-free
The frequently cited 183-day rule is not a general tax-free allowance for cross-border employees.
It forms part of the treaty’s general employment income rule and restricts the country of work’s taxing rights only if all the specified conditions are met. The relevant presence-day count must be distinguished from the workday ratio used to allocate remuneration.
The conditions concern not only the length of the stay but also the employer and who bears the remuneration costs. For an employee with a Swiss employer, the number 183 alone therefore does not determine whether Germany or Switzerland may tax the income.
Variable Remuneration
Bonuses and equity compensation are not necessarily allocated by workdays in the payment year
For variable remuneration, first identify the period over which the payment was earned.
The workdays in that earning period can then be allocated to the countries where the duties were performed.
- Identify the type of remuneration
- Establish the relevant earning period
- Record workdays within that period
- Separate German, Swiss and third-country workdays
- Review the treaty allocation for each period
- Reconcile withholding tax already deducted
Bonuses
The performance period matters more than the payment date for allocating a bonus
A bonus paid in March 2027 may, for example, relate to work performed during the 2026 calendar year.
In that case, the international allocation is generally not determined solely by where the employee works in March 2027. Instead, establish in which countries the remunerated duties were performed during the relevant earning period.
For bonus programmes covering several years, the analysis may span multiple tax years. The year in which the income becomes taxable is a separate question from its allocation between countries.
RSUs & Stock Options
Equity compensation may require several years of workday records
For restricted stock units, employee stock options and similar instruments, the relevant service period may run from grant to vesting or over another period determined by the award terms and applicable tax rules.
If the employee worked in both Germany and Switzerland during that period, the remuneration may need to be allocated between the countries.
A subsequent change of residence or employer can make the analysis more complex. Workday records should therefore be maintained throughout the relevant period rather than reconstructed only at vesting.
German Domestic Tax Law
German workdays may remain taxable in Germany even with a Swiss residence
An employee who no longer has a residence or habitual abode in Germany may nevertheless be subject to limited German tax liability on certain German-source income.
Section 49(1), no. 4 of the German Income Tax Act (EStG) covers specified categories of employment income, including income from duties performed or utilised in Germany. A German domestic charging provision must apply, and the treaty must then be checked to determine whether it limits Germany’s taxing rights.
Someone who lives in Switzerland and physically works in Germany on individual days should therefore include those days in the German tax review despite their Swiss residence.
Management & Special Roles
Managing directors and certain other employees may be subject to additional treaty rules
The Germany–Switzerland tax treaty contains special provisions for certain corporate functions. Article 15(4) may be relevant in particular to managing directors, directors, management board members and authorised signatories holding a commercial power of attorney (Prokura).
A purely mechanical allocation by German and Swiss workdays can therefore produce an incorrect result in these cases.
Before calculating the workday split, check whether a special treaty article or provision applies to the employee’s specific role.
Evidence
Document workdays individually and by country of work
Establish residence and frontier-worker status
Before allocating remuneration, determine which treaty rules apply to the employee.
Determine total workdays
Identify the relevant actual workdays in each remuneration or earning period.
Record the location for each workday
Document Germany, Switzerland and third countries separately.
Distinguish home working from business travel
Home-working days, client visits and international business travel should not be grouped into one general category.
Separate remuneration components
Base salary, bonuses, RSUs, stock options and other components may relate to different earning periods.
Reconcile Swiss withholding tax
Tax already withheld in Switzerland must be reconciled with the final treaty allocation.
Coordinate the German tax return and payroll
The income tax allocation, any German wage withholding obligations and Swiss payroll treatment should be coordinated consistently.
Supporting Documents
Documents that help substantiate a workday allocation
Work calendar
A daily calendar showing the work location is the main basis for a reliable allocation.
Travel documents
Travel expense claims, tickets and hotel invoices can substantiate work locations and business travel.
Payroll records
Swiss and, where applicable, German payroll documents should be reconciled with the tax allocation.
Bonus documents
The bonus plan and performance targets help establish the relevant earning period.
Equity award documents
Grant, vesting and exercise details are generally needed for equity compensation.
Employment contract
The role, employer, employment period and contractual work location provide important starting information.
Common Mistakes
Frequent errors when allocating employment income
Allocating income by residence instead of work location
Outside a special rule, the actual place of work is generally central to the allocation under Article 15.
Ignoring frontier-worker status
Article 15a can take precedence over the general workday allocation and must therefore be checked first.
Counting annual leave as workdays
Annual leave and other days on which no work is performed are generally not actual workdays.
Allocating a bonus by its payment year
The relevant period may instead be the period over which the bonus was earned.
Allocating home working to the Swiss employer’s country
A day physically worked from home in Germany generally constitutes a German workday.
Confusing tax and social security
The tax allocation by workdays is not the same as the social security rules for work in multiple countries or cross-border telework.
Further Reading
Related topics
Frequently Asked Questions
Employment income and workdays between Germany and Switzerland
Where is employment income taxed when working in Germany and Switzerland?
Is a day worked from home in Germany a German workday?
Must employment income always be allocated by workdays?
Does annual leave count as German or Swiss workdays?
What applies to business trips to Germany?
What does the 183-day rule mean?
How is an annual bonus allocated between Germany and Switzerland?
How are RSUs or employee stock options allocated?
What if I live in Switzerland and work in Germany on individual days?
Does the tax allocation by workdays also determine social security coverage?
Which documents should I retain for a workday allocation?
Germany–Switzerland Tax Advice
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