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Old 10.07.2020, 17:08
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Fire myself or Unpaid Leave for 2 to 3 months

Hi,

I'm the owner of a 1 man GmbH. I have an employment contract with the company I own.

I was eligible for a while for Kurzarbeit but was informed today that even though I was originally told I was eligible until 26/09/2020 and have the documentation to prove that unfortunately the legislation that allowed "owners" the special dispensation to claim Jurzarbeit had been suspended.

So the claim I made for June was denied.

So, as it is going to be some time [ 2 to 3 months .. ] before the potential customers of my business start to ask for my company's services again I need to stop paying myself a salary [ and all the accompanying employer costs: AHV, ALV, BVG, UVG etc ... ]

If I was in the UK I would simply suspend my payroll until I could restart it again [ and live off my savings ].

As this is my the start of my 2nd year here I am still learning what is and isn't allowed.

I have thought of two options:

1. Modify my contract to allow me to take unpaid leave. This would relieve my company of the need to pay me but it is unclear if it would also mean my company could stop paying BVG, UVG, AHV etc ... - would it ?? [ hope so )

2. Fire myself due to a lack of work. And then Re-hire myself when business picks up. Presumably this would definitely mean my company doesn't have to pay me anything and would also not have to pay anything to AHV, BVG, UVG etc. Would it ?

I have a B-Permit, I have sufficient funds to pay my rent/health insurance and living costs for some time.

Is there anything to stop me doing Option 1 or 2 ? Which would be better in terms of reducing my company burden to "pay" things?

Thanks in advance

Kt
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Old 10.07.2020, 19:00
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Re: Fire myself or Unpaid Leave for 2 to 3 months

Spontaneously it crosses my mind that you should never stop paying AHV. Having "wholes" in payments of that has big effects (bigger than what you're saving). Even when not working, people pay AHV (a minimum, which considers your wealth as well though). If you don't pay yourself for a while, contact SVA Zurich or the equivalent in your canton about the AHV payments.
The other thing is. why would a half way intelligent human being cancel UVG?! If you can't do it via the company as not paying yourself any money, you must immediately inform your health-insurance to add accidents (costs peanuts).
Accidents is about the only thing you can't plan. Apart from Corona lock-downs of course.

If you pay yourself a salary, the company makes a minus. Good for the taxes.

Do you speak German? This should be interesting for you.
You can not pay yourself if you want to, yet you still must pay AHV/IV/EO during this time. The amount would again be a question for SVA or the equivalent in your canton.

I kept adding to this post - don't expect it to be well structured.
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Old 10.07.2020, 20:41
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Re: Fire myself or Unpaid Leave for 2 to 3 months

It is not uncommon for small start-ups to change wages (or draws) to owners during the year. This is what I might suggest:

1. Simply don't pay yourself for two or three months.
2. Continue to pay the quarterly SVA invoice for AHV, ALV, etc.
3. Early in 2021, file the Lohnausweis documentation with the SVA showing the actual wages paid to yourself.
4. SVA will then reimburse or credit your company for the AHV, ALV, etc. difference for 2020.
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Old 10.07.2020, 20:56
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Re: Fire myself or Unpaid Leave for 2 to 3 months

Thanks to both of you for the information. I will enquire further. Right now my concern is the inability of my company to continue paying “anything” as it has had no paying customers since March 12th and given the current situation that’s not looking like it will change until September or October at the earliest.
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Old 10.07.2020, 21:04
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Re: Fire myself or Unpaid Leave for 2 to 3 months

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Thanks to both of you for the information. I will enquire further. Right now my concern is the inability of my company to continue paying “anything” as it has had no paying customers since March 12th and given the current situation that’s not looking like it will change until September or October at the earliest.
AfaIk companies pay social costs only once a year. At the end of it or in January, I suppose. So by then you might be able to pay (those reduced) costs.
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Old 10.07.2020, 21:13
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Re: Fire myself or Unpaid Leave for 2 to 3 months

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Thanks to both of you for the information. I will enquire further. Right now my concern is the inability of my company to continue paying “anything” as it has had no paying customers since March 12th and given the current situation that’s not looking like it will change until September or October at the earliest.

The Gesellschafter (you) can lend money to the company so that the company can pay its bills.
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Old 10.07.2020, 21:59
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Re: Fire myself or Unpaid Leave for 2 to 3 months

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AfaIk companies pay social costs only once a year. At the end of it or in January, I suppose. So by then you might be able to pay (those reduced) costs.
I wish that were the case.

My company receives invoices for AHV/ALV/... from SVA Zurich quarterly.

Similarly, it continually receives (incorrect) invoices for BVG and UVG on a quarterly basis.

BVG & UVG was overcharged in 2019 by several thousand in total. I'm still waiting for some sort of refund [ if thats even possible ]. The declaration forms for last year didn't arrive on time and I had to ask for them and that took 2 months .. so both BVG & UVG for this year were again significantly wrong and invoiced me double the amounts they should have.

Likewise for Quellensteuer - it sends quarterly invoices but they keep being wrong. Wrong as in: 1) They did not relate to my actually monthly salary amounts and 2) Some other company kept booking their employees to my company's ID. I'm still waiting for that mess to be resolved, 3) I've had 3 or 4 invoices for 2019-Q2, 2 for 2019-Q3 and 2 for 2019-Q4 [ none of them were right ] but I was told by my former Treuhand that I had to pay them regardless...

I need to get my company in to a position where it pays next to nothing .. until it starts earning money again. As a new company, its reserves are low, and it cannot afford to "financially support" (i.e. keep paying) the over charging by different institutions (i.e. SVA Zurich, the BVG & UVG Company which I won't name, and the Quellensteuer until they "get it right".

My company's bank account is not a bottomless pit and cannot wait 9 months for corrections.

I'll speak to my Treuhand on monday and see what they have to say [ at a minimum of 180 p/h... ]
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Old 10.07.2020, 22:03
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Re: Fire myself or Unpaid Leave for 2 to 3 months

Why don't you just reduce your salary now and increase once it gets better?
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Old 10.07.2020, 22:05
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The Gesellschafter (you) can lend money to the company so that the company can pay its bills.
Thank you. I'd prefer to avoid getting in to a "debt" situation if I can avoid it.

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Why don't you just reduce your salary now and increase once it gets better?
I have, I halved it but now I need it to be 0 but more importantly I need to make things such that my company has almost nothing to pay out. [ i.e. as little as possible ].

Last edited by 3Wishes; 11.07.2020 at 15:12. Reason: merging consecutive replies
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Old 10.07.2020, 22:13
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Re: Fire myself or Unpaid Leave for 2 to 3 months

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Hi,

I'm the owner of a 1 man GmbH. I have an employment contract with the company I own.
Why?

I've owned my GmbH as sole worker for over a decade. I have no formal contract. I vary my salary as I see fit. In the past couple of years, I've been aware of harder times ahead and so have retained money in the company, so I can pay the salary I've chosen even if I'm not working. One year, I cut my salary in half April to December.

However.

Although I've declared a salary to the pension fund and AHV and other insurances, at the end of the year I fill in the actual amount, and it's all taken care of then. If you've reduced your salary, you'll get a refund.

Further, if you choose not to pay the salary, you can just make an accounting entry that the company owes you money. Simplest though is to stop paying a salary. If your company can't afford to pay other (s bills, then really you need to make a loan to it.
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Old 10.07.2020, 22:33
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Re: Fire myself or Unpaid Leave for 2 to 3 months

Why dont you give yourself a part-time contract ?

I am a normal employee (of a Swiss government sponsored non-profit) and have a 60% contract. A normal work week however is 80%, so I have many weeks free. Because of a large project I worked much more than my contract for the last half year, but now I am in a period where I work much less than 60%. I still get my normal salary though, and normal contributions are paid. I guess, with lots of overtime accumulated, also a one time payment would be possible.

A parttime contract might be the way to skip over downtime in your case ? And you can buy off lots of overtime by giving yourself one-time payments, in case you are busier than expected ?
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Old 11.07.2020, 00:12
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Why?
Because I was told by my old Treuhand that I had to have a contract in order to satisfy the requirements to get my B Resident's permit. [ They might have been wrong, but thats why ]. Note: I also pay myself varying salaries from month to month depending on available funds.

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If you've reduced your salary, you'll get a refund.
Allegedly, at some point, yes. SVA Zurich were good, they refunded within 5 months of the year end. BVG have not .. yet and neither have UVG .. yet. Its month 7 after 2019 year end and still no refund.

Likewise I still haven't gotten the withholding tax refunds either. If I add it all up I'm probably owed many thousands.

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Further, if you choose not to pay the salary, you can just make an accounting entry that the company owes you money. Simplest though is to stop paying a salary. If your company can't afford to pay other (s bills, then really you need to make a loan to it.
That doesn't result in the situation I need here .. i.e. the company stops having to pay large amounts out to SVA, BVG, UVG every quarter because the company cannot afford to pay those things due to a lack of revenue due to the coronavirus situation. The last revenues were on March 12th ( excluding the 2.5 months of Kurzarbeit )

I'm not concerned about other typical bills, they are minimal and can be made almost nothing.

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Why dont you give yourself a part-time contract ?

I am a normal employee (of a Swiss government sponsored non-profit) and have a 60% contract. A normal work week however is 80%, so I have many weeks free. Because of a large project I worked much more than my contract for the last half year, but now I am in a period where I work much less than 60%. I still get my normal salary though, and normal contributions are paid. I guess, with lots of overtime accumulated, also a one time payment would be possible.

A parttime contract might be the way to skip over downtime in your case ? And you can buy off lots of overtime by giving yourself one-time payments, in case you are busier than expected ?
The contract isn't the problem. Right now, I can't pay any salary and won't be able to until customers decide to require my services. It's too complicated to go in to the why's. I'm told by the upstream companies who my company has a supply agreement with that they are not expecting customers to require the specific services provided by consultants like myself until after the summer, probably October at the earliest but that is not guaranteed.

Last edited by 3Wishes; 11.07.2020 at 15:13. Reason: merging consecutive replies
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Old 11.07.2020, 01:25
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Re: Fire myself or Unpaid Leave for 2 to 3 months

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That doesn't result in the situation I need here .. i.e. the company stops having to pay large amounts out to SVA, BVG, UVG every quarter because the company cannot afford to pay those things due to a lack of revenue due to the coronavirus situation. The last revenues were on March 12th ( excluding the 2.5 months of Kurzarbeit )

I'm not concerned about other typical bills, they are minimal and can be made almost nothing.
But can you afford to pay the social security charges yourself. Because you must pay and if you don't have an income, the calculation is based on your assets. And I can tell you, you'll be amazed how valuable a company with not assets can be. Because they value it on a return basis, so if your company made 5k last year, then it is worth may be 100k and so on.

This happened to father-in-law (RIP) one year when he did not understand the consequences of not having an income.
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Old 11.07.2020, 07:34
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Re: Fire myself or Unpaid Leave for 2 to 3 months

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Spontaneously it crosses my mind that you should never stop paying AHV. Having "wholes" in payments of that has big effects...
From the point of view of the individual it's viewed on an annual basis. For anyone on more than a fairly minimal annual salary there will be no problem with a relatively short zero income phase.
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Old 11.07.2020, 08:04
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Re: Fire myself or Unpaid Leave for 2 to 3 months

You can just stop paying your salary. Mutually agree with your employer to accept a new zero hours contract!

You may need to agree with the SVA a new lower salary level, as they like their money once a quarter. Refunds at the end of the year. If you're still waiting for AVG/BVG refund, then chase them up. You don't say which canton you're in (your location is London!), but in BL I get the credit (or bill in good years!) within about a month.
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Old 11.07.2020, 10:23
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Re: Fire myself or Unpaid Leave for 2 to 3 months

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From the point of view of the individual it's viewed on an annual basis. For anyone on more than a fairly minimal annual salary there will be no problem with a relatively short zero income phase.
Yep, correct. Sometimes having worked one month covers the AHV minimum for the whole year. I forgot about that.
Still, the AHV is worth keeping an eye on, regarding "no wholes". It's not that the pension they pay out is so big that it doesn't matter.
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Old 11.07.2020, 18:48
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Re: Fire myself or Unpaid Leave for 2 to 3 months

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But can you afford to pay the social security charges yourself.
No but i suspect, judging by what some of the other commenters have intimated that a sufficient amount will have been paid already.

I just need to buy some time for myself and the company. The company cant pay what it doesn't have and I have just enough personally to get buy for 3 or 4 months.

I'll speak to my accountant this week and find out what really is/isn't possible.

Thanks.
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Old 11.07.2020, 18:54
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Re: Fire myself or Unpaid Leave for 2 to 3 months

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You can just stop paying your salary. Mutually agree with your employer to accept a new zero hours contract!

You may need to agree with the SVA a new lower salary level, as they like their money once a quarter. Refunds at the end of the year. If you're still waiting for AVG/BVG refund, then chase them up. You don't say which canton you're in (your location is London!), but in BL I get the credit (or bill in good years!) within about a month.
I'm in Zurich. I'm the owner and only employee so I have no issue with agreeing with myself Unfortunately, SVA Zurich took 5 months to refund and I have chased the BVG/UVG company twice in the last 2 months and not only have they not refunded the overpayment for last year yet they also messed up the Q2 invoice for this year [ it arrived yesterday ] - it was supposed to allow for the overpayment in Q1 this year due to the reduced salary estimation for this year.

Anyway thank you. I'll be speaking to my accountant and seeing what they say.

Similar, but worse, situation is ongoing with Quellensteuer.
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Old 11.07.2020, 19:27
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Re: Fire myself or Unpaid Leave for 2 to 3 months

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.....Anyway thank you. I'll be speaking to my accountant and seeing what they say.....
Check how good your accountant is as well. "The bill is wrong but you have to pay it anyway" does not sound right to me.
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Old 12.07.2020, 11:27
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Re: Fire myself or Unpaid Leave for 2 to 3 months

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"The bill is wrong but you have to pay it anyway" does not sound right to me.

Sadly it does to me. You have to pay the bill and they sort it out in arrears. Really not helpful when you don't have the money to pay the incorrect figure, but that's how it generally works.
To the OP, if you report a significantly different salary to the SVA they will usually adjust future payments immediately, subject to the minimum of around Fr 150/quarter. If you've already paid Fr 600 this year, then you could set your annual salary to 0 and you should be clear, and then just pay any difference in the annual reconciliation assuming business picks up in October
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