Use company car privately

The company car is a necessary work tool, sometimes a prestige item, and a symbol of professional success. In fact, the company car is now an additional benefit that attracts qualified professionals to the company in the form of a bonus. Sometimes, there is confusion between the AHV (Swiss Old-Age and Survivors’ Insurance) obligation and the taxation of the company car.

A company car is a vehicle provided by the company to its employees for business purposes. Before an employee drives a company car from a private company, the legal situation must be clarified. The private use of company cars is not always allowed. In labor law practice, there is a wide range of possibilities. There may also be situations where an employee is allowed to use a company car for private purposes only to a limited extent.

Therefore, it is advisable to specify in the assignment contract at the time of vehicle handover under what circumstances a company car may be used. This is the legal basis for the use of a company car by the employee, regardless of whether the car is also used for private purposes.

The private portion of the company car must be listed as AHV-compulsory taxable income in the payroll.

Since AHV is the main insurance for other social insurances, the private portion must subsequently be considered as a mandatory income component for other social insurances. This particularly applies to AHV/IV/EO (Swiss Disability Insurance) and any sickness daily allowance insurance. The regulations of the occupational pension scheme are decisive; here, the procedure must be clarified with the pension fund or insurance company.