04 February 2026

Increase in travel expense deductions as of January 1, 2026: Impact on expense regulations and expense payments

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As of 1 January 2026, the tax-deductible mileage rate increases to CHF 0.75 per km. We outline the impact on expense regulations and employer obligations.

  • Dr. Samuel Bussmann

    Tax & Legal Partner

  • Hannah Dobringer

    Junior Tax Consultant

  • Christina Stocker

    Tax Counsel

  • Michèle Stutz

    Legal Partner

Introduction

The Professional Expenses Ordinance increased the tax deduction for natural persons for the use of private cars from CHF 0.70 to CHF 0.75 per kilometer traveled as of January 1, 2026.

Below, we briefly outline whether this change has an impact on existing expense regulations (compensation for the use of private cars for business trips) and whether employers are obliged to adopt this mileage rate.

Background

The increase in the travel expense deduction in the Occupational Expenses Ordinance as of January 1, 2026 means that employees can claim a higher tax deduction for travel expenses when using their private car for commuting to work. However, this only applies if they meet the relevant requirements. In addition, the travel expense deduction is severely limited (e.g., the maximum amount for direct federal tax is CHF 3,300, with cantonal maximum amounts varying). 

Impact on expense regulations

If an employee uses the private vehicle for business trips (not including commuting to work) and receives mileage allowance from the employer, a maximum reimbursement of CHF 0.70 per kilometer has generally been accepted by the tax authorities and recognized as tax-free expense reimbursement.

Many employers have expense regulations approved by the tax authorities that comprehensively and conclusively regulate the tax treatment of expense payments (actual or flat-rate expenses). Such regulations can be submitted to the tax administration of the canton in which the company is based for approval. Their content is based on the model templates provided by the Swiss Tax Conference (SSK). Until December 31, 2025, the model templates provided for a mileage allowance of CHF 0.70. Due to the change that came into effect on January 1, 2026, the SSK has amended its model expense regulations and increased the mileage allowance for the use of private vehicles for business purposes from CHF 0.70 to CHF 0.75.

If there is an expense policy approved by the tax authorities and the employer wishes to deviate from it, they must submit the changes to the tax authorities for reapproval. The question now arises as to whether an employer with an approved expense policy that still contains the old mileage rate of CHF 0.70 may now also reimburse a maximum of CHF 0.75, or whether the expense policy must first be adjusted and submitted to the tax authorities for approval.

Some cantons, such as Zug, Lucerne, Bern, and St. Gallen, have already published online that employers may apply the increased rate to existing, approved expense regulations, even if these still provide for a lower mileage rate. It is therefore not necessary to adjust and re-approve the expense regulations in this regard. We recommend coordinating the procedure with the cantonal tax authorities for existing expense regulations if no publication has yet been made.

Labor law considerations

Employers must reimburse employees for all necessary expenses incurred in connection with their work. If the employee uses their private vehicle for business purposes with the employer's consent, they must be reimbursed for the usual operating and maintenance costs in proportion to their use for work.

In practice, it is customary to agree on a flat-rate expense allowance, for example in the form of a flat-rate mileage allowance or a monthly allowance. Such flat rate mileage allowance must cover at least the average operating and maintenance costs. From a tax perspective, it is recommended that such flat rates be submitted in advance to the tax authorities for approval in an expense policy.

Due to the increase in the tax-recognized mileage allowance from CHF 0.70 to CHF 0.75, employers are not automatically obliged to apply this rate if a lower rate has been expressly agreed in the contract. The Swiss Code of Obligations does not prescribe a fixed mileage rate, but merely requires the reimbursement of necessary expenses. The amount of CHF 0.75 primarily represents a maximum value accepted for tax purposes, but not an obligation under labor law.

Nevertheless, it may still make sense for employers to apply the increased mileage allowance of CHF 0.75 despite contractual provisions to the contrary.

If a lower mileage rate continues to be applied, there is a risk that the allowance will no longer adequately cover the actual costs incurred. Adjusting to the current benchmark reduces this risk and helps to avoid labor law disputes or additional claims.

Do you have any questions? Our MME team will be happy to assist you.

 

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