Expense regulations
Question
Our committee has taken the decision to pay its members an attendance fee in future. Do we require the approval of the general meeting for this?
Answer
The association's articles of association govern who within the association has what authority. If it is stated therein, for example, that the committee is only entitled to compensation for actual expenses, it cannot pay its members attendance fees unless the payment takes the form of a flat fee for any expenditure incurred. If there is no such regulation in place and the general meeting decides on the budget, the amount must be listed there. This allows the members to exert influence during the budget approval process. It is possible that the committee also has a fixed amount at its disposal about which it can decide itself.
If no reference is made in either the articles of association or the relevant regulations about the authority for spending, it is best if the committee presents compensation and expense regulations to the general meeting for approval.
Please note that attendance fees represent compensation for performed work, meaning that the recipient also has to pay tax on them, i.e. the association has to prepare a salary statement. If the compensation totals more than CHF 2500 per person per year, the relevant social insurance contributions must also be settled (see the work aid "Expenses, expense regulations, compensation" in this regard).
Question
Are committee members generally entitled to compensation for the performance of their committee function?
Answer
There is no legal entitlement to compensation for committee members. On the contrary: an important condition for the association's tax-exempt status is that committee members perform their role on an unpaid basis. They are, of course, entitled to the payment of any expenses incurred. Compensation can be provided for special professional tasks but this should always be linked to specifically described and limited assignments.
All compensation paid to the committee must be included in the budget and be reported as such in the accounts. Always bear in mind that other forms of recognition are possible, including the option to complete further training, the waiving of membership fees and the provision of extras.
And it is also important to note that recipients of compensation that goes beyond an expenses allowance must also pay tax on the relevant amount, meaning that the association is required to prepare a salary statement. If the compensation totals more than CHF 2300 per person per year, the relevant social insurance contributions must also be settled (see the work aid "Expenses, expense regulations, compensation" in this regard).
Question
Within our committee, there are very different opinions as to how expenses are to be reimbursed and whether committee members should receive compensation. What is the right approach?
Answer
In many associations, expense regulations and committee compensation are an ongoing topic and are often even a permanent source of conflict that is never made an issue. From a legal standpoint, there are no exact regulations on this issue and associations handle the topic of compensation very differently. Here are a couple of points of reference:
It should be a matter of course that compensation is provided for expenses that are actually incurred.
The expense regulations and the compensation provided must be adjusted in line with the association's financial situation. This expenditure should be included in the budget.
Generous lump sums and compensation payments may exhibit the character of payments that are subject to tax and other duties.
For associations that are exempted from tax and those that bear the ZEWO quality seal, more stringent requirements apply.
It is highly recommended to discuss the compensation of expenses in detail within the committee and to record the regulations decided upon in writing. See in this regard the work aid "Expenses, expense regulations, compensation".
