TL;DR: The additional agreement to the double-taxation treaty between Switzerland and France entered into force on 24 July 2025, and its main provisions apply from 1 January 2026. Cross-border workers living in France and employed by a Swiss employer can now telework from home up to 40% of their working time per calendar year without triggering French taxation on those days. Exceed the threshold and all teleworking days shift to French withholding tax, administered by the Swiss employer. Swiss employers face new annual reporting obligations from 1 January 2026, with the first automatic exchange of information taking place in 2027. This is what changed, why it matters, and what both cross-border workers and Swiss employers should be doing now.

For the roughly 220,000 people who live in France and cross the border every day to work in Switzerland, the tax status of a home-office day has never been fully settled. Provisional COVID-era arrangements kept the treatment stable through the pandemic and its aftermath; a permanent successor took considerable negotiation. That successor is now in force. On 24 July 2025 the additional agreement to the Franco-Swiss double-taxation treaty formally entered into force. Its central provisions have applied since 1 January 2026, and if you are a Swiss employer with cross-border staff, or a French-resident employee working for a Swiss company, the arithmetic of your working week has structurally changed.

This post walks through the new 40% rule in plain terms – what it says, what it does not say, who benefits, who now has a new administrative burden, and how it interacts with the separate but overlapping social-security rules.

What the 40% rule actually says

Under the new provisions, cross-border workers whose employer is based in Switzerland may perform up to 40% of their working time per calendar year as home-office work from their French residence, without shifting the taxation of that income to France. The employer’s country – Switzerland – remains the state where employment income is taxed, provided the 40% cap is respected.

Three details matter.

The cap is annual, not weekly. The number to watch is 40% of the working days in the year – not 40% of any given week. A worker who does five days on Swiss soil for the first two months and then two days a week from home for the rest of the year is playing a different game to one who consistently does two out of five days from home. The former has more flexibility across the year; the latter is locked at the threshold and needs to be careful about slippage.

The cap applies regardless of formal cross-border commuter status. The 40% teleworking threshold is available to all cross-border workers – those with a formal G-permit (Grenzgänger) and those without. This is a broader eligibility than the previous COVID-era arrangements, which applied only to specific categories.

Business travel days count against the cap. Days spent working on behalf of the Swiss employer in France or a third country are treated the same as teleworking days for the purpose of the 40% calculation. There is a sub-limit inside this: temporary assignments carried out in the country of residence or a third country must not exceed 10 days per year on top of the general 40% teleworking allowance. If your role involves regular business travel back to France or to other European offices, that ceiling is easier to hit than it looks.

What happens if you exceed 40%

The consequence of exceeding the 40% teleworking threshold is severe and easy to underestimate.

If a cross-border worker exceeds 40% of teleworking days in the calendar year, the tax treatment does not switch only for the excess days. The entirety of the teleworking days for the year becomes taxable in France, not just the days above the threshold. Those days are subject to French withholding tax, and the obligation to withhold that tax falls on the Swiss employer – the exact payroll and reporting mechanics should be confirmed against current official implementation guidance as it beds in over 2026.

The practical implication for a Swiss employer:

  • If any cross-border employee crosses 40%, the employer must register with French tax authorities, apply French withholding on all teleworking days for that employee, and remit the tax accordingly.
  • This is a genuine cross-border payroll obligation, not a paperwork inconvenience.
  • Small overshoots produce disproportionate cost and administrative complexity.

The practical implication for a cross-border employee: your employer will care very intensely about your teleworking day count once it approaches the ceiling. Do not expect flexibility beyond the cap. Many Swiss employers will now cap teleworking days more tightly than 40% – often at 30% or 35% – to leave a buffer for business travel days and to reduce the risk of an accidental threshold breach.

Swiss employers’ new reporting obligations from 1 January 2026

The 40% rule does not run on trust. From 1 January 2026, Swiss employers of cross-border workers teleworking from France face new annual reporting obligations to the Swiss tax authorities.

The information Swiss employers must provide includes:

  • First and last name of the employee
  • The calendar year covered
  • Total number of teleworking days
  • Total gross salary paid

These reports feed the automatic exchange of information between Swiss and French tax authorities. The first automatic exchange takes place in 2027, covering the 2026 calendar year.

For Swiss employers, this means the following are now baseline requirements:

  • A reliable tracking system for cross-border employees’ teleworking days
  • Clear internal policies capping teleworking below the 40% ceiling with a buffer
  • Payroll or HR system integration to produce the annual reports
  • Communication with cross-border staff about the new obligations

Any Swiss employer of French-resident staff that has been running informal teleworking arrangements up to now needs to formalise them before the 2026 tax year closes. Waiting until the 2027 exchange to discover a compliance gap is the wrong strategy.

How this interacts with social security

The 40% teleworking rule sits alongside – but is distinct from – the EU/EFTA social security coordination rules, which use their own thresholds. It is easy to conflate the two. They are not the same, and they can produce different answers.

The default EU/EFTA social security threshold is 25%. If a cross-border worker performs 25% or more of their working time in their country of residence, the social security system of the residence country generally applies, replacing Swiss social security jurisdiction.

The 2023 multilateral framework agreement raises this to 49.9% for cross-border teleworkers between signatory states – Switzerland included – provided both employer and employee formally opt in via a joint declaration. Within that framework, teleworking up to 49.9% of working time from France (or any other signatory state) can continue without the social security switch.

Tax and social security are decided separately. A Franco-Swiss cross-border worker teleworking 30% of the year from France:

  • Stays within the 40% tax threshold – Swiss income tax continues to apply
  • Is above the 25% default social security threshold – French social security would normally apply
  • Can stay in Swiss social security if the multilateral framework agreement is invoked (up to 49.9%)

Cross-border employees and their Swiss employers should check both regimes independently. Optimising for one and ignoring the other creates surprises.

What this means for cross-border employees

If you are a French resident working for a Swiss employer, the new rules give you real flexibility – but the flexibility comes with tight guardrails.

Practical actions:

  1. Track your teleworking days meticulously. Calendar entries, timesheet flags, whatever works – but keep the record. If tax authorities audit, you want to be able to prove the count.
  2. Know your employer’s internal cap. Many Swiss employers now cap at 30–35% to leave a safety buffer. Understand your firm’s policy before you plan a long remote working period.
  3. Watch the 10-day business travel sub-limit. Days spent working from France on behalf of your employer – including one-off client visits, internal French office visits, and third-country business trips – count differently but are also capped. Do not accidentally push yourself over both limits.
  4. Ask about the multilateral framework agreement for social security. If your employer has not activated it, and you telework more than 25% of your time, your social security jurisdiction may already have switched to France without you noticing, even if your tax status is still Swiss.
  5. Do not assume the 40% rule will hold going forward without change. Cross-border tax rules are politically live. Model your finances so that a change of regime is not catastrophic.

What this means for Swiss employers

If you employ French-resident cross-border staff, treat the 1 January 2026 change as an active compliance project, not a footnote.

Practical actions:

  1. Codify a firm-wide teleworking policy for cross-border staff. Set the cap tightly enough to accommodate business-travel-day overlap. A single unified policy is easier to administer than a per-employee negotiation.
  2. Build or buy the tracking infrastructure. You need a defensible record of teleworking days per employee for the annual report. Manual approaches will not scale.
  3. Prepare for the annual reporting obligation. The first report is due for the 2026 calendar year. Do not leave it to the last minute in early 2027.
  4. Consider the social security framework alongside the tax regime. If your firm has not opted into the 2023 multilateral framework agreement for social security, teleworking beyond 25% starts to create parallel French social security obligations, regardless of the 40% tax threshold.
  5. Model the cost of a threshold breach. Understand what French withholding tax registration would look like for your payroll and HR functions. Even if you never expect to trigger it, the model informs how much buffer you leave under the 40% cap.

Other bilateral arrangements to watch

The Franco-Swiss agreement is the most detailed and most recent, but Switzerland has cross-border tax arrangements with all four of its neighbours, and the picture is not uniform.

  • Germany: a specific bilateral arrangement allows certain G-permit cross-border workers to work up to 49.9% of their time from home in Germany while remaining insured in Switzerland, but tax allocation may still shift depending on the mix.
  • Italy: the cross-border tax framework was revised in 2023, with a category of “new cross-border commuters” taxed at source in Switzerland (with an 80% cap) and older commuters retained under the previous regime.
  • Austria and Liechtenstein: smaller-scale but similar bilateral logic, with country-specific thresholds and reporting expectations.

Anyone running a Swiss employer’s cross-border footprint should not assume the 40% Franco-Swiss rule is the pattern for the other three borders. It is not. Each treaty needs its own compliance review.

Bottom line

The 40% rule is a genuinely better arrangement than the pre-2026 patchwork of provisional COVID-era measures – it provides legal certainty, it is broad in eligibility, and it embeds annual reporting so that both tax authorities can see the picture cleanly. But it is also an unforgiving rule. The all-or-nothing consequence of crossing the threshold, the tight 10-day business-travel sub-limit, and the new annual reporting obligation together mean that Swiss employers of French-resident staff, and the staff themselves, need to treat teleworking day counts as a first-class number in their working year.

If you are an employer, get your policy and tracking in place now. If you are a cross-border employee, know your number, and know your employer’s internal cap. Both sides win when the arithmetic is boring.

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