Europe

Switzerland

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Employer of Record (EOR) in Switzerland

What you'll learn

  • Country Introduction
  • Employment Terms
  • Minimum Wage and Working Hours
  • Statutory Leave Laws
  • Termination Process
  • Additional Information
Switzerland Introduction

Switzerland is a landlocked country in central Europe, bordered by Italy, France, Germany, Austria, and Liechtenstein. The country is geographically divided among the Swiss Plateau, the Alps and the Jura Mountains. Switzerland lies at the crossroads of Germanic and Romance Europe, which can be seen in its 4 main linguistic and cultural regions: German, French, Italian and Romansh. The country has one of the highest costs of living in the world, as well as one of the highest nominal wealth per adult in the world.

Employment Terms

Types of Contracts

Most contracts are either fixed-term (usually at least 6 months), or indefinite. Part-time contracts are possible (e.g. 50% / 25 hours per week).

Working Hours

The statutory maximum working hours in Switzerland is 45 hours per week; however, these hours can vary depending on the job role, industry, and canton.

Overtime

Employees are entitled to a 25% salary supplement for hours worked above the contractually agreed working hours unless otherwise agreed upon in writing or determined by a standard or collective bargaining agreement (CBA).

This supplement also applies to overtime that exceeds the statutory maximum weekly working hours.

However, certain employees, such as office staff, technical employees, sales staff in large retail businesses, and others, are only entitled to the supplement if they work more than 60 hours of overtime in a calendar year. Averaged out over the year, this means that the 25% overtime pay is only applicable for employees who regularly work over 46.25 hours per week.

Temporary night work requires a 25% wage supplement, while permanent or regularly recurring night work requires a compensatory rest period of at least 10% of the time worked at night.

If an employee works on a holiday or Sunday, they are entitled to a 50% salary supplement. Sunday work lasting up to 5 hours must be compensated with time off within 4 weeks, while work exceeding 5 hours must be compensated with a substitute rest day of at least 24 hours.

Employees cannot be required to work on Sundays or at night without their explicit consent. Special provisions apply to certain categories of employees and establishments, and Sunday work may be regulated in a CBA. If a company is not subject to a CBA, the Labour Act applies for authorization of Sunday and night work.

Minimum Wage

The minimum wage in Switzerland depends on several factors, including age, length of service, job role, industry, and canton.

Probation Period

The maximum probation period in Switzerland is 3 months.

Taxes & Local Employment Costs

Employee Taxes & Contributions

The income taxation system in Switzerland is complex and varies according to personal circumstances and the canton the employee resides in. For the latest tax bands, see here.

In addition to income tax, employees must make the following social contributions:

  • OASI (1. Säule, old age and survivors insurance): 5.30%
  • UI (Unemployment insurance): 1.10%
  • Sickness daily allowance (based on a 3-day waiting period): 1.60%
  • SUVA occupational accident insurance (depends on the category of worker): office = 0.65%, mechanical/handicraft = 2.32%, industrial = 1.35%, service = 1.49%

Employer Taxes & Contributions

Employers in Switzerland must make the following social contributions in addition to the employee’s gross salary:

  • OASI/AVS (1. pillar, old age and survivors insurance): 5.30%
  • OASI admin fee (charged by the OASI in order to cover their efforts): 0.30%
  • UI (Unemployment insurance): 1.10%
  • Family compensation fund: 1.30%
  • Sickness daily allowance (based on a 3-day waiting period): 1.60%
  • SUVA occupational accident insurance (depends on the category of worker): office = 0.40%, mechanical/handicraft = 6.10%, industrial = 1.40%, service = 1.40%
  • Additional employee costs (wedding, moving days, funerals, etc.): 1.00% to 5.00%

In addition to these, the employer must contribute towards the employee’s pension, with different amounts according to their age.

These can either be basic contributions (lower), or supplementary contributions (higher). The basic amounts are shown below, with a monthly salary cap of CHF 5036.25:

  • 18-24: 1.3%
  • 25-34: 4.8%
  • 35-44: 6.3%
  • 45-54: 8.8%
  • 55-Pension age: 10.3%

Types of Leave

Annual Leave

Employees in Switzerland are entitled to a minimum of 20 days of annual leave per year.

Sick Leave

Employees in Switzerland are insured with a collective sickness allowance which is paid into by both employee and employer. In order to receive the allowance the employee must notify the employer on day 1, and provide a medical certificate within 2 days. The allowance covers 80% of the employee’s average salary, after a waiting period (typically 3 days).

Maternity Leave

Employees are entitled to a maximum of 14 weeks (or 16 weeks in Geneva) maternity compensation if they:

  • Had Pension and Survivor’s Insurance (AHVG) for the 9 months directly before the birth;
  • Were employed for at least 5 months during this period;
  • Are still employed at the time of birth.

Employees receive 80% of the average employment income earned before the birth, paid out in the form of daily allowances (98 nationally or 112 in Geneva), which cease to be paid if the employee begins working again.

Paternity Leave

Employees in Switzerland are entitled to 10 days of paid paternity leave following the birth of their child, paid with similar rules to maternity leave.

Public Holidays

The national holiday (1st of August) is the only federally regulated paid public holiday.

Besides the 1st of August, the cantons are entitled to independently define 8 public holidays (see here for a list). Work is prohibited on these days same as on regular Sundays.

The employer is legally not obliged to pay for these 8 public holidays. However, it is common practice that the payment of these public holidays is contracted for employees with monthly salaries.

Benefits

Summary

Employers in Switzerland can typically offer allowances (e.g. public transportation), however, there are ordinarily considered taxable income.

It is possible for employers of record to arrange for with the canton (local government office) for an additional 5% of the employee’s salary to be claimed as expenses, which would not be taxable.

These expenses can then be spent on allowances as required, with receipts provided.

Medical Insurance

It is mandatory for employees in Switzerland to have medical insurance, however, they should arrange this themselves and pay the premiums from their net salary; employers are not involved in the process.

Termination Process

Notice Period

During probation, the minimum notice period is 2 days. Outside of probation, the notice periods depend on the employee’s length of service:

  • 1-3 months: 2 days
  • 4-6 months: 7 days
  • 7+ months: 1 month

Payment in lieu of notice is possible, although not common in Switzerland.

Statutory Payments

Any unused leave is typically taken by employees during the notice period, but any days left over should be paid out in the final salary. Severance payments are not mandatory, or common in Switzerland - these can be agreed as part of the employment contracts.

Additional Information

While not required, it is very common for employers to pay a 13th-month salary bonus at the end of the year.

OVERVIEW
Language(s):
Swiss-German, French, Italian, Romansh
Currency:
Swiss Franc (CHF)
Capital City:
Bern
Population:
8.7 Million
Cost of Living Rank:
2nd
VAT (Valued Added Tax):
7.7%
Employer TaxES
11%-20.7%
(estimated)

★  5.3% - OASI/AVS

★  0.3% - OASI Admin Fee

★  1.1% - Unemployment Insurance

★  1.3% - Family Compensation Fund

★  1.6% - Sickness Allowance

★  0.4-6.1% - SUVA accident insurance

★  1-5% - Additional Employee Costs

Simplified Global HR and Payroll.
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1

Remote candidate

You've sourced a full-time employee or contractor located in a country where your company is not incorporated.

2

Cost Calculation

Pass us the details of your candidate and we will let you know exactly what it costs to employ your candidate in that country.

3

Onboarding & Admin

Sit back and relax as we onboard your new team member and take care of all the local compliances and admin work.

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How Remofirst employs in Switzerland

It can be prohibitively expensive to establish an entity in every country you want to hire talent in, so Remofirst will hire and pay your employee on your behalf while you manage their daily duties. Remofirst will handle formal HR procedures and employment contracts that adhere to local laws, so that you can simply approve invoices via our platform. When you work with an Employer of Record (EOR) you can compliantly hire the best employees around the world.

How employees in Switzerland get paid
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. Remofirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees in Switzerland are paid on time in Swiss Franc (CHF). To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Full-time Employees vs Global Contractors

Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.

Dependable support for employees
Whenever the employee or employer has a question about benefits, Visas, or anything else related to international employment in Switzerland, they can use our platform's chat function to get answers from our team of experts. Every client of Remofirst also receives a dedicated account manager that will serve as a point of contact for global HR support.