Employer of Record in Switzerland

Businesses can only operate smoothly in Switzerland if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Switzerland below, to avoid any compliance issues.

Employment Contract Requirements

Switzerland upholds a strong legal framework for employment, governed by its civil law system, as outlined in Article 122.1 of the Constitution. This article empowers the Confederation to legislate regulations concerning employment contracts, which should include:

• Duration of Employment
• Job Description
• Working Hours and compensation
• Termination Conditions

Onboarding Process

We can help you get a new employee started in Switzerland quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Switzerland

The statutory cap on weekly working hours differs by employment category. Industrial workers, office staff, technicians, and similar roles are restricted to a maximum of 45 hours per week, whereas other worker categories have a limit of 50 hours. Most employees typically work a standard week of 40 to 42 hours.

Overtime in Switzerland

In Switzerland, overtime refers to work performed beyond the established standard hours. Employees are eligible for 125% of their usual pay for overtime, or employers may opt to grant compensatory time off. Overtime should not exceed two hours per day or a total of 170 hours annually.

Probation Period in Switzerland

In Switzerland, probationary periods should not exceed three months. Unless the employment agreement specifies differently, an employee's trial period is limited to the first month of their employment

Fiscal Year in Switzerland

1 January- 31 December is the 12-month accounting period that businesses in Switzerland use for financial and tax reporting purposes.

Payroll Cycle in Switzerland

The payroll cycle in Switzerland is usually monthly, with employees being paid on or before the last day of the month.

Minimum Wage in Switzerland

The minimum wage for employees in Switzerland is typically 20.25 CHF - 24 CHF per hour, amounting to ~3,240 CHF - 3840 CHF per month for a typical 40 hour work week.

Bonus Payments in Switzerland

A 13th salary is not obligatory in Switzerland, but it is widely practiced, and if applicable, it will be specified in the employment contract or covered by a collective bargaining agreement.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 8.17% - 23.5% on top of the employee salary in Switzerland.

Employee Payroll Tax Contributions

In Switzerland , the typical estimation for employee payroll contributions cost is around 7.9% - 10.9%%.

Individual Income Tax Contributions

Switzerland's federal income tax operates on a progressive scale. Alongside the federal tax (detailed below), each canton in Switzerland maintains its own corporate tax law and rate.

Pension in Switzerland

In Switzerland, individuals can access state pension benefits via the Old Age and Survivor's Insurance (OASI/AHV) system. Eligibility begins at age 64 for women and age 65 for men. Both employers and employees contribute equally, each at a rate of 5.3%, to the Old Age, Survivors', and Disability Insurance fund.

Mandatory Leave Entitlement in Switzerland

The annual leave entitlement in Switzerland is 4 weeks for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Switzerland

Public holidays in Switzerland can vary depending on the canton (region) as each one has its own set of holidays in addition to the national holidays. However, the following are the national public holidays in Switzerland:

Paid Time Off in Switzerland

Employees in Switzerland are entitled to a minimum of four weeks of paid annual leave, with those under 20 years old receiving five weeks of paid leave.

Maternity Leave In Switzerland

Maternity leave in Switzerland is 14 weeks, and to qualify for maternity allowance, employees must have contributed to OASI for at least nine months before delivery and have worked for a minimum of five months. The allowance is 80% of regular pay, up to a maximum of 196 CHF per day.

Paternity Leave In Switzerland

Fathers in Switzerland are entitled to 10 days of paid paternity leave, while federal employees can take up to 4 weeks of paternity leave within six months of the child's birth, receiving 80% of their average salary with a maximum daily cap of 220 CHF.

Sick Leave In Switzerland

Sick leave duration varies based on an employee's tenure, typically starting with three weeks in the first year. Alternatively, some employers offer benefits insurance, providing 80% of recent salary for up to 720 days of sick leave.

Parental Leave In Switzerland

In Switzerland, there is no specific legislation addressing parental leave.

Care Leave

Employees can take 14 weeks of paid leave to care for a seriously ill or injured child, contingent on a doctor's certificate.

Bereavement Leave

The duration of leave for an employee in the event of a relative's death is not explicitly specified in Swiss labor law and is at the discretion of employers. Typically, close relatives may receive three to five days, while one to three days is customary in other cases.

Termination Process in Switzerland

In Switzerland, employment is typically at-will, allowing either employers or employees to terminate the job at any time. However, terminations usually require valid reasons. An employee can be fairly terminated for one of the following grounds:

• Voluntary resignation
• Mutual agreement
• Objective grounds
• Disciplinary dismissal

Notice Period in Switzerland

During the probationary period, a seven-day notice is required for termination. After the probationary period, the minimum notice period is 30 days, which increases based on the length of employment:

• 1 month for one year of service.
• 2 months for service between the second and ninth years.
• 3 months for service exceeding ten years.

Severance in Switzerland

Severance pay is not mandatory unless specified in the employment agreement or if the employee is 50 or older and has served continuously for over 20 years with the same employer.