Switzerland
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Introduction
General Overview & Economic Facts
- Switzerland, officially known as the Swiss Confederation, is a landlocked country in Central Europe
- It spans a total area of 41,285 km2 (15,940 sq mi) and has a population of approximately 8.5 million
- Switzerland, a highly developed country, is well-known for its good quality of life and highly educated population
- Switzerland’s economy ranks 18th by nominal GDP (2021) and 35th by PPP (2021)
- Switzerland ranks 2nd on the HDI (2019)
Why Employ In Switzerland?
- The main exports from Switzerland are machinery and equipment, chemical-pharmaceutical products, watches and textiles
- 10.39% of the population is between the ages of 15 and 24 years, with 42.05% of the population being between the ages of 25 and 54. Switzerland has a fairly youthful population, making it a favourable country to employ young, energetic employees
Overview Of The Labour Law
- The main sources of labour law in Switzerland are the Code of Obligations, the Labour Act (and its regulations). In some industries, collective bargaining agreements are applicable
- Additional applicable legislation includes the Gender Equality Act, the Participation Act and the Ordinance Against Excessive Compensation
- Swiss labour laws are generally quite liberal and more favorable towards the employer
Fun Country Facts
- Switzerland’s Gotthard Tunnel Is the longest in the world
- Switzerland has the world’s longest staircase
- Animal laws are very strict. For example, social animals must be kept in pairs, and you must complete a course on how to take care of a dog before owning one
Why Use Playroll Services For Switzerland?
- Employing in Switzerland requires companies to have their own legal entity in the country as well as managing payroll, employee benefits, taxes and legal compliance. This can get quite complicated, especially with the complexity of employment laws in Switzerland
- With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
- We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing a thriving team
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Unemployment Insurance Fund
Called ALV (Pillar I: Unemployment Insurance) in Switzerland
Contribution
1.10%
Calculated on a maximum salary of CHF 148,200.00 per month
Solidarity Contribution
0.50%
Calculated on a minimum salary of CHF 148,200.00 per month
Sick Leave Insurance
Called KTG in Switzerland
The daily sickness allowance insurance is optional. Contributions depend on various factors including insurance company and salary
Social Security
Old Age Pension (AHV)
4.35%
Disability Benefit (IV)
0.70%
Loss Of Income (EO)
0.25%
Pension Fund
Called BVG (Pillar II: Occupational Insurance) in Switzerland
Calculated on earnings between CHF 25,095.00 – CHF 86,040.00 per year.
Age 25 – 34
7.00%
Age 35 – 44
10.00%
Age 45 – 54
15.00%
Age 55 – 65
18.00%
VK (Administrative Costs)
0.10% to 5.00%
Varies by Canton
Occupational Accident Insurance
Calculated on a maximum salary of CHF 148,200.00 per month. Contributions depend on various factors including insurance company and salary
Family Allowance
1.20% – 3.60%
Varies by Canton
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Unemployment Insurance Fund
Called ALV (Pillar I: Unemployment Insurance) in Switzerland
Contribution
1.10%
Calculated on a maximum salary of CHF 148,200.00 per month.
Solidarity Contribution
0.50%
Calculated on a maximum salary of CHF 148,200.00 per month
Social Security
Old Age Pension (AHV)
4.35%
Disability Benefit (IV)
0.70%
Loss Of Income (EO)
0.25%
Pension Fund
called BVG (Pillar II: Occupational Insurance)
Calculated on earnings between CHF 25,095.00 – CHF 86,040.00 per year
Health Insurance
Contribution varies by insurance provider
Sick Leave Insurance
Called KTG in Switzerland
The daily sickness allowance insurance is optional. Contributions depend on various factors including insurance company and salary
Non-Occupational Accident Insurance
Called UVG
Calculated on a maximum salary of CHF 148,200.00 per month. Contributions depend on various factors including insurance company and salary
Income Tax
Income taxes are levied at three different levels in Switzerland:
Income taxes are levied at three different levels in Switzerland:
1) at the federal level (which is the same all over Switzerland)
2) at the cantonal level (which is the same within a certain canton and is based on the canton’s own tax law and tax rates)
3) at the municipal level (municipalities follow the cantonal tax law, but are entitled to set their own communal tax rate within certain parameters)
Employment Terms
General
Minimum Wage
- There is no national minimum wage
Working Hours
- Industrial workers, office, technical and other employees including salespersons in large retail stores- maximum of 45 hours per week
- All other commercial enterprises- maximum 50 hours per week
- Minimum 30-minute meal interval for 6 hours of work and 60 minutes for 9 hours of work
- Typical working hours are 08h00 to 17h30, Monday to Friday
Overtime
- Maximum of 2 hours per day
Notice Period
- Employed between 0 and 1 year- 1 months’ notice
- Employed between 2 and 9 years- 2 months’ notice
- Employed for 10 or more years- 3 months’ notice
Severance Pay
-
There is no statutory severance pay
Probation Period
- There is no statutory probation period
- It is common to have a probation period of 1 month
Bonus
- There is no statutory bonus
Public Holidays
Public holidays 2022
- January 1st – New Year’s Day
- April 15th – Good Friday
- April 18th – Easter Monday
- May 26th – Ascension Day
- June 6th – Whit Monday
- June 16th – Corpus Christi
- August 1st – National Day
- August 15th – Assumption Day
- October 28th – Independence Day
- November 1st – All Saints’ Day
- December 8th – Immaculate Conception
- December 25th – Christmas Day
- December 26th – St Stephen’s Day
Leave
Paid Leave / Vacation Days
- Paid leave
- Paid by employer
- 4 weeks per year
Sick Leave
- Paid leave
- Paid by employer and Social Security
- Employed for 1 year- maximum of 3 weeks per year
- Employed for 2 years- minimum of 4 weeks and maximum of 8 weeks per year
- Employed for 3 or more years- minimum of 8 weeks and maximum of 9 weeks per year
Maternity Leave
- Paid leave
- Paid by Social Security
- 14 weeks per year
Paternity Leave
- Paid leave
- Paid by employer
- 2 weeks per year
Parental Leave
- Paid leave
- Paid by employer
- 3 days per year