A Guide To Hire Employees in Switzerland
December 13, 2018
Hire in Switzerland
Switzerland PEO &
Employer of Record
Hire & manage teams remotely in Switzerland without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.
Business Language
German, French, English
Salary Currency
Swiss Franc (CHF)
Payroll tax
8.17% - 23.50%
Payroll Cycle
Monthly
Time zone
UTC +2
Capital city
Bern
Hire Employees in Switzerland
NNRoad provides employer of record (EOR) & professional employment organization (PEO) services to ensure that your business in Switzerland complies with local labor laws and regulations. We process monthly payroll and act as the Employer of Record, taking on all local employer liabilities.
The NNRoad Advantage ☺
Pay as you go
No set-up or overhead costs to global expansion.
Global account manager
One point of contact for all of our 50+ serviced countries and regions.
Compliance
Ensured compliant contracts and operations.
Fast Onboarding
Start working with your remote employees/contractors within a week.
Foreigner Visas
NNRoad assists with overseas foreign hires visa needs.
Platform
Access your payroll reports and employee pay stubs on our portal.
Employer of Record in Switzerland
Employer of Record (EOR) services are for companies who do not have a legal entity in Switzerland, but who want to hire localy. Employment and full liability are outsourced to NNRoad.
01.
Candidate Selection
You interviews & select the candidates you want to hire in Switzerland.
02.
Employee Onboarding
We sign a local labor contract with your employees based in Switzerland.
03.
Compliance & Payroll
We manage monthly payroll, mandatory benefits & all HR compliance in Switzerland.
04.
Payroll Reporting
See all payroll reports on our platform & focus on your business in Switzerland.
Recruiting process outsourcing – including but not limited to resume screening, shortlisting candidates, coordination for interviews, and assistance for salary negotiation.
Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).
On-boarding and off-boarding employees following labor law practice.
Complete payroll solution and benefit administration
Employee management – employee record retaining, time keeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
Mandatory insurance compliance (i.e. pension, labor and health insurance) according to the local labor laws.
Payment management (Invoicing customers/clients and vendor payments).
Work VISA application assistance, if needed.
Local individual income tax reporting.
Payroll & PEO in Switzerland
Professional Employment Organization (PEO) services are for companies who have a legal entity in Switzerland, and want to outsource their payroll. Employment liabilities are shared between your organization and NNRoad.
01.
Compliance & Payroll
We manage monthly payroll, mandatory benefits & all HR compliance in Switzerland.
02.
Payroll Reporting
See all payroll reports on our platform & focus on your business in Switzerland.
Registering the necessary company and personnel information for payroll calculation in the payroll software and system
Monthly Payroll Processing
Year-End Adjustment and Annual Declaration
Taxes & Payroll in Switzerland
Employee Income Taxes:
Individual income tax rates in Switzerland are based on progressive tax brackets.
Switzerland has a highly progressive individual income tax system, with rates ranging from 0% to 11.5% depending on the taxpayer’s income level and tax status. The country has a system of three tax pillars, with the first two pillars consisting of the state and cantonal taxes, and the third pillar covering voluntary private pension plans.
Foreign residents who earn income in Switzerland are also subject to Swiss taxes, but may be eligible for certain tax exemptions or deductions. Switzerland has a tax treaty network with over 100 countries, which can provide relief for double taxation.
Tax Brackets
Tax Brackets (Single Taxpayers)
0 – 14,500 CHF: 0%
14,500 – 31,600 CHF: 0.77%
31,600 – 41,400 CHF: 0.88%
41,400 – 55,200 CHF: 2.64%
55,200 – 72,500 CHF: 2.97%
72,500 – 78,100 CHF: 5.94%
78,100 – 103,600 CHF: 6.60%
103,600 – 134,600 CHF: 8.80%
134,600 – 176,000 CHF: 11%
176,000 – 755,200 CHF: 13.20%
Over 755,200 CHF: 11.50%
Tax Brackets (Married Taxpayers And Single Taxpayers With Minor Children)
0 – 28,300 CHF: 0%
28,300 – 50,900 CHF: 1%
50,900 – 58,400 CHF: 2%
58,400 – 75,300 CHF: 3%
75,300 – 90,300 CHF: 4%
90,300 – 103,400 CHF: 5%
103,400 – 114,700 CHF: 6%
114,700 – 124,200 CHF: 7%
124,200 – 131,700 CHF: 8%
131,700 – 137,300 CHF: 9%
137,300 – 141,200 CHF: 10%
141,200 – 143,100 CHF: 11%
143,100 – 145,000 CHF: 12%
145,000 – 895,900 CHF: 13%
Over 895,900 CHF: 11.50%
0 – 14,500 CHF: 0%
14,500 – 31,600 CHF: 0.77%
31,600 – 41,400 CHF: 0.88%
41,400 – 55,200 CHF: 2.64%
55,200 – 72,500 CHF: 2.97%
72,500 – 78,100 CHF: 5.94%
78,100 – 103,600 CHF: 6.60%
103,600 – 134,600 CHF: 8.80%
134,600 – 176,000 CHF: 11%
176,000 – 755,200 CHF: 13.20%
Over 755,200 CHF: 11.50%
Tax Brackets (Married Taxpayers And Single Taxpayers With Minor Children)
0 – 28,300 CHF: 0%
28,300 – 50,900 CHF: 1%
50,900 – 58,400 CHF: 2%
58,400 – 75,300 CHF: 3%
75,300 – 90,300 CHF: 4%
90,300 – 103,400 CHF: 5%
103,400 – 114,700 CHF: 6%
114,700 – 124,200 CHF: 7%
124,200 – 131,700 CHF: 8%
131,700 – 137,300 CHF: 9%
137,300 – 141,200 CHF: 10%
141,200 – 143,100 CHF: 11%
143,100 – 145,000 CHF: 12%
145,000 – 895,900 CHF: 13%
Over 895,900 CHF: 11.50%
Sample Calculation
Employer Costs in Switzerland
Employer costs in Switzerland can vary depending on the type of employment relationship, the industry, and the region. The primary cost for employers is social security contributions, which fund various social benefits such as old-age and disability insurance, health insurance, and unemployment insurance. Employers are required to contribute a certain percentage of their employees’ gross salary towards these social security programs.
Employers are responsible for providing mandatory accident insurance coverage for their employees. Other employer costs may include contributions to occupational pension plans, training and development programs, and employee benefits such as health insurance and transportation allowances.
The employer must pay at least 50% of the total contributions. Savings contributions range from 7% to 18% of covered pay depending on age.
| Employees Age | Saving Contributions |
| 25-34 | 7% |
| 35-44 | 10% |
| 45-54 | 15% |
| 55-64/65 | 18% |
Benefits & Insurance in Switzerland
Switzerland has a comprehensive system of mandatory contributions that both employers and employees are required to make. The primary mandatory contribution is social security, which includes old-age and disability insurance, health insurance, and unemployment insurance. Employers are responsible for making a percentage-based contribution to each of these social security programs on behalf of their employees, while employees also make their own contributions through payroll deductions.
Employers may be required to make contributions to occupational pension plans, which provide retirement benefits to employees. Other mandatory contributions may include accident insurance, which covers workplace accidents and occupational diseases, and contributions to professional training and development programs.
Social Security System
- Old age and surviving dependents’ insurance (AHV)
- Invalidity insurance (IV)
The employer and employee equally finance it. The contribution is 10.60% (2021) from the total earnings without any salary ceiling.
Occupational Benefits: consists of employer sponsored pension coverage, including the mandatory pension plan (BVG). These benefits are designed to support and protect employees in various ways, and they are an important part of the Swiss social security system. One of the most significant benefits is the mandatory pension scheme, which provides retirement benefits for all employees.
Working Hours in Switzerland
In Switzerland, the standard working week is 42 hours, with most employees working 8.4 hours per day. However, some industries or collective bargaining agreements may have different working hours, with some employees working fewer hours per week. Overtime work is generally limited to a maximum of two hours per day or ten hours per week, and must be compensated either through additional pay or time off in lieu.
Employees are entitled to a minimum of four weeks of paid vacation per year, and may also have additional public holidays or company-specific holidays. The country also has strong regulations around rest and break periods, with employees generally entitled to at least 11 consecutive hours of rest per day and a minimum of 30 minutes of break time for every six hours worked.
Termination Laws in Switzerland
In Switzerland, termination laws and severance pay can vary depending on the employment contract and industry. For employees with an indefinite contract, either the employer or employee can terminate the employment relationship with notice, which is typically between one and three months. However, if the employer terminates the contract without a valid reason, the employee may be entitled to compensation.
Employees may be entitled to severance pay if they are terminated due to restructuring or redundancy. The amount of severance pay is generally based on the length of service and the employee’s salary, and can range from one to three months of salary. For employees with fixed-term contracts, termination is generally only allowed under specific circumstances, such as a breach of contract by the employee or mutual agreement.
Notice period is agreed in the employment contract. Unless stated otherwise in your employment contract (or collective employment contract), the following notice periods apply:
- Probation period: 7 calendar days
- First year of employment: 1 month, to the last day of the termination month (e.g., If employment is terminated on 4 March, your contract will end on 30 April)
- 2 – 9 years of employment: 2 months.
- 10 + years of employment onwards: 3 months.
A fixed-term contract automatically ends on the agreed date and generally cannot be terminated in advance except in special cases or if the contract states likewise. Employer and employee can end a fixed-term contract early if mutually agreed and in accordance with the law.
Employers cannot fire employees who are unable to work due to illness or accident. Employees receive temporary protection from termination during this time, specifically:
- 30 days in the 1st year of work
- 90 days from the 2nd through 5th year
- 180 days starting in the 6th year
The same protections apply during pregnancy and for 16 weeks after giving birth. The employer must always wait until the employee has returned to work before informing them of their dismissal.
Employment Contract in Switzerland
Employment Contract
In Switzerland, employment contract laws are governed by both federal and cantonal regulations. Employment contracts must be in writing and include important information such as job duties, salary, working hours, and notice period. There are different types of employment contracts available in Switzerland, including permanent contracts, fixed-term contracts, and probationary contracts. Fixed-term contracts must have a specific end date or be linked to a specific project, and cannot exceed two years unless there is a valid reason.
There are strict regulations around working hours, rest periods, and vacation time, which must be included in the employment contract. Employers are also required to provide a safe and healthy work environment and may be liable for damages or compensation if an employee is injured on the job.
Full-time or part-time work and can be concluded for an indefinite duration or for a fixed term.
Probation Period
The probation period for open-ended contracts lasts one month, the employer may offer a shorter or longer time (up to a maximum of three months), in which a written agreement must be made between the employee and employer.
There is no probation period required for fixed-term contracts, but the employee and employer may agree to have one.
Types of Leaves in Switzerland
Switzerland has various types of leave available to employees, including vacation leave, sick leave, maternity leave, and paternity leave. All employees are entitled to a minimum of four weeks of paid vacation per year, which increases with seniority or age in some industries. Sick leave is also provided, with employees generally entitled to full pay for a certain number of days per year, depending on the industry and collective bargaining agreements.
Annual Leave
The minimum number of holidays in Switzerland is four weeks (20 days) per year or five weeks for those under the age of 20. However, individual or collective contracts can provide for a higher number of annual days. Employees over 50 years of age are often granted more paid leave.
Sick Leave
If the employment contract does not provide for any daily insurance benefits, under standard or collective bargaining agreements, the employer pays three weeks’ salary during the first year, the salary for a longer period fixed fairly, taking account of the duration of working relations and the specific circumstances.
The employment contract does provide for daily insurance benefits for both parties. This scenario is common practice. Most daily insurance benefits in the case of illness confer entitlement to at least 80% of salary for 720 or 730 days over a period of 900 days.
Maternity Leave
The female employee is entitled to maternity leave of at least 14 weeks (or 98 days) after delivery During this period, the employer must pay 80% of the salary. During pregnancy and the first few months following the delivery, the female employee is protected by law against dismissal. They also benefit from maternity insurance.
Paternity Leave
The federal law does not provide for the right to paternity leave.
Public Holidays in Switzerland
Public Holidays
Resources