Country Guides

Switzerland

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Capital

Bern

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Language

German/ French/Italian/Romansh

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Remote workers

1.5 million

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Currency

Swiss Franc (CHF)

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Working hours

40 hours per week

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Public holidays

8-15 days per year

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Minimum hourly salary

Varies depending on the canton

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Tax year

Jan 1 - Dec 31

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Date format

DD/MM/YYYY

Misclassification penalties

Worker misclassification is a serious compliance issue that can lead to significant financial and legal consequences for businesses operating in Switzerland. Under Swiss labour law, correctly determining whether a worker is an employee or an independent contractor is crucial for avoiding fines, retroactive payments, and potential lawsuits.

Fun fact

People in Switzerland eat around 10–11 kg of chocolate per person each year, making it one of the highest chocolate consumption rates in the world.

Employer contributions

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    Employment tax: 0%
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    Social Security: The Swiss social security / pension system is built around three “pillars” which work as three layers of retirement protection. Pillar 1 and 2 are mandatory and employers are taxed at 7.4% - 9.4% for Pillar 1 and 3.5% - 9% for Pillar 2

Employer social security contribution

1st pillar

Contribution: Old-age, survivors and disability insurance + income compensation (AHV/IV/EO)

Rate: 5.3%

Contribution: Unemployment insurance (ALV)

Rate: 1.1% (up to CHF 148,200 salary)

Contribution: Family allowances

Rate: ~1% – 3% (varies by canton)

Contribution: Administrative fees

Rate: Varies by compensation fund

2nd pillar

Age: 25–34

Minimum contribution*: ≥ 3.5%

Age: 35–44

Minimum contribution*: ≥ 5%

Age: 45–54

Minimum contribution*: ≥ 7.5%

Age: 55–65/64

Minimum contribution*: ≥ 9%

*Employers must contribute at least 50% of occupational pension (BVG) contributions, though many employers contribute more depending on the pension plan.

Employee contributions

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    Income tax: Progressive; typically ~10% – 35% depending on income level, canton, and municipality of residence.
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    Social security contributions: 7.4% - 10.4% for Pillar 1 and 3.5%-9% at maximum for Pillar 2 (if the employer pays more than 50% of the share, the employee will have to only pay the balance)

1st pillar

Contribution: Old-age, survivors, disability and income compensation insurance (AHV/IV/EO)

Rate: 5.3%

Contribution: Unemployment insurance (ALV)

Rate: 1.1% (up to CHF 148,200 salary)

Contribution: Non-occupational accident insurance (NBU)

Rate: ~1% – 4% (varies by insurer and industry)

Contribution: Occupational pension (2nd pillar – BVG)

Rate: Varies by age and pension plan

2nd pillar

Contribution: Occupational pension (BVG)

Rate: Varies by age and pension plan for a maximum of 3.5%-9.0%

Income tax

Switzerland levies income tax at three levels: federal, cantonal, and municipal. The table below shows federal tax rates only, and total tax liability varies depending on the taxpayer’s canton and municipality of residence.

Taxable income (CHF): 0 – 18,500

Tax rate (%): 0%

Taxable income (CHF): 18,500 – 33,200

Tax rate (%): 0.77%

Taxable income (CHF): 33,200 – 43,500

Tax rate (%): 0.88%

Taxable income (CHF): 43,500 – 58,000

Tax rate (%): 2.64%

Taxable income (CHF): 58,000 – 76,100

Tax rate (%): 2.97%

Taxable income (CHF): 76,100 – 82,000

Tax rate (%): 5.94%

Taxable income (CHF): 82,000 – 108,800

Tax rate (%): 6.60%

Taxable income (CHF): 108,800 – 141,500

Tax rate (%): 8.80%

Taxable income (CHF): 141,500 – 184,900

Tax rate (%): 11.00%

Taxable income (CHF): 184,900 – 793,400

Tax rate (%): 13.20%

Taxable income (CHF): Over 793,400

Tax rate (%): 11.50%

Total Income tax burden (individuals)

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    Low-Tax cantons (e.g., Zug, Schwyz): 10%–15%
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    High-Tax cantons (e.g., Geneva, Bern, Vaud): 30%–40%+

Statutory benefits in Switzerland

  • Accident insurance (UVG)

    Employers in Switzerland must provide accident insurance (UVG) covering occupational accidents up to a maximum insured salary of CHF 148,200 per year, with the average premium for occupational accident insurance (BU) around 0.79% of salary paid by the employer

  • Old-age, survivors, disability and income compensation insurance

    Employers contribute 5.3%

  • Unemployment insurance

    Employers contribute 1.1% of salary up to the contribution ceiling

Non-mandatory benefits in Switzerland

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    Additional vacation days
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    Subsidised meals or canteens
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    Public transport allowance
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    Home office allowance
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    Flexible work arrangements
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    Professional development
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    Gym memberships or wellness allowance
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Right to equal pay

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Right to payslip

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Right to a safe and healthy workplace

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Anti-discrimination and equality protection

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Protection against unfair dismissal

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Data protection and employee privacy

Paid time off

20-25 days

Sick leave

15 days paid by employer followed by 2 years of daily sickness benefits insurance (Krankentaggeld) for 2 years after which disability insurance or occupational pension pillar 2 might kick in

Maternity leave

14 weeks

Paternity leave

2 weeks taken within six months of the child's birth

Compassionate leave

1 to 3 days for death of wife, husband, registered partner etc.

Probation

In Switzerland, the standard probation period ranges from one to three months, unless otherwise specified in the employment contract or collective agreement.

Written employment terms

Employers must provide written employment terms if the contract exceeds one month (including salary, working hours, and notice periods).

Payday

Employees usually receive their salary at the end of the month, unless otherwise specified in the employment contract or collective agreement.

Payment frequency

Salaries in Switzerland are typically paid on a monthly basis.

Terminating employment in Switzerland requires careful consideration, as Swiss employment law provides significant protections for employees.

Employment relationships can be terminated in four ways:

  • Mutual agreement between the employer and employee
  • Resignation by the employee, respecting the applicable notice period depending on length of service
  • Unilateral termination by the employer, in accordance with statutory notice periods
  • Expiry of a fixed-term contract

Swiss labour law also protects employees from dismissal during certain protected periods, including pregnancy and maternity leave, temporary illness or accident, and military or civil service obligations. In some cases, employees may also be protected due to family-related circumstances.

Employees who believe they have been unfairly or abusively dismissed may challenge the termination and seek financial compensation.

FAQs

While there are generally four ways of employing people across borders, not all are legal or sensible. Here is an overview of each way to employ a worker in Switzerland, outlining the potential cons.

HQ country employment & payroll

While the person is in Switzerland, they are employed and paid directly by the company’s HQ entity. This may appear attractive, but it generally isn’t legal in the long term. Paying the employee’s salary won’t be possible if the person is not a tax resident in the HQ country.

Independent contractor agreements

People are locally registered as sole traders or limited liability company owners in Switzerland and invoice for their work. There is no direct employment relationship. In Switzerland, this is not a compliant or legal way to engage full-time workers who work solely for your company. There will be challenges in attracting and retaining talent.

Direct local employer setup

The company sets up as a fully-compliant local employer. This often involves setting up a local entity and local tax registration. The cons of this method are that it is expensive, time-consuming, and highly complex. Unknowns around how obligations and costs will evolve over time. There will be a need to stay on top of changes in regulations.

Partnering with a temp agency licence holder in Switzerland

Employment is handled by a platform that specialises in employing people on behalf of customer companies. The temp agency licence holder helps to hire and pay employees. For some countries, the ongoing costs may be higher than direct employment. Some education is needed to inform employees about how the employment relationship will work. In Switzerland, there are limitations on the length of this model.

Setting up a local company in Switzerland is relatively straightforward. However, the difficult part comes after the initial setup when payroll needs to be calculated and run every month, taxes filed, benefits extended, change of rules and regulations followed.

While many employers practice employing remote workers as independent contractors, it’s a bad practice. If an individual is giving their full and undivided attention to your company in Switzerland, treating them as an independent contractor is a likely breach of Swiss employment laws and of those in your country.

Your company could be liable for fines on owed holiday pay, sick pay, social welfare payments, paternity benefit, maternity benefit, or other legal measures. Since the individuals you are working with do not receive the benefit of local employment laws and protections that are often afforded to people working full-time hours.

When you hire employees in Switzerland, you have certain obligations as an employer. HR compliance is about ensuring your policies and procedures respect all applicable laws and regulations regarding employment and work practices. Complying with Swiss labor law is fundamental for the correct running of your business – not only because these laws are in place to protect employees and guarantee their rights are safeguarded, but to minimise your risk of liabilities as an employer. Being compliant means respecting and following all local labour laws, sick leave and illness benefits, annual leave, minimum wage, tax credits, working hours regulations.

As with every other country, there are certain costs associated with employing a worker in Switzerland that come on top of the gross salary you are offering. In Switzerland that is Pay-related social insurance contribution. To view the exact percentages and amounts given the salary you are planning to offer, you can use our handy calculator tool.
It means that Boundless is the legal employer of the individual, as far as the Swiss government, tax, and employment authorities are concerned. We are responsible for:
  • informing you about any pre-employment requirements
  • ensuring their employment is compliant with Swiss employment law
  • informing you about the length of the maternity leave, paternity leave, public holidays, illness benefits, medical benefits
  • providing a locally compliant employment contract
  • processing local payroll
  • filing employment-related tax returns
  • issuing payslips to the employee
  • distributing salary payments
  • payments to the local tax authorities
Customers that work with an Employer of Record in Switzerland are responsible for:
  • sourcing and recruiting their own workers
  • managing the employee’s day-to-day work load
  • contributing to the personal / professional development of the employee through their work
  • following any guidance we give on employment and HR best practices or legal obligations in Switzerland, such as the employment contract, public holidays, annual leave, sick leave, maternity and paternity benefits, probationary periods, overtime pay, statutory redundancy payments, liability insurance and many others
  • ensuring that payroll bills relating to their team are paid to Boundless before the cut-off point in each pay cycle

The Employer of Record acts as the legal employer and is responsible for withholding income tax (where applicable), filing payroll reports, and paying mandatory social security contributions to the relevant Swiss authorities.

We carefully choose employment lawyers or advisories to partner with in each country we operate in, including Switzerland. They ensure the Swiss employment contracts, and any other relevant documents required for new employees comply with the local jurisdiction. We have thorough discussions on specific norms such as payroll services, social protection, data protection, notice period or work-from-home regulations. Whenever a potentially sensitive issue arises in Switzerland, our internal team contacts the relevant firm to ensure all steps are taken to resolve it promptly.

The company remains responsible and informs employees of the day-to-day management of the people and teams that are employed through Boundless, including any disciplinary or performance issues.

Boundless ensures compliance with Swiss-specific procedures, practices and labour laws while employing people and teams on behalf of the company.

Employees hired locally through an Employer of Record receive all employment rights and statutory benefits under Swiss labour law, including a compliant employment contract, maternity leave, paid annual leave, and sickness benefits. In Switzerland, employees must also obtain mandatory basic health insurance under the LAMal/KVG system from approved private insurers.

In Switzerland, both employers and employees are required to pay taxes and social security contributions. For employers, these include contributions to social security such as old-age, survivors, and disability insurance (AHV/IV/EO), unemployment insurance, family allowances, and occupational pension contributions. Employees are responsible for paying income tax as well as their share of social security contributions, including AHV/IV/EO, unemployment insurance, and pension contributions. To get a clear overview of both employee and employer taxes, use our salary breakdown calculator.

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