Payroll and Benefits Guide - Switzerland

Switzerland
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Currency

Swiss Franc
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Capital

Bern
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Employer Taxes

8.17% – 23.50%
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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

Switzerland is famous for its Swiss chocolate, known for its high-quality and rich taste.

It is home to numerous world-renowned watchmakers, including Rolex, TAG Heuer, and Patek Philippe.

The country has four official languages: German, French, Italian, and Romansh.

Switzerland is known for its efficient and punctual public transportation system, including its iconic Swiss trains.

It is the birthplace of many famous inventions, such as the Swiss Army Knife and Velcro.

Switzerland is a neutral country and has not participated in any armed conflict since 1815.

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Contributions

Employee Payroll Tax

Contribution TypeRate
Old Age, Survivors, and Disability Insurance5.30%
Unemployment Insurance1.10%
Supplemental Unemployment Insurance0.50%
Non-Occupational Accident Insurance1.00% – 4.00%

Employer Payroll Tax

Contribution TypeRate
Old Age, Survivors, and Disability Insurance5.30%
Unemployment Insurance1.10%
Supplemental Unemployment Insurance0.50%
Family Compensation Fund1.00% – 3.00%
Supplemental Unemployment Insurance0.17% -13.50%
Vocational training Fund0.10%
Dependent on pension plan and is employer specificOccupational Pension Scheme

Payroll

Payroll Cycle

The payroll cycles are Monthly.

13th Salary

A 13th salary is commonly practiced in Switzerland but is not mandatory, and its terms will be specified in the employment contract or collective agreement.

Work Hours and Week

A 40-44 hour workweek is common, dependent on collective bargaining agreement in place.

Overtime

Overtime in Switzerland is paid at 125% of the regular salary rate, typically capped at 2 hours per day, and is governed by the employment contract or collective bargaining agreements.
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Leave

Paid Time Off

Employees over the age of 20 and under 50 receive 4 weeks of paid holiday. Under the age of 20 and over 50 receive 5 weeks of paid holiday.

Public Holidays

There are 11 Public Holidays in Switzerland.

Sick Days

Employees in Switzerland are entitled to paid sick leave based on their years of continuous employment, with up to 3 weeks of paid sick leave in the first year, or the option for daily benefits insurance providing up to 80% of salary for a maximum of 720 days, with a doctor’s note required.

Maternity Leave

Maternity allowance is available to eligible employees who have contributed to OASI for at least 9 months and worked for at least 5 months, providing 80% of wages as a daily allowance for 98 days (up to SFr 196 per day). In Geneva, an additional two weeks are granted, totaling 16 weeks, with a birth certificate required.

Paternity Leave

Fathers in Switzerland have 10 days of paid paternity leave, while federal employees get 4 weeks. The leave can be taken on a weekly or daily basis, including weekends, totaling 14 daily allowances. It must be taken within six months of the child’s birth, and a birth certificate is required.

Parental Leave

There are no statutory laws on parental leave.

Termination

Termination Process

Termination in Switzerland allows freedom of dismissal without an important reason, but it must not be discriminatory or abusive. The reason must be explained upon request, and written termination is recommended for evidence.

Notice Period

Termination is considered legally valid from the moment the recipient receives it.

The statutory notice periods are as follows:

  • 7 days during the trial period
  • 1 month during the first year of service
  • 2 months during the second to the ninth year of service
  • 3 months from the tenth year of service

Severance Pay

Severance pay in Switzerland is outlined in employment contracts or collective agreements, with a statutory entitlement for employees aged 50 and above with 20 years of service and a pension shortfall. The payment ranges from two to eight months’ pay.

Probation Period

Probation Period

The probation period is 1-3 months for indefinite employees.

Immigration

In Switzerland, obtaining a residence permit is possible through being a citizen of an EU member state or the European Free Trade Association (EFTA) or entering Switzerland for a limited period to search for a job.

Various types available based on the employment situation, including L permits for short-term assignments, B permits for longer-term employment, and C permits for permanent residence.

Note that the EU Blue Card is not valid in Switzerland

For Work Permits

In Switzerland, the main types of work permits include
  1. L Permit: This permit is for short-term assignments and is typically issued for a duration of up to 12 months. It is renewable in certain cases.
  2. B Permit: This permit is for longer-term employment and is usually issued for a duration of up to five years. It can be renewed and allows for more stability in terms of residence and employment.
  3. C Permit: This permit is for individuals with long-term residence in Switzerland. It grants the right to reside and work without restrictions, as it signifies permanent residency.
  4. G Permit: This permit is for cross-border workers who live in a neighboring country but work in Switzerland. It allows for employment in Switzerland while maintaining residence in the home country.
  5. Short-Stay Work Permit: For temporary work assignments of up to 90 days, a short-stay work permit may be required depending on the nature of the work and the individual’s nationality.

VAT

The standard rate of VAT in the Switzerland is 7.70%