Hire employees in Switzerland

With minimum wages as high as EUR 20.96, Switzerland for sure is not your go-to option for low employment costs. However, the country ticks all the boxes when it comes to the availability of talented and highly skilled workers.

From a high-quality education system to effective talent management, Switzerland has it all. In fact, the 2020 IMD World Talent Ranking found Switzerland to be in the top position. High English proficiency levels round up the list of reasons why Switzerland is a good place for recruiting international talent.

Although not legally required – in fact, even an oral contract would be acceptable except for apprenticeship contracts and agency-arranged temporary employment – it is best practice to put a written employment contract in place which should outline the following basic terms of employment:

• Identification of both parties

• Date of commencement (and employment duration for temporary contracts)

• Workplace

• Job description, duties and responsibilities

• Basic salary as well as other compensation or benefits

• Working hours

• Total number of holidays

• Notice periods for employment termination

• Probation period

Employment contracts can be concluded for either temporary or indefinite periods.

Probation Period

Probation periods in Switzerland must not exceed three months. Unless specified otherwise in the employment contract, an employee’s trial period is limited to the first month of employment.

Working Hours and Breaks

According to Swiss labour law, an employee’s standard working week should not exceed 45 hours – 50 in some professions and industries. However, most employees work less hours per week.

Overtime

Any work performed beyond agreed standard working hours is considered overtime and must be remunerated at a rate of 125% of the employee’s usual salary. It is also possible to offer the employee additional time off in return for his or her overtime work. Overtime should not exceed two hours per day or 170 hours per calendar year.

Employees in Switzerland usually get paid once a month with payments being issued at the end of each month. For most employees, the pay date is the 25th of the month.

Minimum Wage

Although there is no national minimum wage in Switzerland, some cantons have introduced regional minimum wages. As of 2022, the existing minimum wage rates in Switzerland are set as follows:

• Geneva: CHF 23

• Jura: CHF 20

• Neuchâtel: CHF 20.08

• Ticino: CHF 19

Sick Pay

During an employee’s first year, employers are typically obligated to provide sick pay for a period of up to three weeks. It is common for employers to take out sickness benefits insurance to cover payments to sick employees. Afterwards, sick leave length is subject to cantonal regulations. It is common practice to request a medical certificate from employees whose sickness-related absence from work exceeds three days.

Bonuses

Although it is not mandatory by law, many companies in Switzerland pay their employees an annual bonus equaling a 13th salary.

Employees and employers in Switzerland are subject to the following tax and social security contribution rates (as of 2022): Read more Individual income is taxed progressively based on the following tax brackets which apply on the federal level and to married taxpayers: – up to CHF 30,799: 0% – CHF 30,799 to CHF 50,900: 1% – CHF 50,900 to CHF 58,400: CHF 226 + 2% – CHF 58,400 to CHF 75,300: CHF 376 +3% – CHF 75,300 to CHF 90,300: CHF 883 + 4% – CHF 90,300 to CHF 103,400: CHF 1,483 + 5% – CHF 103,400 to CHF 114,700: CHF 2,138 + 6% – CHF 114,700 to CHF 124,200: CHF 2,816 + 7% – CHF 124,200 to CHF 131,700: CHF 3,481 + 8% – CHF 131,700 to CHF 137,300: CHF 4,081 + 9% – CHF 137,300 to CHF 141,200: CHF 4,585 + 10% – CHF 141,200 to CHF 143,100:CHF  4,975 + 11% – CHF 143,100 to CHF 145,000: CHF 5,184 + 12% – CHF 145,000 to CHF 895,900:CHF  5,412 + 13% – over CHF 895,900: CHF 103,028.50 + 11.5%

Taxes

Employers

8.5%

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• 8.5% corporate tax rate

• 7.7% VAT (standard rate)

Employees

up to 44.5%

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Individual income tax consits of:

• Federal income tax: 0.77% to 11.5% *

• Cantonal income tax: 11.2% to 34.2%

• Combined rates go up to 44.5%

Social security

Employers

around 10%

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around 10% of the employee’s salary including:

• 5.3% to old age and disability fund

• 1.1% to unemployment insurance for all income + additional 0.5% on income exceeding CHF 148,200

Additional contributions need to be made to different social security funds with rates set by each canton, ranging from 3% to 10%. Furthermore, the employer has to provide accident insurance for each employee.

Employees

around 7%

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around 7% of the employee’s salary including:

• 5.3% to old age and disability fund

• 1.1% to unemployment insurance for all income + additional 0.5% on income exceeding CHF 148,200

Additional contributions to distinct social security funds may be levied by different cantons, depending on salary level.

Please note that the social security contributions indicated above do not necessarily reflect the actual employment costs. These may differ depending on the employment contract and due to other factors (e.g. 13th and 14th salary, health insurance allowances, accrual for severance pay, etc.).

Annual Leave

Employees in Switzerland must receive at least four weeks of paid annual leave – five weeks for those aged under 20. However, there are many collective bargaining agreements which provide for more annual leave.

In addition, Switzerland observes five public holidays on the national level on which employees are not required to work. As many public holidays are subject to cantonal regulations, the total number of public holidays may be as high as 15.

Maternity Leave and Paternity Leave

Statutory maternity leave in Switzerland is 98 days, i.e. 14 weeks. However, cantonal law or collective agreements may provide for a longer maternity leave period – for example 16 weeks in Geneva. During this time, the employee receives maternity benefits amounting to 80% of her normal salary – capped at CHF 196 per day.

Since September 2020, fathers in Switzerland can take two weeks of paid paternity leave within the first six months after their child’s birth. Paternity benefits are equal to maternity benefits.

Parental Leave

Swiss labour law does not provide for any further parental leave.

Additional Leave and Benefits

In addition to the leave entitlements mentioned above, employees in Switzerland can request time off work under the following circumstances:

• paid care leave (new as of January 2021): up to ten days per year – each time limited to three days – which can be claimed whenever a family member needs urgent care

• care leave for seriously ill children (introduced in July 2021): up to 14 weeks of paid leave – remuneration rate is 80% of normal salary

• youth leave: up to five days for employees under 30 for volunteer work involving youths

• marriage leave

• bereavement leave

In addition to employment termination by default – i.e. in case of a fixed-term contract – resignation and mutual agreement, employees may be dismissed due to one of the following reasons (non-exhaustive list):

• staff reduction or other business-related reasons for redundancy

• breach of employment contract

• summary dismissal due to gross misconduct

• employee’s underperformance

• employee’s long-term illness

When terminating an employment contract, employees and employers have to respect the following statutory notice periods:

• seven days – during the probation period

• one month – during the first year of service

• two months – from the second to the ninth year of service

• three months – from the ninth year of service onwards

In certain cases, however, an immediate termination of the employment contract is possible – e.g. in case of a severe breach of the employment contract by either one of the parties. Severance pay is not required under Swiss labour law but may be mandatory under a collective agreement.