Mercans CountryIntel ® Switzerland Payroll And HR Insights
Mercans offers complete payroll, PEO and HR services in Switzerland
Switzerland is not an EU (European Union) member but has signed up to many of its policies. Swiss business people are also experienced in conducting international business. While English is widely spoken, Switzerland’s four official languages are German, French, Italian and Rumantsch.
Doing Business in Switzerland
Zurich is the centre for international business and commerce and has more banks per inhabitant than any other country in the world. Switzerland offers stable political, economic and financial framework conditions combined with a high standard of life.
Entity Registration & Incorporation Requirements
Setting up a new business or expanding an existing one in Switzerland is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.
Banks are open from Monday to Friday 8:30 am to 4:30 pm.
The standard working week is 40 hours per week usually worked from Monday to Friday
Citizens of the EU (European Union) and EFTA (European Free Trade Association) can enter, live and work in Switzerland. Special rules apply to Croatian nationals.
Banking, finance and agriculture
Dates & Numbers
Official State Name
German, French, Italian
International Dialing Code
Large enterprise organisations that operate global payroll (either internally or through a global payroll service provider) should take note that there is no minimum wage in Switzerland. However, some cantons (administrative divisions which are the member states of the Swiss confederation) have a minimum wage that applies in that canton.
It is acceptable to provide employees with online pay slips
Payroll Reports must be kept for 10 years
3 weeks fully paid
14 weeks of paid maternity leave and 2 weeks of paid paternity leave
Maternity & Paternity Leave
On provision of seven days notice prior
The 13th salary isn’t compulsory but common and usually found in the employment agreement
The employee shall receive a remuneration of 25% more than their normal hourly rate
An employee is entitled to a severance payment if they are over 50 years old and have provided 20 or more years of service.
Tax and Social Security
How much an individual’s tax bill is will depend on the amount earned and where they live, among other things. Taxes are also calculated not on total income but on taxable income. There is a network of different types of social insurance which offers people living and working in Switzerland (and their dependents) broad protection against risks whose consequences cannot be covered without insurance.
The cantons and communes levy taxes on both the income and assets of individuals Each canton has its own tax laws which means the tax burden varies from one canton to the next. The cantonal tax authorities calculate taxes based on the figures provided in the individual’s tax return. The amount paid is assessed annually and normally paid in installments.
Corporate Income Tax
Personal Income Tax
Switzerland’s social security system is divided into five areas: old age, survivors’ and invalidity insurance; protection against the consequences of illness and accidents; income compensation allowances in case of service and in case of maternity; unemployment insurance; and family allowances.
Social Security Rate
Social Security Rate for Employers
Social Security Rate for Employees
Working in Switzerland brings an individual into the Swiss social insurance system. Not all contributions are deducted from an individual’s salary. Health insurance is compulsory but private.
Generally, new employees and their employers need to sign an employment contract which sets out both rights and responsibilities. Where fixed-term contracts are applicable, the date the contract ends must be signified. While contracts are generally concluded in writing, oral contracts are valid.
An individual’s contract defines the number of hours to be worked weekly. If an individual works more than the hours stipulated or if asked to work overtime, such overtime must be necessary with daily rest periods respected. Duration of the probation period varies depending on whether the contract is open-ended, fixed-term or an apprenticeship.
In Switzerland, all workers are entitled to at least four weeks’ holidays per year. Days or hours off can be taken for special events. Additionally, time off work can be taken (without the need to make up the hours/days) for court appearances, marriage, births or deaths, moving house, caring for a close relative and more.
Any termination of the employment relationship must be informed in writing and termination is valid from the time the other party is informed. The notice period must be respected. There is also protection from termination in that employers cannot fire employees who are unable to work due to illness or accident.
7 days prior notice
Minimum notice period for terminating an employee
Total number of public holidays
Working hours per week
Total number of days for Compassionate & Bereavement Leave
Generally, short-term employment (that is up to 30 months or 90 days per calendar year) does not require a residence permit. Employment for longer than that period requires a residence permit from the Swiss commune in which work will be started.
Most foreign nationals require a permit to work in Switzerland. The procedure for obtaining the permit depends on nationality and type of employment. Citizens of the EU/EFTA can live and work in Switzerland. As UK nationals are no longer citizens of the EU, they are subject to the same rules that apply to third-country nationals. Only qualified non-EU/EFTA nationals with several years of experience may work in Switzerland.
Work Permit validity
a valid Passport
applicable visa (tourist, transit, visit)
Business invitation letter from relevant Swiss company
Evidence of financial support
Letter from employer permitting business travel
Business bank statement for the last six months
Build the best team and hire top talent compliantly in Switzerland. Get in touch with Switzerland payroll outsourcing & PEO specialists for a free consultation!