Switzerland
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Before hiring
Before you hire employees in Switzerland, there are some key things you’ll need to know. Firstly, Switzerland has a complicated three-tiered taxation structure on the national, regional, and local level. It’s crucial for employers to understand this structure and how income taxes may vary for their employees.
In Switzerland, holiday entitlement is also dependent on an employee’s age, though the minimum annual leave entitlement is four weeks per calendar year.
We know keeping track of all this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform.
Get an overview of what you need to know when hiring in Switzerland below.
At a Glance
CURRENCY
CHF
OFFICIAL LANGUAGE
GERMAN, FRENCH, ITALIAN, ROMANSH
PAYROLL FREQUENCY
MONTHLY
EMPLOYER TAXES
8%
13th / 14th SALARY
Not required.
Good to know
- Switzerland has a complex three-tiered taxation structure on the national, regional, and local level. This means income tax rates may vary a lot within Switzerland. Social contributions are split equally between the employer and the employee. Mandatory insurance may increase the employer contributions.
- Compared to other European countries, Switzerland has fairly liberal employment laws, especially when it comes to terminating contracts.
- Overtime is usually compensated with time off in lieu or at 125% rate of base salary. Overtime compensation is capped to 60 hours yearly.
Employment in
Switzerland
Employees in Switzerland usually work 40-42 hours each week. The maximum is 45 hours per week for office workers.
Employees can take rest breaks of:
- 15 minutes when working more than 5.5 hours
- 30 minutes when working more than 7 hours
- 1 hour when working more than 9 hours
Overtime is usually compensated with time off in lieu or at a rate of 125% of an employee’s base salary. Overtime compensation is capped to 60 hours yearly.
The probationary period in Switzerland is between a minimum of one month to a maximum of three months.
The minimum notice period in Switzerland is one month, except when otherwise agreed upon in collective bargaining agreements. Notice periods are the same for employers and employees.
The statutory notice periods are:
- Seven days during probationary period
- One month during the first year of employment
- Two months during the second to ninth year of employment
- Three months from the 10th year of employment onwards
Non-compete agreements are allowed in Switzerland. The provisions must be appropriately limited with regard to place, time, and scope. The duration of non-competition cannot exceed three years from the termination of employment.
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Paid time off
The minimum annual leave entitlement is four weeks per calendar year. If an employee is under twenty or over fifty years of age, the holiday entitlement is five weeks per year. When an employee has worked less than a year, holiday entitlement is fixed pro rata.
During sick leave, employees in Switzerland receive their salary and other contractually agreed-upon compensation for a limited period depending on the years of service. The breakdown is as follows:
- Three weeks in the first year of employment
- Four to eight weeks in the second year of employment
- Eight to nine weeks in the third year of employment
Women in Switzerland are not allowed to work for a period of eight weeks after they have given birth. Mothers receive a total of 14 weeks of maternity leave after giving birth. Mothers receive a daily allowance, which equals 80% of their average salary during a 98-day time period. The maximum allowance is CHF196 per day.
Employees may take time off work for up to three days to take care of sick children.
Employer tax
In Switzerland, employers are required to contribute a minimum of 8.08% in social security contributions which includes:
- Old age, survivors insurance (OASI)
- Disability insurance (DI)
- Income compensation
- Unemployment insurance
- Family contribution
- Travel insurance
- Occupational pension scheme
- Occupational accident insurance
Individual tax
Switzerland has a complex three-tiered taxation structure on the national, regional, and local level. This means income tax rates may vary a lot. Social contributions are split equally between the employer and the employee. Mandatory insurance may increase the employer contributions.
Income taxes are levied at three levels: federal, the cantonal, and municipal. Municipalities follow the cantonal tax law, but set their communal tax rates.
Direct federal tax for single taxpayers can range from 0 to 11.5% depending on their income level. Married and single taxpayers with minor children pay 0 to 13% taxes dependent on income.
Zurich cantonal tax on income ranges from 0 to 13% for both married and single taxpayers with or without children.
Individuals are also required to pay 6.88% in social security contributions.
Termination of employment
In Switzerland, employment can be terminated without penalty by either party if statutory notice periods are honoured.
Severance payments are only applied to employees over the age of 50, when they have worked for more than 20 years for the same employer. Then, the standard minimum severance payment is equal to two months’ salary.
Start hiring employees in
Switzerland
Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast.
We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities.
With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.
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