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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.

Banking

Banks are open from Monday to Friday 8:30 am to 4:30 pm.

Working Week

The standard working week is 40 hours per week usually worked from Monday to Friday

Labor Law

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.

Main Industries

Banking, finance and agriculture

GDP Growth

1.80%

Dates & Numbers

dd/mm/yyyy

Official State Name

Swiss Confederation

Population

8.637 million

Capital

Bern

Major Languages

German, French, Italian

Currency

Swiss Franc

Internet Domain

.ch

International Dialing Code

+41

Switzerland
Bern, CH
5:56 am, July 6, 2022
13°C
clear sky

Payroll

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

Payslip

Payroll Reports must be kept for 10 years

Reports

20 days

Annual Leave

3 weeks fully paid

Sick Leave

14 weeks of paid maternity leave and 2 weeks of paid paternity leave

Maternity & Paternity Leave

On provision of seven days notice prior

Employee Termination

The 13th salary isn’t compulsory but common and usually found in the employment agreement

13th Salary

-

Minimum Wage

The employee shall receive a remuneration of 25% more than their normal hourly rate

Overtime

An employee is entitled to a severance payment if they are over 50 years old and have provided 20 or more years of service.

Severance Pay

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.

Tax

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.

11.9-21.6%

Corporate Income Tax

40%

Personal Income Tax

7.7%

Sales Tax

7.7%

VAT

Social Security

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.

12.8%

Social Security Rate

6.4%

Social Security Rate for Employers

6.4%

Social Security Rate for Employees

Employment Law

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.

Employment Agreement

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.

Working condition

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.

Leaves

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.

Employment termination

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

5 Days

Total number of public holidays

40-42

Working hours per week

20 days

Total number of days for Compassionate & Bereavement Leave

Immigration

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.

Residency Permits

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

12 months

Required Documents

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

Compliant, reliable, error-free and touchless payroll in Switzerland

Build the best team and hire top talent compliantly in Switzerland. Get in touch with Switzerland payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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