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Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
Switzerland map

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Mercans offers complete payroll, PEO and HR services in Switzerland

Switzerland is not a member of the European Union but participates in a number of European arrangements and maintains a highly international business environment. Swiss employers operate in a stable political, economic and financial system, while English is widely used in business alongside the country’s official languages of German, French, Italian and Romansh.

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Doing Business in Switzerland

Zurich remains a major centre for international business and commerce, while Switzerland overall offers stable political, economic and financial framework conditions combined with a high standard of living, strong infrastructure and a highly skilled workforce.

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 generally open from Monday to Friday during standard business hours, with branch hours varying by institution.

Working Week

The standard working week is usually between 40 and 42 hours, depending on the employer, sector and collective agreement.

Labor Law

Swiss employment law is primarily governed by the Code of Obligations and the Labour Act. Citizens of EU/EFTA states benefit from facilitated mobility rules, while separate rules apply to UK nationals and other third-country nationals.

Main Industries

Banking, finance, pharmaceuticals, machinery, chemicals, insurance, watchmaking and agriculture

GDP Growth

1.4%

Dates & Numbers

dd/mm/yyyy

Official State Name

Swiss Confederation

Population

9.124 million

Capital

Bern

Major Languages

German, French, Italian, Romansh

Currency

Swiss Franc

Internet Domain

.ch

International Dialing Code

+41

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Switzerland
Bern, CH
5:11 pm, May 3, 2026
17°C
broken clouds
74 %
Wind Gust: 2 mph
Clouds: 75%
Sunrise: 6:11 am
Sunset: 8:42 pm

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Payroll

Companies operating payroll in Switzerland should note that there is no general national statutory minimum wage. However, some cantons have introduced minimum wage rules and collective employment agreements may also set binding wage floors.

It is acceptable to provide employees with online pay slips

Payslip

Payroll Reports must generally be kept for 10 years

Reports

20 days

Annual Leave

At least 3 weeks fully paid in the first year if no daily sickness insurance applies, with longer periods based on service and region

Sick Leave

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

Maternity & Paternity Leave

7 days during probation, then 1 month in the first year, 2 months from years 2 to 9, and 3 months thereafter unless otherwise agreed

Employee Termination

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

13th Salary

No general national minimum wage

Minimum Wage

The employee shall generally receive a remuneration of 25% more than their normal hourly rate where overtime pay is due

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, unless equivalent occupational benefits apply

Severance Pay

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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. Switzerland levies taxes at federal, cantonal and communal levels, and its social insurance network offers broad protection against a range of risks for people living and working in the country.

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. Corporate income taxation also varies significantly by canton and municipality.

≤ 21%

Corporate Income Tax

Varies

Personal Income Tax

8.1%

Sales Tax

8.1%

VAT

Social Security

Switzerland’s social security system is divided into several areas including old age, survivors’ and invalidity insurance, protection against illness and accidents, income compensation, unemployment insurance, and family allowances.

12.8%

Social Security Rate

6.4%

Social Security Rate for Employers

6.4%

Social Security Rate for Employees

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Employment Law

Working in Switzerland brings an individual into the Swiss social insurance system. Not all contributions are deducted from an individual’s salary, and health insurance is compulsory but generally arranged privately by the individual.

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 end date must be specified. While contracts are generally concluded in writing, oral contracts are valid in principle.

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 is asked to work overtime, such overtime must be necessary and daily rest periods must be respected. The duration of the probation period varies depending on the contract and applicable rules.

Leaves

In Switzerland, all workers are entitled to at least four weeks’ holidays per year, and workers under the age of 20 are entitled to at least five weeks. Time off can also be granted for certain personal events depending on law, policy or contract.

Employment termination

Any termination of the employment relationship should be communicated clearly and the applicable notice period must be respected. Employees are also protected against dismissal during certain blocked periods, including where they are unable to work due to illness or accident for a limited statutory period.

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7 days

Minimum notice period for terminating an employee

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varies

Total number of public holidays

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40-42

Working hours per week

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No entitlement

Total number of days for Compassionate & Bereavement Leave

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Immigration

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 EU/EFTA states benefit from facilitated rules, while qualified non-EU/EFTA nationals are subject to stricter admission requirements and quotas.

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Residency Permits

Citizens of the EU/EFTA can generally live and work in Switzerland under the applicable mobility arrangements. Third-country nationals generally need prior work authorisation and a residence permit, and only qualified professionals may normally be admitted for employment.

Work Permit validity

Often 12 months for an initial permit, depending on the permit category

Required Documents

A valid passport

Applicable visa where required

Employment or business documentation relevant to the work permit application

Evidence of financial support where applicable

Letter from employer or host company where applicable

Any additional cantonal or federal documents required for the permit category

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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    FAQs

    What is an Employer of Record (EOR) in Switzerland and how does it work for foreign companies?

    An Employer of Record in Switzerland allows international companies to hire and manage employees locally without setting up a Swiss legal entity. The EOR serves as the legal employer, handling employment contracts, payroll, taxes, and compliance with Swiss labor and social security regulations.

    Why should businesses use an EOR instead of establishing a legal entity in Switzerland?

    Partnering with an EOR enables companies to enter the Swiss market quickly and efficiently. It removes the need for entity formation, minimizes administrative costs, and ensures full compliance with local employment, payroll, and tax obligations.

    How does payroll outsourcing in Switzerland ensure compliance with tax and labor laws?

    Mercans’ payroll outsourcing in Switzerland ensures precise salary payments, accurate income tax withholdings, and statutory social insurance contributions. All payroll operations follow Swiss labor laws and reporting requirements, maintaining full legal and financial compliance.

    Can an Employer of Record in Switzerland hire employees and manage work permits for international companies?

    Yes. An EOR in Switzerland can hire both Swiss nationals and expatriates, manage employment contracts, and handle work permit and visa processes in accordance with Swiss immigration and employment legislation.

    What are the main benefits of using EOR and payroll services in Switzerland for global expansion?

    The main benefits include rapid market entry, reduced administrative burden, full compliance with Swiss tax and labor laws, access to local HR and payroll expertise, and flexible workforce management without setting up a legal entity.

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