Switzerland Payroll Guide
HR & Payroll in Switzerland
Good to know
- Local currency: Swiss Francs (CHF)
- Minimum wage: There is no federal minimum salary. A minimum salary may be imposed depending on the canton, the collective agreement and the business sector. Since January 1, 2025, the minimum wage in Geneva is 24,48 CHF per hour.
- Salary Payment: The monthly over 12 or 13 months
- Salary Calculation: gross to net
- Legal Working Hours: 42 hours/week (may vary according to collective agreements and business sector)
About Switzerland
Located in the heart of Europe, Switzerland has one of the strongest economies in the world. The country is divided into 26 Cantons. Switzerland has four official languages: German (63%), French (23%), Italian (8%), and Romansh (less than 1%).
Switzerland benefits from a modern market economy stabilized, by a transparent legal system, a sound regulatory regime, a highly skilled labor force, exceptionally well-developed communication’s infrastructure, efficient capital markets, and low corporate taxes. However, the management of payroll and HR can be quite complicated because of the autonomy of the 26 cantons that deal with taxes, wages and have different collective labor agreements. Ensuring you are compliant with all these legislations is time-consuming. NOVATIVE SA head office is based in Switzerland, so we know these processes inside out. Entrust your HR and Payroll with true native experts.
Income Tax
Income taxes are levied at three levels: Federal, Canton, Municipal. The federal level is the same all over Switzerland. The cantonal level which is the same within a specific canton and is based on the canton’s tax. Switzerland has 26 cantons, and therefore 26 types of deductions that vary according to personal status (married, single, children). Each canton has five to six tax deduction tables, more than 100 for all of Switzerland. Municipal level, municipalities follow the cantonal tax law.
For non-Swiss employees, with a C permit or married to a Swiss national, taxes are deducted at source. To do this, the employer must keep to the cantonal deduction tables, and, produce a certificate (not mandatory in all cantons) and a salary certificate to the tax office. Each year, employers must provide a salary certificate to all employees.
Follow this link for more information: https://www.estv.admin.ch/estv/fr/accueil/impot-federal-direct/impot-a-la-source/baremes-cantonaux.html
Swiss Social Security
Switzerland has compulsory social insurance to access the Swiss social security system, in exchange for certain benefits. The Swiss social security system is divided into several areas:
Old-age and survivors’ insurance (AVS)
Military and maternity allowance for loss of earnings (APG)
Disability insurance
Unemployment insurance and family allowances which are paid by employers except for the canton of Valais where employees also contribute.
Accident insurance and pension fund (LPP) which have a legal minimum rate they can vary according to individual company policies.
Health insurance is paid privately by the employee. The employer can contribute to the loss of health insurance, which provides a long-term salary in case of illness, but this is not mandatory.
Federal Fixed Rates
| Contributions | Salary | Employer |
|---|---|---|
| Old-age and survivors’ insurance (AVS) | 4.35% | 4.35% |
| Disability Insurance | 0.7% | 0.7% |
| Allowances for loss of earnings (APG) military and maternity | 0.25% | 0.25% |
| Unemployment Insurance (UI) Up to 148,200 per year | 1.10% | 1.10% |
| Unemployment insurance solidarity (AC solidarity) From 148’201 per year | 0.50% | 0.50% |
Source : https://www.avscvci.ch
Cantonal Variable Rates
| Cantonal Variable Rates, | Contribution Amount | |
|---|---|---|
| Contributions | Salary | Employer |
| Cantonale family allowance (AF)*change regarding “canton” | Only canton Valais (0.3%) | From 0.7 to 3.5%* |
| Taxes at source, | Cantonal variant, tables deductions |
Variable Rates
| Cantonal Variable Rates, | Contribution Amount | |
|---|---|---|
| Contributions | Salary | Employer |
| Supplementary Retirement (LPP) Variable rates according to age and additional coverage by the employer | 3.5% – 9% | 3.5 – 13.5% |
| Loss of health insurance (not compulsory) At least 50% paid by the employer | According company plan | According company plan |
| Occupational Accidents (AP) | 0.0% | 0.2% to 1.0% |
| Non-occupational accidents (ANP) The distribution is at the employer’s discretion | 0.5% to 1.4% | 0.0% |
Payment Standards in Switzerland
The ISO20022 standard was implemented to create more efficient transactions between banks in Switzerland. This standard includes DTA/OPAE transfer procedures, the structure of IBANs, direct debits / LSV, payment slips, notifications and statements of account. Novative pay Swiss salaries from our own standardized Nova Payroll software ISO20022.
Our HR & Payroll Experts are Ready to Help
Payroll and HR are different in each country and to each business. Trust one of our local experts to ensure your company’s compliance in Switzerland.
Our Payroll and HR services in Switzerland
- Implementation and testing of the software
- An understanding of your individual business payroll processes
- Online payslips & payments
- A dedicated payroll expert
- Data entry & processing
- Payslip distribution
- Personnel & document production
- Legislation compliance
- Highly secure