Companies that do business in Switzerland can face challenges when it comes to managing payroll, taxes, and compliance for their employees. Switzerland has 26 member states called Cantons, each with their own legislature, constitution and court system. Tax reforms prevent cantons from lowering the tax rate of foreign companies, and provides additional federal tax that cantons currently receive.

Payroll and Tax Considerations

  • There is no set minimum wage but some cantons have a set minimum wage
  • Overtime working hours may be compensated either by a rest period or with a premium of 25%
  • Severance is paid only in case of dismissal of employees above age 50 with tenure of at least 20 years
  • Residents are taxed on their worldwide income and wealth. Non-residents pay tax on income from Switzerland only
  • Federal tax rates are progressive from .77%-11.5%
  • Taxes are also paid at the canton and municipal level, with varying rates by canton
  • Federal corporate taxes must be paid each year on March 1st, and the financial year is most often based on calendar year unless company requests otherwise

HR and Statutory Requirements

  • Employees are entitled to 4 weeks of annual leave after the first year of service
  • Employees are entitled to full pay during sick leave if they have worked for more than 3 months. Sick leave varies by canton, and employees must submit a medical certificate to their employer after 3 days of illness to receive the benefit
  • Minimum maternity leave is 14 weeks from the date of birth
  • There are 10 days of available paternity leave for employees and must be taken within the first 6 months
  • Notice of termination provided to an employee varies based on years of service. It can range from 7 days during probation to 3 months with more than 10 years of service
  • For pension plans, both employees and employers are required to pay contributions. Employee contributions are deducted directly from salary
  • Switzerland is part of the Schengen Agreement. Citizens of the European Union and European Free Trade Association have the right to enter, live, and work in Switzerland without additional permits or visas

Blue Marble simplifies doing business in Switzerland with cloud-based payroll, customized monthly reporting, and in-country experts to help when questions come up. You can focus on your business and ensure compliance with payroll and tax requirements with our easy-to-use technology. If you would like to simplify payroll and HR compliance in Switzerland, talk to us today!