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. In 2019, Switzerland passed a tax reform bill with many changes affecting companies operating there beginning in 2020. One of the changes to the tax bill prevents cantons from lowering the tax rate of foreign companies, and provides additional federal tax than cantons currently receive.
Corporate tax includes a federal and canton tax based on where your business is located. Each Canton has their own tax rates, payable in installments. Federal corporate taxes must be paid each year on March 1st, and the financial year is most often based on calendar year unless companies request otherwise.
There is no federal minimum wage, but some cantons have established minimum wage rules. The standard work week is 41 hours, with a maximum of 45 hours per week. EU citizens need a work authorization to be employed in Switzerland as a foreign national. All other foreign nationals require a residence permit and work authorization. Foreign workers need a work authorization before arriving in Switzerland, and are not allowed to request as a visitor or traveler.
In accordance with the laws of Switzerland, during the first year of work, an employer will be expected to pay a maximum of 3 weeks of sick pay with a medical note from the employee. After a year of employment, the period for which a sick employee would be paid will depend on the length of service, and other conditions.
Social Security in Switzerland is contributed by employers (16-27%) and employees (14-25%) and includes disability, family allowances, retirement, unemployment insurance, and more. Employers are required to match employee contributions into pension funds as well.
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!