Is a 13th salary mandatory in Switzerland?

No law requires it, but it’s common, and once the contract includes it, it’s binding. A 13th salary is usually paid in December or split between mid-year and year-end. Quote salaries as annual figures to avoid confusion.

What are employer social security costs in Switzerland?

Employers pay 5.3% for AHV/IV/EO, 1.1% for unemployment insurance up to CHF 148,200, plus family allowances and accident insurance. Together that’s about 6.9%–12.9% of salary, before the occupational pension, which often adds the most.

Can Good Balance Global hire in Switzerland for my company?

Yes. As your Employer of Record (EOR), we register the employee with the compensation fund, set up BVG pension and accident cover, and handle withholding tax where it applies. For non-EU/EFTA hires, permits are limited by quotas, so plan extra time.

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Payroll and benefits guide

Switzerland

CapitalBern

Fiscal Year1 January - 31 December

Date Formatdd/mm/yyyy

CurrencyCHF (Swiss Franc)

Payroll FrequencyMonthly

Employer Taxes6.87% – 12.9% + BVG pension

Employee Costs7.4% – 10.4% + BVG pension

Overview

Languages: German, French, Italian
Income tax: up to 11.5% federal, plus cantonal tax
VAT: 8.1%; Reduced rates: 3.8%, 2.6%. 3.8% for accommodation; 2.6% for basic goods such as food and medicines

Contributions

Employer

5.3%

Old-age, survivors’, and disability insurance (AHV/IV/EO)No cap; compensation funds also charge an administrative fee

1.1%

Unemployment insurance (ALV)On pay up to CHF 148,200/year

0.3% – 3.5%

Family compensation fundVaries by canton and fund

0.17% – 3%

Occupational accident insuranceVaries by risk; on pay up to CHF 148,200/year

Varies

Occupational pension (BVG)Age-related rates on the coordinated salary; the employer pays at least half

6.87% – 12.9% + BVG pension

Total employer cost

Employee

5.3%

Old-age, survivors’, and disability insurance (AHV/IV/EO)No cap

1.1%

Unemployment insurance (ALV)On pay up to CHF 148,200/year

1% – 4%

Non-occupational accident insuranceUsually paid by the employee; on pay up to CHF 148,200/year

Varies

Occupational pension (BVG)Usually half of the plan contribution

7.4% – 10.4% + BVG pension

Total employee cost

Authority Payments

Authority PaymentPaid ToDue DateMethod

Authority Payment

Cantonal or professional compensation fund (Ausgleichskasse)

Paid To

AHV/IV/EO, ALV, and family allowance contributions

Due Date

Monthly or quarterly advance payments, with an annual reconciliation

Method

Payroll declaration and bank transfer

Authority Payment

Cantonal tax office

Paid To

Withholding tax (Quellensteuer) for foreign employees without a C permit

Due Date

Within the deadline set by the canton, usually monthly

Method

Electronic withholding tax return and bank transfer

Minimum Wage & Working Hours

Minimum wage: None / —; No federal minimum wage; some cantons, including Geneva, Neuchâtel, Jura, Ticino, and Basel-City, set their own, and sector agreements set others
Standard working hours: Usually 40–42 hours per week; Legal maximum of 45 hours per week for office, technical, and industrial staff and 50 hours for others
Overtime: Overtime is paid with a 25% premium unless the contract says otherwise or time off is given

Leave

Annual leave4 weeks5 weeks for employees under 20
Sick leaveLimited period set by length of serviceUnder the Code of Obligations, pay continues for at least 3 weeks in year 1, then longer based on cantonal scales. Many employers use daily sickness insurance instead, typically paying 80% for up to 720 days
Maternity leave14 weeksPaid at 80% of earnings, up to a daily maximum, through the income compensation scheme (EO)
Paternity leave2 weeksPaid at 80% through the EO, within 6 months of birth
Public holidays1 federal holiday (1 August)Cantons set their own additional holidays

Leave type	Duration	Notes
Annual leave	4 weeks	5 weeks for employees under 20
Sick leave	Limited period set by length of service	Under the Code of Obligations, pay continues for at least 3 weeks in year 1, then longer based on cantonal scales. Many employers use daily sickness insurance instead, typically paying 80% for up to 720 days
Maternity leave	14 weeks	Paid at 80% of earnings, up to a daily maximum, through the income compensation scheme (EO)
Paternity leave	2 weeks	Paid at 80% through the EO, within 6 months of birth
Public holidays	1 federal holiday (1 August)	Cantons set their own additional holidays

Termination

Probation period: 1 month by default, up to 3 months
Notice period: 7 days during probation; 1 month in year 1, 2 months in years 2–9, 3 months after that
Severance pay: Generally not required; employees aged 50+ with 20+ years of service are entitled to severance of 2–8 months’ pay, which pension benefits can offset
13th salary: Not mandatory, but very common; it becomes binding once agreed in the contract
Notes: Dismissals during illness, military service, or pregnancy are restricted

Benefits

Occupational pension (BVG)Mandatory
Mandatory for employees earning above the BVG threshold
Accident insuranceMandatory
Occupational and non-occupational accident cover
Daily sickness insuranceCommon
Replaces 80% of pay during long illness

Visas & Work Permits

L or B permit for non-EU/EFTA nationals
Requirements
Qualified role, salary at local standards, and proof that no suitable Swiss or EU/EFTA candidate is available
Subject to annual quotas; cantonal and federal approval required
EU/EFTA permit under free movement
Requirements
Employment contract; registration with the canton

FAQ

Sources

Last updated: November 1, 2026

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