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Employing in Switzerland

At a glance

Employment in Switzerland

Foreign companies that employ workers in Switzerland face several challenges and must adhere to the legal and regulatory framework that is in place. Most notably there are restrictions depending on whether the workers are a part of the EU Schengen areas. In some cases, using an outsourced employer will make the process smoother, and it is recommended to use professional legal services as well. Our guide explains Swiss policies on leave, termination and payment of benefits.

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Payroll & Tax in Switzerland

Complying with local payroll and tax requirements is essential for a company doing business in Switzerland. There are specific rules for payroll and taxation in Switzerland, depending upon whether your company employs foreign nationals, EU members or local Swiss employees. Issues such as tax rates and withholding and social security are all essential in ensuring a seamless human resources operation. Many companies will consider outsourcing these administrative tasks to a GEO (Global Employment Organization).

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Immigration / Work Permits in Switzerland

Foreign workers are required to have the proper visas and work permits in Switzerland, as established by immigration laws. This often requires incorporation and licensing prior to sponsoring work permits for employees, which can be a problem if your company is trying to enter the country quickly. In any case, especially for non-Europeans, requirements for working and living in Switzerland will generally require a residence permit and application for permission to work.

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Incorporation

There are several business structures available for incorporation in Switzerland, and each has advantages and disadvantages. In some cases it will depend upon the type of industry that you are in, and the scope of planned business activity. Our guide has a comparison of the time and cost for incorporating standard company structures including Liaison Office, Branch Office and Subsidiary Company.

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GEO Solutions or DIY Employment in Switzerland?

Companies entering Switzerland must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Switzerland Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Swiss entity established that can run payroll.

A DIY approach will typically be delayed until there is a properly incorporated Branch Office or Subsidiary ready to run payroll and will include the cost of registered capital. The Shield GEO Solution is already properly incorporated in Switzerland, it has an active payroll and it is setup to sponsor work permits. This greatly reduces deployment times. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Shield GEO

Shield GEO provides a fully outsourced employment service in Switzerland. Companies expanding into Switzerland can contract with Shield GEO to employ and payroll their staff on their behalf in Switzerland. Shield GEO then assumes the legal responsibility for these employees, becoming the Employer of Record, sponsoring them on work permits, complying with local employment law and running their monthly payroll.

Using Shield GEO Employer of Record Services in Switzerland

Payroll Switzerland
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Switzerland is a complicated environment for running payroll due to the three tiered tax structure and the variety of social securities / insurances. The regulations will be influenced by the canton in which an employee is registered.

 
Grossed income Tax Rate (%)
CHF 0-28299 0%
CHF 28300-50899 1%
CHF 50900-58399 2%
CHF 58400-75299 3%
CHF 75300-90299 4%
CHF 90300-103399 5%
CHF 103400-114699 6%
CHF 114700-124199 7%
CHF 124200-131699 8%
CHF 131700-137299 9%
CHF 137300-141199 10%
CHF 141200-143099 11%
CHF 143100-144999 12%
CHF 145000-895800 13%
CHF 895900+ 11.5%

For a taxable income of more than CHF 895,900 a rate of 11.5% will apply to the entire amount.

Tax Returns Supplied

Yes

Employers Social Security and statutory contributions

Contributions are split equally between employer and employee.

Employer social security can differ from Canton to Canton but as of May 2015; AHV/IV/EO-Abzug – 5.15% (paid on the full salary) ALV 1 – 1.10% (Paid on the first 10.5k)

ALV 2 – 0.50% (Paid on anything over 10.5k in the month)

NBU – 0.99% (Paid on the full salary)

BVG  2.07%

Employers must match employee’s pension contributions.

Employees Social Security and statutory contributions

Employees make equal social security contributions to employers.

Employee social security can differ from Canton to Canton but as of May 2015; AHV/IV/EO-Abzug – 5.15% (paid on the full salary) ALV 1 – 1.10% (Paid on the first 10.5k)

ALV 2 – 0.50% (Paid on anything over 10.5k in the month)

NBU – 0.99% (Paid on the full salary)

BVG  2.07%

Employees pension contributions are matched by their employer.

Insurance requirements

Private Health Insurance is required

Corporate Income Tax Rate

Federal CIT: 8.5% on profit after tax. There are also CIT’s applied at the cantonal and communal level. Depending on where the company is resident in Switzerland the overall CIT rate can range between about 11.5% to 24.2%.

Payroll Tax

N/A

Withholding Tax

8%

Work Permits
Can Sponsor Work

Shield GEO is only able to sponsor EU nationals on B permits. B permits are for EU nationals with employment contracts valid for more than 12 months; who have the means to live in Switzerland without employment. The permit is valid for five years, and is renewable for another five. As the Employer of Record, Shield GEO handles all of the formalities and employment requirements in Switzerland. The client maintains responsibility for day to day employee management.

Work Permit cost

USD 3000

Work Permit processing time

4-6 weeks but the employee can commence work immediately whilst the B permit is being processed.

Work Permit process

Shield GEO applies through the local Canton that the employee is living and working in.Documentation required : employment contract, passport photos, marriage certificate (if relevant), CV, proof of local address, passport copies.

Can Work Permit be processed in country

Yes

Switch Business Visa to Work Permit?

Not relevant, as those qualified to apply don’t require a Business Visa.

Can Spouse work on dependent visa?

Yes

Business Visas
Can do Business Visa

No

Business Visa Cost

N/A

Business Visa processing time

N/A

Others
Can supply private health care

Yes

Can assist opening bank accounts

Yes

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