Do you want to hire an employee in Switzerland without a legal entity but need Swiss payroll? IPS can help you hire and pay employees in Switzerland in compliance with the law, even without a Swiss branch or permanent establishment.
There are 2 ways you can hire someone in Switzerland without a permanent establishment:
- Employer of Record (Switzerland) – this is where your employee is hired directly by us and lent to you full time. This is also known as employee leasing or staffing.
- Direct employment in your company but with payroll accounting according to Swiss law by registering your company as a foreign employer.
Both employment options have their advantages and disadvantages. Contact us to find out which one suits your project better. We will be happy to advise you and find the best solution for your company.
IPS is your global payroll solution for a successful and fast international expansion without a permanent establishment.
Remote Work Full Time from Switzerland – Information for Hiring Employees in Switzerland
To make sure you hit the ground running abroad, IPS is here as your international payroll partner to assist you in hiring your employees correctly in Switzerland and preparing Swiss payroll in accordance with the laws of the country. Below is some data to help you better understand the Swiss payroll system.
The social security system in Switzerland
In Switzerland, it is not the employer who is responsible for health insurance, but the employee. If you are an employee living in Switzerland, you must be insured according to local law (even if your employer is not in Switzerland). There is a compulsory basic social insurance in Switzerland. The amount varies depending on profession, age, marital status, etc.
If you do not have a branch in Switzerland, you will need a service like IPS’s to calculate and pay these social benefits correctly according to Swiss law. With IPS’s international payroll services in Switzerland, you ensure that your employee is accounted for in a compliant manner according to Swiss law.
Costs for the employer
In order to hire an employee in Switzerland, certain things need to be considered. In general, Switzerland is known as an expensive country, and this also affects wages. A relief for an employer may the slightly lower employer costs. The non-wage costs in relation to the gross salary in Switzerland amount to about 15% (depending on the pension fund). These low costs are due to the fact that health insurance in Switzerland is fully covered by the employee. This represents a large savings for the employer.
- Old-age and survivors’ insurance:
- Disability insurance:
- Income replacement insurance:
- Unemployment insurance:
- Pension fund:
Between 4.0% to 14.0% depending on the pension plan. This can be chosen freely.
- Occupational accident insurance:
0.77% on average, varies by industry, insurer and company risk.
- Family allowances:
0.3 to 3.63% depending on canton.
- When hiring through a Swiss employer of record agency, it must be noted that a working week in Switzerland, consists of 40 to 44 hours. Depending on the activity, a maximum working time of 45 to 50 hours applies. This varies depending on the industry. This would have to be clarified individually. Overtime must be compensated with a wage premium of at least 25%.
- There are four national holidays in Switzerland. Other holidays depend on the canton.
- There is a vacation entitlement of at least 20 working days per year.
- Continued payment of wages due to illness varies greatly and depends on the duration of employment and the circumstances. However, a minimum of three weeks of continued pay applies.
As your international payroll provider in Switzerland, we will ensure that you are equipped with the necessary information.
Probationary period / Termination
The probationary period in Switzerland is a minimum of one and a maximum of three months.
The notice period depends on the duration of the employment relationship. In the first year, termination can be given with one month’s notice; after two to nine years, the notice period is two months. There is also the possibility of a termination agreement.
A severance payment is either stipulated in the employment contract or, if it has not been stipulated beforehand, it may be agreed upon in the termination agreement
As your international payroll company in Switzerland, we ensure that your employee is employed and payrolled correctly.