Easily manage employment in Switzerland

Payroll services in Switzerland

Switzerland has a strong economy with key industries in banking, pharmaceuticals, and manufacturing. With specific labor laws and tax regulations, employers in Switzerland must ensure compliance with local payroll requirements, including social security contributions, employment contracts, and tax obligations. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in Switzerland

Employers in Switzerland must adhere to national payroll regulations regarding wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

• Minimum wage: Switzerland does not have a nationwide statutory minimum wage; wages are determined by collective agreements or cantonal regulations.
• Payroll frequency: Salaries are generally paid monthly.
• Standard working hours: The normal workweek in Switzerland is 42 hours, typically spread over five days.
• Overtime: Employees are entitled to additional pay for overtime work, usually regulated by employment contracts and collective agreements.

Taxation and social security contributions

• Personal income tax: Switzerland has a progressive income tax system, with federal rates ranging from 0% to 11.5% and additional cantonal and municipal taxes.
• Employer contributions:
• Social security (AHV/IV/EO): Approximately 5.3% of the gross salary.
• Unemployment insurance: 1.1% of the gross salary.
• Pension fund contributions: Varies based on occupational pension schemes.
• Employee contributions:
• Social security (AHV/IV/EO): Approximately 5.3% of the gross salary.
• Unemployment insurance: 1.1% of the gross salary.
• Pension fund contributions: Varies based on pension schemes.
• Corporate tax: The corporate income tax rate in Switzerland varies by canton but generally ranges from 12% to 25%.
• Tax reporting: Employers must file payroll taxes and contributions with the Swiss Federal Tax Administration and respective cantonal authorities regularly.

Payroll compliance in Switzerland

• Employment contracts must be provided in writing and specify terms such as salary, working hours, and job responsibilities.
• Payroll deductions: Employers must ensure accurate deductions for social security, pension contributions, and income tax.
• Employers must stay updated on changes to Switzerland’s labor laws and tax regulations to avoid penalties.

Run payroll in Switzerland with Remote

Managing payroll in Switzerland requires careful attention to tax regulations, employment laws, and social security requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.