Payroll in Switzerland

Swiss law sets the default pay period at the end of each month. A shorter period or other payment terms apply only if they have been agreed, are customary, or follow the applicable standard or collective employment contract. Monthly payroll is the normal pattern.

Payday and payslips

Put the payday, payroll cutoff, deductions and expense process in writing with the employee and with any provider that runs payroll for you. The employer must give a written pay statement. Show salary, supplements, each deduction and any expense reimbursement on their own lines.

For an indefinite contract, or one lasting more than a month, the employer must also give written information within one month of the start. It covers the parties, start date, role, salary and supplements, and weekly hours. Changes to those particulars must be provided within a month.

Thirteenth-month and other special payments

A thirteenth salary is not a universal Swiss statutory entitlement, although the dossier records it as customary. Check the contract and any collective agreement. An agreed salary instalment is different from a discretionary bonus, and the Code of Obligations governs when a special payment is owed and when a proportional payment is due at termination. State the annual gross salary and the number of payments clearly, so an extra payment is neither left out nor counted twice.

Remitting contributions and tax

For ordinary covered employees in 2026, employer and employee each pay 5.3% for old-age, disability and income-compensation insurance, with no salary ceiling. Each also pays 1.1% unemployment insurance on salary up to CHF 148,200 a year, or CHF 12,350 a month. That gives 6.4% each below the ceiling. It excludes occupational pension, accident insurance, family-fund charges and administration.

Do not assume one payment covers everything. Payroll must remit to the relevant compensation office, pension institution and accident insurer. Family-fund financing depends on the canton and compensation fund. For income tax, there is no single flat employee rate. Tax at source generally applies to foreign residents without a C settlement permit, and you apply the current canton's payroll tariff. The dossier does not give remittance deadlines, so confirm them with each body before your first pay run.

Working time rules that affect pay

The Labour Act weekly maximum is 45 hours for industrial, office, technical and specified other staff, and 50 hours for other covered workers. The agreed week can be shorter, so these are ceilings, not a standard contract. Check the applicable collective agreement.

Work beyond agreed hours is paid at salary plus at least 25% by default, unless valid written or collective terms vary it. Equivalent time off needs agreement. Temporary night work normally attracts at least 25% additional pay, and temporary Sunday work attracts 50%. There is no universal Saturday premium.

Monthly salaries are generally not reduced for a public holiday. Annual leave carries full salary and generally cannot be replaced with cash during employment. Retain working-time records for at least five years, and agree who records hours and approves extra work.

Switzerland has no single national income tax rate for employees. Income tax depends on federal, cantonal and communal rules and on the person's circumstances, so a flat percentage is misleading and this guide does not quote one as a payroll rate.

How income tax is collected

Employees who are foreign residents without a C settlement permit are generally taxed at source. Your payroll withholds the tax each pay period and remits it. Exceptions exist, for example an unseparated marriage to a Swiss citizen or a C-permit holder resident in Switzerland. Workers who live abroad have separate source-tax and treaty rules.

The withholding amount comes from the payroll tariff of the canton that applies to the employee, together with personal details. Use the current tariff for that canton and re-check it when the employee's circumstances or canton change.

Income tax bands

The dossier for this guide gives no band table for Swiss employee income tax. One OECD reference figure of 11.65% exists, but it is a single illustrative rate and not a band you can apply to a payslip. For actual deductions, check the cantonal source-tax tariff. The dossier also gives no allowances or credits for income tax, so check the canton's rules for any deductions that apply to the employee.

Employee social deductions

These are separate from income tax. For ordinary covered employees in 2026, the employee pays 5.3% for old-age, disability and income-compensation insurance, with no salary ceiling. The employee also pays 1.1% for unemployment insurance on salary up to CHF 148,200 a year, or CHF 12,350 a month. Together that is 6.4% below the ceiling. The employer pays the same rates.

The 6.4% excludes occupational pension, accident insurance, family-fund charges and administration. Special coverage and age rules can change the calculation.

Other deductions to check

• Occupational pension: mandatory coverage generally starts when annual salary from the same employer exceeds CHF 22,680. Plan costs vary, so ask for the actual insured salary and plan rather than assuming one percentage.
• Accident insurance: the employer pays occupational accident premiums. Non-occupational premiums are generally borne by the employee.
• Health insurance: compulsory health-care premiums are paid by the insured individual. This is not a 50/50 payroll contribution.
• Family funds: employee contributions are not generally charged, but Valais has an employee contribution.

Remit contributions to the relevant compensation office, pension institution and accident insurer. One tax-office payment does not cover everything.

Business taxes are a separate matter

The federal corporate profit-tax rate is 8.5%, with cantonal and communal taxes in addition, so there is no single combined national company-tax rate. The standard VAT rate is 8.1%. These are business and transaction taxes and are not taken out of an employee's salary.

What Swiss employer contributions cover

For an ordinary covered employee in 2026, the employer pays 6.4% of salary in the two statutory schemes that apply to nearly every hire: old-age, disability and income-compensation insurance, and unemployment insurance. The employee pays the same share, withheld from pay. Occupational pension, accident insurance, family-fund charges and administration costs come on top of this.

Employer and employee rates

The 6.4% total applies below the unemployment ceiling. Special coverage and age rules can change the calculation, so confirm the position for each employee.

Ceilings and thresholds

Old-age, disability and income-compensation contributions have no salary ceiling. Unemployment insurance applies to salary up to CHF 148,200 a year, which is CHF 12,350 a month. The same CHF 148,200 is the 2026 maximum insured salary for accident insurance.

Occupational pension has its own thresholds. Mandatory coverage generally starts when annual salary from the same employer exceeds CHF 22,680. In 2026 the standard coordination deduction is CHF 26,460 and the upper salary limit is CHF 90,720. Risk coverage starts after age 17 and old-age savings after age 24.

What is not included in the 6.4%

• Occupational pension. Plan costs vary, and the employer's total contributions must at least match the employees' total contributions. Ask for the actual insured salary and plan rather than using one payroll percentage.
• Accident insurance. The employer pays occupational accident premiums. Non-occupational premiums are generally borne by the employee. Premiums depend on the insurer and the risk.
• Family-fund contributions. Financing depends on the canton and compensation fund. Employees are not generally charged, but Valais has an employee contribution. Administration charges need their own allowance.
• Health insurance. Compulsory health-care insurance is paid through premiums by insured individuals. It is not a 50/50 payroll contribution.

Payroll must remit contributions to the relevant compensation office, pension institution and accident insurer. One payment to a tax office does not cover everything.

Worked cost example

Take an ordinary covered employee on CHF 8,000 gross a month over 12 payments, so CHF 96,000 a year. The old-age, disability and income-compensation contribution at 5.3% adds CHF 424 a month. Unemployment insurance at 1.1% adds CHF 88 a month.

This subtotal is not an all-inclusive quote. Pension, accident insurance, family-fund and administration charges, agreed benefits, expenses, any provider fees and invoice taxes are all additional.

Annual leave

Employees are entitled to at least four weeks of annual leave per year of service, or five weeks while under age 20. Contracts and collective agreements can provide more. The entitlement is set in weeks, not days. Part-time employees keep the same number of weeks, and the number of days depends on their working pattern. For an incomplete year, entitlement is proportional.

Leave carries full salary. During employment it generally cannot be replaced with a cash payment. For irregular part-time work, a narrow arrangement can include holiday pay in the hourly rate, but the contract and each payslip must show it separately. Do not assume an hourly rate already covers leave.

The employer sets leave dates after considering the employee's wishes and business needs, and at least two weeks should be consecutive. Statutory leave does not automatically lapse on 31 December. Check carryover, any reduction and the balance owed at the end of employment against the actual facts.

Public holidays

1 August is the national public holiday. Cantons can designate up to eight other holidays as equivalent to Sundays, and their calendars differ. A holiday that falls on an ordinary day off does not automatically create a replacement day. Monthly salaries are generally not reduced for a holiday. For hourly workers, pay for holidays other than 1 August depends on the applicable agreement or terms. Confirm the calendar and pay rules for the employee's canton.

Sick pay

Without an equivalent contractual insurance arrangement, an employee unable to work through no fault of their own receives full salary, provided employment has lasted more than three months or was agreed for more than three months. The statutory minimum is three weeks in the first year of service, then a longer period under the applicable cantonal case-law scale. It is not a fixed 30-day entitlement or an automatic split between insurer and employer.

A written sickness-income insurance arrangement can replace these rules if it is equivalent. Such arrangements commonly cover 80% of salary for 720 or 730 days within 900 days, with the employer paying at least half the premiums. Check equivalence, waiting days, exclusions and what happens when employment ends. This is separate from personal health-care insurance.

The employer can ask for a medical certificate from the first day of incapacity, although contracts often set a later deadline. The certificate need not state the diagnosis.

Maternity, other parent and adoption leave

Maternity leave normally lasts 14 weeks from childbirth. The income-compensation benefit is generally 80% of prior income, capped at CHF 220 a day in 2026. The standard qualifying periods are nine months insured and five months working before birth. Check leave entitlement and benefit eligibility separately.

The qualifying other parent has two weeks of leave, equal to ten working days for a five-day week, to use within six months of birth. The benefit also replaces 80% of prior income, capped at CHF 220 a day in 2026. Check legal parenthood and eligibility. A separate extended entitlement can apply if the mother dies.

For a qualifying adoption of a child under four, eligible parents can share two weeks of leave within one year of placement, but not take it at the same time. The same 80% and CHF 220 limits apply. Stepchild adoption does not qualify.

The dossier lists no general statutory parental leave beyond these entitlements. Check the contract and any collective agreement for additional leave.

Who pays

The employer pays full salary for annual leave and, where the statutory rules apply, for sick pay. Maternity, other parent and adoption payments are income-compensation benefits, not employer-funded salary. Confirm with payroll how the benefit reaches the employee and whether any contractual top-up applies. Occupational accident premiums are paid by the employer, and non-occupational premiums are generally borne by the employee.

Swiss compliance risk concentrates in a few places: registration and permits, written terms, social insurance remittances, time records, and notice and termination rules. Switzerland has no single national payroll filing, so check which bodies apply to each hire and canton.

Registration and work permission

EU/EFTA nationals working more than three months must register within 14 days of arrival and before starting work. You need a valid identity document and employment confirmation. Employment under one year generally leads to an L permit. A contract of at least one year or indefinite duration generally leads to a five-year B permit. Workers from outside the EU/EFTA depend on qualifications, quotas, economic interest, recruitment priority and local pay conditions. A signed contract does not guarantee approval or a processing time.

Vacancies in listed occupations with unemployment of at least 5% must generally be reported to the regional employment office. A reportable vacancy normally has a five-working-day exclusivity period before external advertising. Agree who handles this before you hire.

Payments and remittances

Salary is payable at the end of each month unless other terms are agreed or customary, and the employer must give a written pay statement. For ordinary covered employees in 2026, employer and employee each pay 5.3% for old-age, disability and income-compensation insurance. Each also pays 1.1% unemployment insurance on salary up to CHF 148,200 a year. Pension, accident insurance and family-fund charges are extra. Payroll must remit to the relevant compensation office, pension institution and accident insurer. Do not assume one payment covers everything. For deadlines and forms, check with each body, as the dossier does not set them out.

Contracts and written terms

For an indefinite contract, or one lasting more than a month, give written information within one month of the start: the parties, start date, role, salary and supplements, and weekly hours. Changes must also be provided within a month. Agree location, leave, notice, insurance and expenses before the start. Probation defaults to the first month with seven days' notice and cannot exceed three months.

Records

Retain Labour Act working-time records for at least five years. A salaried office role does not automatically remove the duty. Say who records hours, breaks and leave, and who approves extra work.

Notice and termination

After probation, default notice for indefinite employment is:

Notice normally ends at month-end, and valid written or collective terms can vary it. There is no statutory dismissal procedure, and ordinary termination generally needs no particular form unless the contract requires one. The terminating party must give written reasons on request. Abusive grounds can lead to compensation of up to six months' salary, and the employee normally must object in writing by the end of notice and claim within 180 days after employment ends.

Notice during pregnancy, the 16 weeks after birth, or qualifying sickness can be void. Collective dismissal rules apply at set thresholds, and employment generally cannot end earlier than 30 days after notifying the cantonal employment office.