Employer of Record in Switzerland
Skuad’s Switzerland EOR (Employer of Record) solution caters to your business expansion needs in Switzerland without requiring you to set up an entity. Switzerland, officially known as the Swiss Confederation, is the Federal Republic comprising 26 cantons or states. Switzerland is known to many as a tax haven as it houses some easy tax laws that help run any business. When looked at from the outside, it may seem complex, but there are many similarities in their methods with other countries.
Skuad’s strong global network and an automated human resource (HR) platform ensure the quick onboarding of remote teams, management of their payrolls, and formalization of contracts in compliance with the local laws. Learn more about Skuad’s EOR solutions and how you can leverage the assistance of an international network of experts.
Switzerland at a Glance
Population: 85.4 million people (2020)
Currency: Swiss franc (CHF)
Capital City: Bern
Languages spoken: German, French, Italian, Romansh
Gross Domestic Product (GDP): USD 747,969 billion (2020)
Employment in Switzerland
What You Must Know Before Employing in Switzerland
Switzerland is a developed country that caters well to businesses of all sizes. The benefits of starting a business in Switzerland are as follows.
- Strong economy and currency: You get to work in a strong and financially independent country.
- Head offices of many multinational corporations (MNCs): Switzerland houses many MNC offices with a vibrant business atmosphere.
- Efficient and reliable administration: The efficient workflow and processes enable hassle-free work.
- Liberal labor market: The rules are simple and workable for employers, easy to follow, and organized in a manner that makes processes run smoothly.
- Liberal tax system: Switzerland has one of the most liberal tax systems. The tax rates are low to moderate, and people can keep more of what they earn.
- Politically stable country: The country does not undergo frequent changes in rules and regulations.
The Swiss employment law is liberal compared to other European countries, primarily about terminations of employment contracts. However, to set up any legal entity or part of your business in Switzerland, a company needs to check Switzerland’s legal and operational aspects. The Switzerland legal requirements are well-structured and categorized between federal and cantonal levels. To mitigate the challenges of getting into any trouble while setting up your business entity, connect with a local expert in employment laws in Switzerland. The table below lists a few employee entitlements under employment laws.
| Entitlements
|
Explanation
|
| Statutory Working Hours |
The statutory work hours are 45 hours per week.
|
| Overtime eligibility |
The following rules apply to statutory and contractual overtime.
- A person working overtime shouldn't exceed two hours per day.
- A person working overtime should not exceed 140 hours per year for employees working 50 hours per week.
- A person working overtime should not exceed 170 hours per year for employees working 45 hours per week.
- The burden of proof rests with the employees who chose the overtime, and they must report it to the employer without delay.
- Overtime is paid at the rate of at least 25% than normal pay.
|
| Paid public holidays |
Paid public holidays are determined by Swiss cantons (states). Some of the key holidays are,
-
New Year’s Day
- Good Friday
- Easter Monday
- Ascension Day
- Whit Monday
- Swiss National Day
- Christmas Day
- St. Stephen’s Day
|
| Holiday Pay |
-
Employees get paid for annual leave, sick leave, or if they are working on public holidays.
- An employee can get four weeks of paid vacation per year.
|
| Medical leave |
An employee is provided with paid sick leave of 21 days in the first year of employment. Thye can take between one and two months off in the second year, and eight or nine weeks off in the third year.
In addition, an employee can avail of additional paid sick leave and unpaid leaves, depending on the canton.
The employees need to provide sick leave notes within three days of their absence.
|
| Maternity leave |
- A female employee is entitled to receive paid maternity leave of three months.
- The maternity leave is guaranteed as long as the person has been employed and has paid their social security contributions.
- Women can avail of 80% of their pay with leave up to 14 weeks, except in Geneva.
- In Geneva, the leave allowance is 16 weeks.
There is no concept of legal paternity leave, yet some companies do give it at their discretion.
- Some special allowances such as avoiding physical labor, night shifts, and more are entitled to new mothers to protect their health.
- All the benefits of maternity and paternity are covered in the social security scheme.
|
| Annual Leave Accrual Entitlement |
The employees get an annual paid leave depending on the duration and type of service.
| Duration of service |
Leaves |
|
Work up to 38 hours a week
|
Four-week leave per year
|
| Part-time employees
|
Pro-rata paid leave |
|
| Leave Expiry |
Leaves for the current year cannot be rolled over to the next year.
|
| Accrued Leave At Termination |
Any unused leave or annual leave is paid upon the termination of service.
|
To know more about the country’s employment policies and ensure your expansion efforts meet the legal requirements, connect with Skuad experts today.
Contractors vs. Full-Time Employees
You may have an idea about the kind of employment contract you would prefer when doing business in Switzerland. Whether contractual or full-time, both types of work agreements have their advantages and disadvantages. Hence, a decision should be made based on your business requirements. The salary should be stated in CHF for both types of contracts.
If you wish to get a temporary entity set up in Switzerland, then contractual work is the best option. Otherwise, if the business is expanding in this location, then consider hiring full-time employees.
Check out the characteristics of full-time work in Switzerland.
- A high degree of directionality
- Fixed working hours, fixed working checks, duty to appear regularly in the office
- Allocation of a workspace
- Agreement of a probationary period
- Subordination to other persons/in-charge
- Periodic remuneration
The characteristics of contractual work in Switzerland are,
- Lack of subordination
- Possibility to terminate the legal relationship as per your wish
- Limitation of the work-load
- Provision of materials and tools
Whether your organization requires contractors or full-time employees, Skuad’s EOR solution can cater to all your hiring requirements. Learn more by talking to Skuad experts.
Hiring in Switzerland
There are two main laws concerning employment in Switzerland,
- Code of Obligations (Articles 319 to 362)
- The Labor Act
In addition, there are provisions for collective bargaining under the Collective Labor Law.
Applicants apply for jobs in Switzerland through different job portals such as,
Employees are required to have their curriculum vitae/resume, cover letter, and educational certificate. The applicants are required to write the cover letter and other application details in the language as specified on the job portal by their employer.
You can take help from Skuad to hire professional talents in Switzerland by following all the Swiss work laws. Book a demo today.
Probation & Termination in Switzerland
The standard probation period in Switzerland lasts between one and three months. Once the probation period is over, the employee is entitled to benefits and other entitlements given in the contract. Although there is no protection for the employees in case of any dismissal related to illness, pregnancy, or accident. The employment contract can be terminated during probation through a seven-day notice.
Either the employee or the employer can terminate the contract. This can be due to,
- Through mutual agreement
- By either party’s initiative
- Due to the death of the employee
- After the expiry of the contract
- For other reasons that are justified
The notice period can range from one week to two months, depending on the employee’s service length.
| Type of Employment
|
Notice Period
|
| An employee on probation |
7 days
|
| Workers with up to one year of employment |
One month
|
| Workers with between two and nine years of employment |
Two months or as decided/mentioned in the contract
|
| Workers with more than 10 years of employment |
Three months
|
There are no legal severance package allowances, but it is left at the discretion of the company. Usually, most companies provide severance allowances for employees over 50 years who have worked for more than 20 years.
To know more about probation and termination in Switzerland, Book a demo with us.
EOR Solution in Switzerland
An EOR solution for Switzerland makes it beneficial and easier for businesses to expand in the country while maintaining all legal requirements. Choosing the EOR route ensures that your expansion entity is compliant with the processing of payroll and other employment responsibilities. Skuad helps you manage the contracts, work permits, taxation, monthly payroll, taxes, and visas in Switzerland for your employees.
Outsourcing Employment Through an Employer of Record
When you have decided to expand your business entity in Switzerland, you need to keep various factors in mind. When your business is scaled up in a different country, you will also have to deal with the local administrative and work laws in that country. These can be complex. Hence, it is better to hire a local payroll agency that understands the local working laws and takes care of them.
Skuad can offer tailor-made EOR solutions for all your expansion needs. To avail yourself of our services, speak to Skuad experts today.
Types of Visas In Switzerland
Anyone willing to work in Switzerland needs to get any one of these visas as per their requirements.
| Visa Category
|
Explanation
|
| L Permit |
- Available for non-EU and EU/ EFTA nationals
- Used for short term work, up to 12 months
- Restricted by quota when duration is longer than four months
- Applicants need to show they meet the educational and work experience requirements
- Apply for an entry visa before you arrive in Switzerland
|
| B Permit |
- Available for the European Union (EU) and European Free Trade Association (EFTA) and non-EU nationals
- Valid for 12 months, but is extendable
- Restricted by quota if the duration is longer than four months
- Permit applications must show the meeting of educational and work experience requirements
- Apply for an entry visa in the Swiss embassy, and the employer will obtain authorization for the work permit.
- The resident permit can be obtained from the Residents Registry office within 14 days of arrival
|
| G Permit |
- Available for workers who commute or cross-border workers
- It is available for permanent residents who have lived continuously in Switzerland for 10 years
|
| Residence Permit Eligibility |
The following are the eligibility criteria to obtain a residence permit.-
Not a prohibited immigrant
- Should have a family connection or a domestic connection
- Contributed to the social, economic, or cultural level in Switzerland
|
| Residence Permit |
- Obtain residence permits for persons of independent means
- Pay annual lump-sum tax depending on the different cantons
|
| Switzerland Transit Visa (A-Visa) |
The transit visa is issued to temporary visitors in the country for a few days waiting for transport to travel to another nation.
|
Talk to us and get more information and guidance related to types of visas and work visa requirements in Switzerland. Skuad can handle all your visa requirements and ensure the expansion process is not delayed.
Work Permit
Skuad’s local partner in Switzerland sponsors foreign workers for work permits. As a reputed EOR service in Switzerland, Skuad takes care of all the responsibilities and requirements related to work permits. The table below answers a few pertinent questions.
| Work Permits
|
Details
|
|
Can Skuad sponsor Work Permits in Switzerland? |
Yes
|
|
Processing time
|
Four to six weeks |
|
Work permit process |
Step 1: Your employer applies for your work permit at the immigration authority at the local Swiss canton.
Step 2: You apply for a work visa through the Swiss embassy.
Step 3: Once your local employer completes your work permit, you will be granted the visa.
Step 4: In addition to the visa application form, you must provide the following documents.
- Photocopy of your passport
- Proof of your job offer
- Your CV and other work and educational qualifications certificate
|
|
Work Permit validity |
12 months |
|
When can an employee travel to Switzerland? |
After issuing the visa after the successful processing of your work permit |
|
Can a Resident Visa be switched to a Work Permit? |
No |
|
What’s the cost of a Work Permit Visa? |
On average, the cost is CFH 100 |
To know more about work permits in Switzerland and how Skuad can secure them for you, speak to our experts today and kick-start your expansion.
Payroll & Taxes in Switzerland
Things You Must Know To Set Up Payroll In Switzerland
You must be aware of the rules and regulations that guide Switzerland's employment contract before opening up your business entity here. To recruit employees in Switzerland and manage their compensation and other benefits following the local labor legislation, foreign companies must set up a payroll. This can be done in one of the following four ways.
- Incorporating a separate legal entity and handling the payroll management with an in-house HR department.
- Setting up a remote payroll by adding your Georgian employees to your parent company’s payroll.
- Payroll outsourcing in Switzerland in collaboration with a local company that handles HR tasks but leaves you in charge of liabilities.
- Payroll outsourcing in Switzerland with a global EOR service such as Skuad, which can handle your payroll while ensuring total compliance with the local laws.
| Tax |
Explanation |
| Income Tax
|
| Gross income |
Tax Rate (%) |
| CHF 0 to 28299 |
0% |
| CHF 28300 to 50899 |
1% |
| CHF 50900 to 58399 |
2% |
| CHF 58400 to 75299 |
3% |
| CHF 75300 to 90299 |
4% |
| CHF 90300 to 103399 |
5% |
| CHF 103400 to 114699 |
6% |
| CHF 114700 to 124199 |
7% |
| CHF 124200 to 131699 |
8% |
| CHF 131700 to 137299 |
9% |
| CHF 137300 to 141199 |
10% |
| CHF 141200 to 143099 |
11% |
| CHF 143100 to 144999 |
12% |
| CHF 145000 to 895800 |
13% |
| Over CHF 895900 |
11.5% |
|
| Tax Returns |
Yes |
| Financial Year-End Date |
December 31 |
| Tax Documents
|
Not applicable |
| Corporate Tax
|
8.5% with additional cantonal level taxes |
| Withholding Tax (For Non-Residents)
|
8% |
| Payroll Tax
|
No payroll tax applicable |
| Sales Tax
|
8% |
| Employers Social Security and statutory contributions
|
Employers contribution: 5.275%
Employee contribution: 4.2%
|
| Public Pension
|
Between 7% to 18% |
| Medical Insurance |
Health insurance is provided to every resident in Switzerland to cover the cost of medical treatment in case something happens to you. |
Taxation and payroll processing are important parameters that businesses consider before expanding into a new region. Book a demo with Skuad for proper guidance about the critical aspects of business expansion in Switzerland.
Incorporation: How to Set Up a Subsidiary in Switzerland
Establishing a subsidiary in Switzerland and managing processes such as operations, hiring employees, and setting up payrolls may take a significant time and delay your expansion. While setting up a subsidiary in Switzerland, you need to consider factors such as the city and location of your subsidiary. A subsidiary can be a branch office, limited liability company (LLC), or an offshore company, among other options. Most of the companies go for LLC, as it is beneficial for the parent company and the subsidiary as well.
Subsidiaries are self-financing and a decentralized business model. Therefore, it becomes easier to contain and mitigate the chances of core business loss by working with subsidiaries, and you can open your business subsidiary in Switzerland. To establish a subsidiary in Switzerland,
- Step 1: Register your subsidiary: A subsidiary is registered as GmbH or AG with similar process models. It is mandatory to register with the Swiss Companies Register. At least two shareholders with a minimum deposit of CHF 20,000 in a Swiss account can form GmbH. Also, the director needs to be a Swiss resident. In the case of AG, the minimum share capital is CHF 100,000.
- Step 2: Documentation: After the deposits are made in the Swiss account, the association articles should be drafted in front of the notary. The next process is to deposit the notarized articles of association and incorporate the company and bank certificate into the registry. Finally, you can register for VAT.
Why bother getting into the nitty-gritty of subsidiary incorporation when Skuad can do it for you? Know more about our customized solutions now!
Professional Employer Organization (PEO)
A professional employer organization (PEO) collaborates with medium- and small-sized organizations to provide HR services. A PEO handles various HR services such as recruitment, payroll, training, and other HR tasks. An EOR also provides similar HR services; however, the difference lies in the arrangement or association between the outsourcing company and the business.
A PEO acts as your co-employer, whereas an EOR service acts as the legal employer of your employees. The latter assumes all the responsibilities and liabilities of your remote team. You can outsource a specific HR function or end-to-end activities.
Further, an EOR service allows you to expand your workforce without setting up a business entity. It handles payroll funding, worker’s compensation, and unemployment claims and reports. It files taxes under its file ID number.
Skuad can help you with both EOR and PEO services. Our team of experts handles all HR-related services with efficiency and dedication. We strive to understand your needs and end-goal to help grow and expand your business. Our bespoke services will save you precious time and money. Book a demo with Skuad experts to know more about our EOR solution for Switzerland.
Conclusion: What Gives Skuad’s Switzerland Solutions an Edge?
Businesses looking to expand their workforce in promising regions may find Switzerland an attractive destination especially if you have an EOR service such as Skuad as a partner. Its one-of-a-kind EOR solution lets you streamline and expedite your global expansion process.
Skuad has an extensive network in 150+ countries across the globe and provides a single interface to onboard and manage employees and contractors. It offers consistent prices irrespective of the location and manages the payment of your team through a single invoice. It also ensures that your IP, invention rights, and sensitive employee details are fully protected wherever you operate.
Book a demo with Skuad experts to know more.
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