Hire Employees in Switzerland

A GmbH or AG can be formed in two to four weeks, but at least one signatory must be resident in Switzerland, which often forces a nominee arrangement. Registration with an AHV compensation office, a BVG pension provider and an accident insurer follows.

An EOR avoids the residency requirement entirely.

Your own entity means incorporating a local company or registering a branch. Either can employ staff and sponsor permits, and either commits you to local corporate tax, accounting and annual filings. Budget 2 to 4 months before the first hire, and remember that the obligation continues even in months with no payroll.

An Employer of Record removes that lead time. The EOR is the legal employer in Switzerland, runs payroll and statutory filings, and carries the employment liability, while day-to-day direction stays with you. It is the faster route for the first hires and for testing a market before committing to an entity.

Engaging someone as a contractor is a third option, but only where the work is genuinely independent. Where it is not, reclassification brings back contributions, interest and penalties — see the risk check further down this page.

EOR for the first hires and where no Swiss-resident director is available. Entity once Switzerland is settled.

Contractors are decided by the AHV compensation office, not by the contract. If it rules the relationship dependent, the payer owes retroactive contributions for both sides — and the decision binds the tax authority too.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a small Swiss entity somewhere between 15 and 20 employees. Model both before committing — see EOR vs Entity for the full comparison, and plan any later migration so employees keep seniority.

Already paying someone in Switzerland as a contractor? Run the risk check before the arrangement is tested by an audit.

Not sure which model fits? A GX specialist will cost EOR vs entity for your exact headcount — free, within two business days. Get a model recommendation

Switzerland is the only market in this guide where employer cost depends on the employee’s age. Second-pillar pension rates step up in bands — 7% for ages 25 to 34, 10% for 35 to 44, 15% for 45 to 54 and 18% for 55 to 65 — with the employer funding at least half. A 56-year-old therefore costs several percentage points more than a 30-year-old on the same salary.

The pension applies only to coordinated salary: gross less a coordination deduction of CHF 26,460, within a band from CHF 3,780 to CHF 64,260. Entry begins at CHF 22,680 of annual pay. Because the band is capped, pension cost stops rising well before senior salary levels.

Family allowances are cantonal, from about 1.025% to 2.75%, so the same salary costs different amounts in Zug and Geneva.

New for 2026: all AHV recipients receive a 13th annual pension paid each December. Contribution rates were not raised to fund it, so employer cost is unaffected this year.

Swiss employer pension cost depends on the employee’s age and more than doubles across a career. Statutory minimum BVG retirement credits run at 7% of coordinated salary from age 25 to 34, 10% from 35 to 44, 15% from 45 to 54 and 18% from 55 to reference age, with the employer bearing at least half. A 55-year-old therefore costs materially more than a 30-year-old on identical pay — a variable no salary-based estimate will capture. Two further points shape the real figure. Family allowance contributions are employer-only and set cantonally between roughly 1.025% and 2.75%, so the same hire costs different amounts in different cantons. And the coordination deduction of CHF 26,460 is fixed rather than pro-rated, which penalises part-time staff heavily — at a 50% workload only about CHF 13,540 of salary is insured. The 2024 reform that would have changed this was rejected at referendum, though employers may adjust the deduction pro rata through their own scheme rules.

Four representative profiles, each at a stated age because Swiss employer cost depends on it — the second-pillar pension rate steps from 7% to 18% across four age bands. Salaries are illustrative market midpoints, not GX operating data. Family allowances are cantonal and shown at an illustrative 2%. A 13th month salary is customary in most sectors and is not included. For real market data on your roles, ask for a costing.

Four representative profiles costed on 2026 statutory rates. Salaries are illustrative market midpoints, to be replaced with GX operating data.

Monthly payroll, with a 13th month salary customary in most sectors — usually paid in December or split between June and December. It is contractual rather than statutory, so check the offer.

Swiss citizens and settlement-permit holders receive gross pay and settle tax themselves. Everyone else is taxed at source, at cantonal rates, deducted and remitted by the employer.

Federal tax is modest; cantonal and communal tax is the larger part and varies enormously — a combined marginal rate near 22% in Zug against over 41% in Geneva.

Foreign nationals without a settlement permit are taxed at source through Quellensteuer, deducted by the employer at cantonal rates and remitted monthly. Swiss citizens and C-permit holders are billed directly and receive gross pay.

The Code of Obligations governs the individual relationship and is comparatively liberal — no cause required for termination, short notice, no statutory severance for most employees.

Where a collective agreement has been declared generally binding, as in construction and hospitality, it overrides all of that and sets minimum wages, longer notice and additional entitlements.

Written contracts are not compulsory but are the norm. The Code of Obligations supplies default terms where the contract is silent, and a collective agreement, where one applies to the sector, overrides both.

Probation is one month by default and may be extended to three by agreement. During probation either party may terminate on seven days’ notice.

The statutory maximum is 45 hours a week for office, technical and retail staff and 50 for most other sectors — higher than anywhere else in this guide. Contractual weeks are typically 40 to 42.

Overtime beyond the contractual week is compensated at 125% or by time off in lieu where agreed. Work beyond the statutory maximum is separately regulated and more tightly capped.

Four weeks of paid holiday a year, five for employees under 20. Many employers offer five weeks as a market norm, particularly in finance and pharmaceuticals.

Holiday pay must be paid as salary during the leave and cannot generally be replaced by a cash payment during employment.

Only 1 August, the national day, is a federal public holiday. Everything else is cantonal, and the number ranges from about seven to fifteen days depending on where the employee works.

For a team across cantons there is no common calendar, and neighbouring cantons frequently differ.

Swiss federal law recognises only one national holiday, 1 August. Everything else is set by the cantons, so the eight days below are those observed across essentially all of them — a national floor rather than a complete list. Most cantons add several more, and a few observe substantially more, so the applicable calendar depends on where the employee works. Confirm the cantonal list before finalising a contract.

Maternity: 14 weeks at 80% of earnings, capped, and paid by the EO loss-of-earnings scheme rather than the employer.

Paternity: two weeks at 80%, also EO-funded, to be taken within six months of the birth.

Sick leave: there is no state sick-pay scheme. The employer must continue paying salary for a period that increases with service under scales set by cantonal case law — three weeks in the first year, rising thereafter. Most employers take out daily sickness benefit insurance instead, which is a real and often overlooked cost.

Termination is comparatively easy. Notice is seven days during probation, one month in the first year of service, two months from the second to the ninth, and three months thereafter — with the contract free to agree longer.

No cause is required, and there is no statutory severance for most employees. Dismissal is unlawful only where abusive — for example on grounds of a protected characteristic or union activity — and compensation is capped at six months’ pay.

Protected periods apply: notice cannot be given during illness, accident, pregnancy or military service, and notice already given is suspended.

EU and EFTA nationals work under the free movement agreement with a straightforward permit.

Third-country nationals face annual federal quotas allocated to cantons, a labour-market test showing no EU candidate was available, and a requirement that the role be highly qualified with pay at local market rates. Allow two to four months and check quota availability before offering.

The recurring issues for foreign employers are assuming national uniformity when family allowances, tax and holidays are cantonal; under-funding the second-pillar pension; missing Quellensteuer; and overlooking a generally binding collective agreement.

There is also no state sick pay — the employer owes continued salary on a scale that grows with service, which is why daily sickness insurance is near-universal in practice.

The AHV compensation office decides independence on entrepreneurial risk, own premises and equipment, multiple clients, and freedom to organise the work. Its ruling is binding across social insurance and tax.

Answer for the Switzerland-based person you currently pay on invoice. Indicative only — not legal advice.

Registration with the AHV compensation office and enrolment in BVG and accident insurance must be in place from the first day. Accident cover is compulsory from hour one.

Confirm before the offer: the canton of work, since it drives family allowances and tax; the employee’s age, because the pension rate steps with it; and whether a generally binding collective agreement applies to the activity.