Swiss payroll for Corporations quintessentially encompasses key functions such as management of employee database, calculating salaries and wages, bonuses, deductions and employer withholdings, preparing pay slips etc. Likewise, it is also dependent on variables such as the nature of employment-whether temporary, contractual or permanent, or whether the company employs Swiss citizens, or from EU countries or foreign nationals.
Swiss Corporations have established practices of hourly, daily, weekly and monthly payment rules. All employees are entitled for 20 days of statutory holidays per annum and an amount equal to 8.33% of global salary that must appear on the salary statement.
Individuals working for Swiss corporations for a period of three months are more are subject to contributions towards Social Security. This involves two elements- Risk Element and Savings element. Risk element is non-recoverable and provides insurance in the event of death or disability caused at work. Savings element can be recovered in as cash lump sum, if, (i) the employee lives outside EU, (ii)leaves the Swiss company (iii) or uses the amount to buy his primary residence.
Once the basis salary figures are arrived at, the employer is required to withhold the following taxes and insurances
|AHV||Social security contribution paid at the rate of 5.15%|
|Solidarity Fund||Amounts to 0.5% of income over 10,500 CHF per month( or income over 126,000 CHF annually)|
|ALV||Unemployment insurance of 1.1% with an upper limit of 10,500 CHF per month|
|Accident Insurance||Contribution of 0.652% “professional insurance” on income up to 10,500 CHF per month|
|Social Security Administration||Social Security administration is 2% of total Social Security contributions|
|BVG||Pension contribution involving both savings and risk elements(as and where applicable)|
|Administration Costs||If the contractor incurs such costs|
Based on the figures arrived at after calculating withholdings, the employee contributions are deducted on the basis of the table below:
|AHV||Basis Swiss employee’s social security contribution paid at the rate of 5.15%%|
|Tax||Tax deductible at source|
|ALV||Unemployment insurance, where the employee component is 1.1% capped at 10,500 CHF per month|
|Accident Insurance||A1.88% “non-professional insurance” on income up to 10,500 CHF per month|
The payroll and tax administration varies on the type of Swiss work permits granted to employees working in Switzerland or Swiss nationals working for companies outside the EU. The type of permit; whether, L,B,C or G depends on the contract length and whether the contract is open or closed.
The most common types of permits and their features include:
|L||Contracts specifying termination date||Expenses allowances apply||Lesser scope to avail phone and car leasing|
|B||Open ended contracts||Easier to obtain lease/rental||More controls on tax free allowances|
|C||At 5 years from entry(for EU citizens),10 years from entry (non-EU citizens)||Status in par with Swiss citizens||No right to vote in the elections|
|G||Living outside Switzerland with Swiss work contract||Dependent on personal circumstances||Tax and social insurances of country of residence applies|
Accutor AG provides payroll administration and solutions for Corporations including the likes of Fortune 500 companies. We are a team of dynamic professionals providing a broad spectrum of services including payroll administration, taxation and legal services, immigration and consular solutions for Corporations. With an experience of over two decades in this field and our offices spread over 60 countries, our motive is to provide unmatched services for corporations and maximize salaries for individuals.
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