Swiss Payroll Explained Recruitment Agencies


Recruitment agencies based out of Switzerland or have their presence in other countries come under the purview of the Swiss tax legislation at Cantonal and Federal levels and Swiss employment Law. The multitudinous roles and functions handled by the recruitment agencies is what that makes their payrolls complicated. Besides, recruitment agencies have to hire temporary staff in addition to their existing work force.

Typically, the payroll functions for recruitment agencies include-managing the data base of employees and calculation of salaries, preparing pay slips after considering due deductions and costs. Recruitment agencies have to consider the following factors for effective payroll management:

Pensions and Holidays

  • Pensions: Contributions towards pension is due from all Swiss employees working for Swiss companies for more than three months. The two components here are (i) risk element and (ii) savings element. While the risk element includes the non-recoverable insurance element in the event of death or disability caused at work, savings element can be recovered in the event where (i) the employee leaves the Swiss company or (ii) where the employee lives outside the EU or (iii) uses the amount to buy his primary residence.
  • Retirement Plan: none of the above is applicable, or is availed of by the employee during his tenure; these contributions will be a part of retirement plan.
  • Holidays: All employees working for Swiss companies are entitled to 20 days of statutory holidays. Besides they are entitled to an amount equal to 8.33% of annual pay as “holiday pay” on pay stubs.

Basis Salary

Recruitment agencies have to consider either (i) daily rate by the number of days worked, or (ii) an hourly rate by number of hours worked, in calculating the “gross monthly salary”. Deductions towards Social security are made from this amount which qualifies as the basis salary. In arriving at the net salary, employer contribution and employee costs are deducted from the basis salary. 

Employer contributions include:

AHV Social security contribution paid at a rate of 5.15%
Solidarity Fund Solidarity Fund contributions at a rate of 0.5% of income over 10,500 CHF per month
ALV Unemployment insurance at a rate of 1.1% with 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 Social Security administration is 2% of social security contribution
BVG Pension contributions both savings and risk as applicable
  Recruitment agencies have to withhold the following taxes and insurances of their employees after deducting the employer contributions. The final amount after these calculations is the net salary of employees.
Social security contribution (AHV)- This comprises of a three-pillar system including old age and survivors/disability insurance, occupational pension plan and private investment options. Swiss employee contribution made at a rate of 5.15%.
Unemployment insurance at a rate of 1.1%
Accident insurance at a rate of 0.652%
Tax at source

Accutor AG is a Management Company offering payroll solutions to recruitment agencies. We provide 360° solutions for payroll, taxation, and management services, besides providing a wide spectrum of legal, HR and consular solutions to independent contractor, recruitment agencies and corporations. Our motive is to provide tax efficient solutions and thereby increase your net take home salary.

Accutor: Key Benefits of Partnering With Us in Switzerland

  • Streamlined operations in Switzerland & a highly qualified multi - lingual team means that Accutor is a cost - effective and efficient solution
  • Flexibility of an independent Contractor combined with benefits of an Employee (i.e. Pension, sick pay, accident cover etc)
  • We work with all of the major corporations in Switzerland - we know how to meet their requirements
  • Tax optimization and full contractor, international agency and corporate compliance
  • Relocation advice and rapid facilitation of business visas and work permits for Switzerland

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Accutor:

  • Provides clients in Switzerland with more than just payroll management services...
    • Our team of international lawyers and accountants are on hand to advise on all aspects of living and working in Switzerland
  • Is headquartered in Switzerland...
    • Therefore our clients are assured of legal compliance and benefit from stringent Swiss data protection laws