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How to hire and pay employees in Liechtenstein
Slasify
Jun 21, 2025
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- Before Hiring
- At a Glance
- Personal Income Tax
- Statutory Contributions
- Payment of Wages
- Termination
- Probationary Period
- Work Time Rules
- Holiday and Leave Entitlements
- Get In Touch
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| Key Takeaways |
|---|
| 1. Payroll operates monthly, and there is no national minimum wage; payment frequency depends on agreement. |
| 2. Personal income tax is progressive up to 8%, with local municipal taxes ranging 150–200% of national tax. |
| 3. Social insurance, unemployment, pension, and health contributions apply to both employers and employees, rates vary depending on scheme. |
| 4. Standard working hours are 45–48 per week, with daily rest periods, regulated overtime, and weekly rest days. |
| 5. Annual leave is 4 weeks (5 weeks for employees under 20), plus 13 public holidays, sick leave, maternity, and parental leave. |
| 6. Termination requires statutory notice with minimum durations based on years of service; severance pay is generally not required. |
| 7. Probationary period is generally 1 month, with leave, bonus, and overtime policies varying based on role, seniority, and agreement. |
Discover the global hiring and employment landscape in Liechtenstein – an economic powerhouse in Europe with a strong financial services sector. Known for its stability, high quality of life, and skilled workforce, Liechtenstein is an attractive destination for business growth in Europe.
Personal Income Tax
National income taxes vary depending on the tax payer's status, as follows:
| Taxable Income - Single Filers (CHF) | Taxable Income - Single Parents (CHF) | Taxable Income - Married Couples (CHF) | Progressive Tax Rate (%) |
|---|---|---|---|
| Up to 15,000 | Up to 22,500 | Up to 30,000 | - |
| 15,001–20,000 | 22,501–30,000 | 30,001–40,000 | 1 |
| 20,001–40,000 | 30,001–60,000 | 40,001–80,000 | 3 |
| 40,001–70,000 | 60,001–105,000 | 80,001–140,000 | 4 |
| 70,001–100,000 | 105,001–150,000 | 140,001–200,000 | 5 |
| 100,001–130,000 | 150,001–195,000 | 200,001–260,000 | 6 |
| 130,001–160,000 | 195,001–240,000 | 260,001–320,000 | 6.5 |
| 160,001–200,000 | 240,001–300,000 | 320,001–400,000 | 7 |
| Over 200,000 | Over 300,000 | Over 400,000 | 8 |
Local Taxes
Local authorities may impose a municipal tax that varies according to the employee's residence, and it ranges between 150% and 200% of the national income tax.
Statutory Contributions
The contributions made for Unemployment Insurance (ALV) shall be calculated based on the employee's annual salary of up to CHF 126,000.
Employer Contributions
| Contribution rate | Note | |
|---|---|---|
| AHV (Old-Age and Survivors' Insurance) | 4.225% | |
| IV (Disability Insurance) | 0.675% | |
| FAK (Family Compensation Fund) | 1.9% | |
| VK (Administrative Cost) | 0.575% | |
| ALV (Unemployment) | 0.5% | |
| BPVG (Occupational Pension) | Varies | The contribution rate varies depending on the chosen pension scheme. |
| KV (Health Insurance) | Varies |
Half of the contributions are borne by the employer. Employers must also pay a uniformly set contribution amounting to CHF 166 per month (or CHF 83 per month for those between 16 and 20 years old). |
| UV (Accident Insurance - Occupational) | Varies | The contribution rate varies across various insurance providers. |
Employee Contributions
| Contribution rate | Note | |
|---|---|---|
| AHV (Old-Age and Survivors' Insurance) | 4.025% | |
| IV (Disability Insurance) | 0.675% | |
| ALV (Unemployment) | 0.5% | |
| BPVG (Occupational Pension) | Varies | The contribution rate varies depending on the chosen pension scheme. |
| KV (Health Insurance) | Varies |
Half of the contributions are borne by the employer. Young people up to the age of 16 are exempt from the premium for compulsory health insurance, and those who have not yet reached the age of 20 do not pay any contribution towards the costs. |
| UV (Accident Insurance - Non-Occupational) | Varies | The contribution rate varies across various insurance providers. |
Payment of Wages
Unless shorter periods or other dates have been agreed to, the employee shall be paid their wages at the end of every month.
Minimum Wage
There is no national minimum wage in Liechtenstein.
Statutory Bonus
There are no statutory bonuses in Liechtenstein, though any employer who grants bonuses to their employees must adhere to the regulations under the applicable Laws.
Termination
Employment contracts of an indefinite duration may be terminated by either party, with the terminating party being obligated to provide their reasons in writing upon request.
Generally, either party who terminates an employment relationship must observe the required notice period. However, this is not required if the termination is done for an important reason or due to wage risk in the event the employer becomes insolvent.
An important reason refers to any circumstance which makes it so that, in good faith, it would no longer be possible for the terminating party to be expected to continue the relationship.
Notice Period
Different periods of notice may not be set for employers and employees, and they must meet the following minimum durations, each time effective at the end of the month:
| Year of service | Notice period |
|---|---|
| 1st year | 1 month |
| 2nd–9th year | 2 months |
| Subsequent years | 3 months |
Notice periods may be modified by written agreement. However, they may only be reduced to less than a month by collective agreement and only for the first year of service. That said, if the employer has terminated the employment relationship for economic reasons, shorter notice periods may be agreed upon by the relevant parties.
Note: Employees shall be granted some time off after their termination to look for another job.
Severance Pay
Employers in Liechtenstein are generally not required to pay any severance upon termination, with pension benefits being paid out by the relevant social security institution.
Probationary Period
The first month of an employment relationship shall be deemed a probationary period, and employment relationships can be terminated at any time during this period with a notice period of 7 days to the end of a working week.
Different arrangements of probation may be made by written agreement. However, the probationary period may only be extended to a maximum of 3 months.
Work Time Rules
Standard Working Hours
Standard working hours in Liechtenstein are subject to the following maximums:
| Category of workers | Maximum standard working hours |
|---|---|
| Employees in industrial establishments and for office, technical and other employees, including sales staff in large retail establishments | 45 hours per week |
| All other workers | 48 hours per week |
In any case, an employee's daily working hours, including breaks and overtime, shall not exceed 13 hours.
Break Period
Employees are generally entitled to the following break periods, which are considered working time only if the employee is not allowed to leave their workplace:
| Continuous working period | Duration of break |
|---|---|
| More than 5.5 hours | 15 minutes |
| More than 7 hours | 30 minutes |
| More than 9 hours | 60 minutes |
Furthermore, employees who are breastfeeding must be given the time required for such purpose.
Overtime
Employees may only be required to work overtime in exceptional cases, such as extraordinary increase in workload, urgent work and when the work is needed to prevent or eliminate operational disruptions.
Overtime hours worked shall not exceed 2 hours per day, except on non-working days or in emergencies, and the employee's average weekly working time, including overtime, shall not exceed 48 hours within a 4-month period.
Employers shall pay employees a wage supplement of at least 25% for overtime work, though this is only required for overtime work exceeding 60 hours in a calendar year. If overtime work is compensated by free time of the same duration within a reasonable period of time, with the agreement of the individual employee, no additional payment shall be made.
Weekly Rest Days
Employees shall be entitled to a daily rest period of at least 11 consecutive hours. Moreover, the employment of workers is prohibited between 11:00 p.m. on Saturday and 11:00 p.m. on Sunday.
Employers must generally obtain approval of the Office for Economic Affairs for Sunday work and grant those who only temporarily perform Sunday work a wage supplement of at least 100%. Furthermore, the following shall apply:
| Sunday work lasting up to 5 hours | Sunday work lasting longer than 5 hours |
|---|---|
| Employee must be compensated by equivalent free time | Employee must be granted a substitute rest day of at least 24 consecutive hours |
In any case, a whole Sunday must be set aside as a weekly rest day immediately before or after the daily rest period at least once every 2 weeks.
Holiday and Leave Entitlements
Public Holidays
Public holidays shall be treated the same as Sundays, whereby work is generally prohibited unless otherwise approved when the legal requirements are met. There are 13 days of public holidays in Liechtenstein for 2024.
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Epiphany | January 6 |
| Easter Monday | April 1 |
| Labor Day | May 1 |
| Ascension | May 9 |
| Whit Monday | May 20 |
| Corpus Christi | May 30 |
| National Day | August 15 |
| Nativity of Mary | September 8 |
| All Saints' Day | November 1 |
| Immaculate Conception | December 8 |
| Christmas Day | December 25 |
| St. Stephen's Day | December 26 |
Annual Leave
Employees are entitled to at least 4 weeks of paid annual leave, or 5 weeks for those up to the age of 20, for each year of their service. This leave shall be prorated for an incomplete year of service accordingly.
Annual leave shall, as a rule, be granted consecutively and during the relevant service year, but at the latest in the following service year. In the case of young employees, at least 2 weeks of holiday shall be consecutive. This leave may not be compensated for by cash payments or other benefits during the term of the employment relationship.
Sick Leave
Employees may be entitled to paid leave if they are prevented from working for personal reasons through no fault of their own, including in cases of illness, accident, pregnancy and childbirth, provided that the employment relationship has lasted, or was entered into, for more than 3 months.
As per the Health Insurance Law, employees are entitled to receive sick pay from the second day of being sick, with it being paid for up to 720 days within 900 consecutive days.
Maternity Leave
Employees shall be entitled to take leave while pregnant upon notice and they shall not be required to work for 8 weeks after giving birth.
Generally, maternity benefits under the Health Insurance Law are granted for 20 weeks, of which 16 weeks is taken after the birth of the child. To be entitled to maternity benefits, the employee must have been insured for at least 270 days prior to their confinement without an interruption of more than 3 months.
Parental Leave
In cases of employment relationships that have lasted, or have been entered into, for more than a year, the employee shall be entitled to 4 months of parental leave.
Parental leave can be taken full-time, part-time, in parts or by the hour, and the entitlement to this leave shall arise as follows:
| Birth of a child | Adoption of a child |
|---|---|
| This leave can be claimed until the child reaches the age of 3 | This leave can be claimed until the child reaches the age of 5 |
Note: This leave only applies to employees who live with their child as their parent in the same household and primarily looks after the child themselves.
Other Leave
| Leave | Paid/Unpaid | Duration | Note |
|---|---|---|---|
| Family Care Leave | Paid | 3 days | This can be taken in the event of illness or accident of family members living in the same household upon the presentation of a medical certificate, provided that the immediate presence of the employee is urgently required and the care cannot be organized in any other way. |
| Job Search Leave | Paid | - | After the termination of employment, the employee shall be granted the time necessary to look for another job. |
Get In Touch
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