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How to hire and pay employees in Switzerland
Slasify
Jun 21, 2025
| Key Takeaways |
|---|
| 1. Payroll operates monthly, with no national minimum wage; cantonal minimum wages apply, and bonuses are typically discretionary. |
| 2. Personal income tax is progressive with federal, cantonal, and municipal levels; rates vary by canton and individual circumstances. |
| 3. Statutory contributions apply to both employers and employees, including old-age, disability, unemployment, family allowances, accident insurance, and occupational pension schemes. |
| 4. Standard working hours vary by sector (45–50 per week), with regulated overtime, breaks, daily/weekly rest periods, and limits on annual overtime hours. |
| 5. Annual leave is 4 weeks, with additional leave for employees under 20; includes public holidays, sick leave, maternity/paternity, parental, and other statutory leaves. |
| 6. Termination requires notice or just cause; severance may apply for long-serving or older employees based on contractual or statutory rules. |
| 7. Probationary period is usually up to 3 months, with short notice during probation; leave, overtime, and bonuses follow contract or agreement terms. |
Discover the global hiring and employment landscape in Switzerland – synonymous with innovation, financial stability, and a highly skilled workforce. Switzerland's strategic location and commitment to quality make it an exceptional destination for companies seeking to hire the best talent in a prosperous and stable environment.
Personal Income Tax
Since individual income in Switzerland are taxed differently at the federal, cantonal and municipal levels, and with varying allowances and deductions at each level, the Federal Tax Administration provides a tax calculator for the taxpayers' convenience.
The direct federal income tax differs for single taxpayers (S) and those who are either married or has minor children (M), as follows:
| Taxable Income—S (CHF) | Progressive Tax Rate (%) | Taxable Income—M (CHF) | Progressive Tax Rate (%) |
|---|---|---|---|
| Up to 18,499 | - | Up to 32,999 | - |
| 18,500–33,299 | 0.77 | 33,000–53,499 | 1 |
| 33,300–43,599 | 0.88 | 53,500–61,399 | 2 |
| 43,600–58,099 | 2.64 | 61,400–79,199 | 3 |
| 58,100–76,199 | 2.97 | 79,200–94,999 | 4 |
| 76,200–82,099 | 5.94 | 95,000–108,699 | 5 |
| 82,100–108,899 | 6.60 | 108,700–120,599 | 6 |
| 108,900–141,599 | 8.80 | 120,600–130,599 | 7 |
| 141,600–184,999 | 11 | 130,600–138,399 | 8 |
| 185,000–793,399 | 13.20 | 138,400–144,299 | 9 |
| 793,400 and over | 11.50 | 144,300–148,299 | 10 |
| 148,300–150,399 | 11 | ||
| 150,400–152,399 | 12 | ||
| 152,400–940,899 | 13 | ||
| 940,900 and over | 11.5 |
Local Tax
In addition to the direct federal income tax, taxpayers in Switzerland are also expected to pay taxes on the cantonal and municipal level that varies across cantons and municipalities. Furthermore, each municipality may set their own rules regarding communal taxes within certain parameters.
Statutory Contributions
While the contribution rates for Occupational Accident Insurance and Non-Occupational Accident Insurance vary according to insurers and the business' associated risk, they shall only be calculated based on the employee's salary of up to CHF 148,200.
The contribution wage threshold of CHF 148,200 shall also apply to contributions made for Unemployment Insurance (ALV).
Employer Contributions
| Contribution Rate | Note | |
|---|---|---|
| Old-Age and Survivors' Insurance, Disability Insurance and Income Replacement | 5.3% | - |
| Unemployment Insurance | 1.1% | - |
| Family Allowances | 1.025%–2.75% | The contribution rate shall vary across cantons. |
| Occupational Accident Insurance | Varies | The contribution rate shall vary according to the risk of accident and company-specific circumstances. |
| Occupational Pension Scheme | Varies |
This is compulsory only for employees with an annual income of CHF 22,680 or more. The contribution rate shall vary depending on the fund and is graded according to the employee's age. |
Employee Contributions
| Contribution Rate | Note | |
|---|---|---|
| Old-Age and Survivors' Insurance, Disability Insurance and Income Replacement | 5.3% | - |
| Unemployment Insurance | 1.1% | - |
| Non-Occupational Accident Insurance | Varies | The contribution rate shall vary across insurers. |
| Occupational Pension Scheme | Varies |
This is compulsory only for employees with an annual income of CHF 22,680 or more. The contribution rate shall vary depending on the fund and is graded according to the employee's age. |
Payment of Wages
Employers shall pay their employees' salaries by the end of each month unless other payment terms has been agreed upon.
Minimum Wage
There is no national minimum wage in Switzerland. Instead, minimum wages are regulated at the cantonal level, with each cantons having their own respective minimum wages, as follows:
| Canton | Minimum Wage |
|---|---|
| Basel-Stadt | CHF 22 per hour |
| Geneva | CHF 24.48 per hour |
| Jura | CHF 21.40 per hour |
| Neuchâtel | CHF 21.31 per hour |
| Ticino | CHF 20–20.50 per hour |
Statutory Bonus
There is no statutory obligation for the employer to provide any bonus to their employees.
Termination
In the event of a termination of an employment relationship, the terminating party shall produce a written notice explaining their reasons if requested by the other party.
Employers intending to dismiss their employees must be sure that their reasons for terminating the contract is not discriminatory or abusive. A dismissal for personal reasons that do not relate to the employment relationship or do not substantially impair cooperation within the business may be considered to be a wrongful termination.
Notice Period
The notice period in the event of a termination should be equal between the employee and employer.
| Length of Service | Notice Period |
|---|---|
| Up to 1 year | 1 month from the last day of the month |
| 2–9 years | 2 months from the last day of the month |
| 10 years and over | 3 months from the last day of the month |
The notice period can be adjusted by written individual agreements, employment contracts or collective agreements, but it can only be reduced to be less than a month by collective agreement and only for the first year of service.
Termination without notice may be permissible if there is a good cause, as determined by the Court, or in the case of the employer's insolvency.
Note: Terminations that occur due to economic reason may be subject to shorter notice period by individual agreement, standard employment contract or collective agreement.
Severance Pay
Employees who are at least 50 years old and have at least 20 years of service shall be entitled to a severance allowance on the date of their termination.
The amount of severance shall be set by a written agreement, but should at least amount to 2 months' salary. If no fixed amount is set by any agreement, the Court will decide the amount up to a maximum of 8 months' salary.
Severance may be reduced or voided if the employee initiated the termination without good cause or if the employer rightfully terminate the employee without notice. This also applies to cases whereby granting severance would inflict financial hardship to the employer.
Moreover, if the employee is entitled to benefits from an occupational benefits scheme that the employer has totally or partially funded through social security contributions, the employer may be relieved from their obligation to make severance payments.
Probationary Period
The first month of an employment relationship is considered to be a probationary period. This can be extended to up to a maximum duration of 3 months, provided that there is a written agreement to that effect.
Probationary period shall also be extended if it is interrupted by illness, accident or the performance of a non-voluntary legal obligation for an equivalent period.
During the probationary period, termination of an employment relationship require a 7 calendar days' notice. At the end of the probation, the employer and employee generally meet for a mutual appraisal interview to discuss the probation and decide whether to continue the employment relationship.
Note: Probationary employees do not have the same protection against dismissal in the event of illness or accident that they do once definitively employed.
Work Time Rules
Standard Working Hours
Standard working hours agreed to on the employment contract are subject to the following maximums:
| Sector | Maximum standard hours |
|---|---|
| Industrial sector, office staff, technical employees and sales staff in large retail companies | 45 hours per week |
| Other sectors | 50 hours per week |
Break Period
Employees are entitled to the following break periods during their working day to allow for rest and meal, though they are not considered working time:
| Working time | Break period |
|---|---|
| More than 5.5 hours | 15 minutes |
| More than 7 hours | 30 minutes |
| More than 9 hours | 1 hour |
Breaks are not considered working time and are not remunerated unless the employee cannot leave the workplace during break, making the period counts as working time, or if there are interruptions to technical operations which make the period not count as breaks.
In addition to the above break period, employees returning to work from maternity leave should also be entitled to the following paid breastfeeding break:
| Working time | Breastfeeding break |
|---|---|
| Up to 4 hours | 30 minutes |
| More than 4 hours | 60 minutes |
| More than 7 hours | 90 minutes |
Overtime
| Contractual overtime | Statutory overtime |
|---|---|
| Hours worked between the maximum contracted working hours and the statutory maximum working hours | Hours worked over the statutory working hours |
Contractual overtime can be worked if its performance is necessary, do not exert unreasonable physical or mental pressure and that the working hours and daily rest periods are respected. Employees working contractual overtime shall be paid at 25% more than the normal hourly rate, though this can be waived with a written agreement in exchange for redeeming the extra hours in time as paid leave.
Statutory overtime can be worked in the case of urgency or extraordinary increase in work, if the work is needed to complete an inventory, finish accounts or carry out a liquidation, or if the work is needed to prevent or to address operational problems.
Statutory overtime is subject to a maximum of 2 hours per day and the following annual maximums:
| Maximum standard hours | Annual limit for statutory overtime |
|---|---|
| 45 hours per week | 170 hours |
| 50 hours per week | 140 hours |
In any case, statutory overtime must be compensated with a wage supplement of at least 25%. This can be substituted with paid leave that is taken within 14 weeks or within a period agreed upon with the employer up to a maximum of 12 months.
Weekly Rest Days
Employees are entitled to at least 11 consecutive hours of daily rest time between working days. This can be reduced to 8 hours once a week, provided that an average of 11 hours is maintained over a 2-week period.
Furthermore, employees are also entitled to a rest day per week, which usually falls on a Sunday. In special circumstances, employees may be allowed to take several days off together or 2 half-days instead, provided that they consent to the arrangement.
Working on Sundays may be permitted with the employee's consent, provided that there is an approval from the competent cantonal authority or, if the work will be done in a regular basis, the authorization from the State Secretariat for Economic Affairs.
| Occasional Sunday work | Regular Sunday work |
|---|---|
| Refers to temporary Sunday work of a fixed duration not exceeding 6 months per case. | Any work that extends beyond the terms of occasional Sunday work are considered to be regular Sunday work. |
Working on Sundays shall entitle the employee to the following compensation:
| Compensation | |
|---|---|
| Occasional Sunday work |
50% wage supplement, plus compensatory time off equal to the duration worked to be granted within 4 weeks for employees working up to 5 hours on Sundays. If the employee works for more than 5 hours on Sundays, the compensatory time off shall be equivalent to a full day, in addition to their daily rest time, during the current or the following week. |
| Regular Sunday work |
Compensatory time off equal to the duration worked to be granted within 4 weeks for employees working up to 5 hours on Sundays. If the employee works for more than 5 hours on Sundays, the compensatory time off shall be equivalent to a full day, in addition to their daily rest time, during the current or the following week. |
Holiday and Leave Entitlements
Public Holidays
Employees shall generally not be required to work on public holidays, with each canton having their own respective designated days as public holidays. There are 4 days of public holidays that apply throughout Switzerland in 2025.
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Ascension | May 29 |
| Swiss National Day | August 1 |
| Christmas Day | December 25 |
More information on the holidays that apply in each canton can be accessed through the official government release.
The performance of work on public holidays is subject to the same regulations as work performed on the employee's weekly rest day.
Annual Leave
Employees shall be entitled to at least 4 weeks of paid annual leave for every year of service. That said, those under 20 years old shall be entitled to at least 5 weeks of paid annual leave for every year of their service.
Employees that have not worked the full year will have their annual leave prorated accordingly.
The timing of the annual leave shall generally be determined by the employer's business needs, with at least 2 weeks of leave being taken consecutively. If the employee falls ill or have a serious accident during their leave, they shall be entitled to postpone their leave, provided that they present a medical certificate.
Sick Leave
Employees unable to work due illness or accidents are entitled to continued salary payments for a limited time, including fair compensation for lost benefits in kind.
In the employee's first year of service, they shall be entitled to 3 weeks of continued salary payments in the event of their absence due to the aforementioned reasons, provided that the employment has lasted for more than 3 months. This entitlement may increase with their length of service according on the cantons the employee operates in and the applicable cantonal scales.
If the employer has sickness benefit insurance for the employee that covers at least 80% of the salary income lost over the period, the employer shall no longer be obligated to make continued salary payments. In any case, employers must insure their employees against the consequences of an accident.
Employees are protected from termination during their absence due to illness or accidents for the following durations:
| Length of Service | Duration of protected leave |
|---|---|
| Up to 1 year | 30 days |
| 2–5 years | 90 days |
| 6 years and over | 180 days |
Maternity Leave
Employees are entitled to at least 14 weeks of maternity leave after giving birth. This leave can be extended by the extended period of maternity allowance payment of up to 56 days when the child remains in the hospital for at least 14 consecutive days.
The rate of daily maternity pay will be 80% of the average earned income before the birth of the child, up to a maximum of CHF 220. This will be funded under the Loss of Earnings Compensation Act for qualified employees.
Mothers are entitled to extend their maternity leave by 2 weeks beyond the standard 14-week period, though they will not receive any benefit for those 2 additional weeks. At the end of these 2 weeks, the employer may decide whether or not to grant the employee's request for a longer period of unpaid leave.
Paternity Leave
Employees who are legally the father of a child at the time of birth or those who will be a legal father within 6 months are entitled to 2 weeks of paternity leave. This leave can be taken within 6 months of the birth of the child, and can be taken in weeks or on a day-to-day basis.
The rate of daily paternity pay will be 80% of the average earned income before the birth of the child, up to a maximum of CHF 220. This will be funded under the Loss of Earnings Compensation Act for qualified employees.
Parental Leave
If the employee's child falls ill and cannot go to a nursery, kindergarten or school, the employee may be entitled to up to 3 days of paid leave, provided that a doctor's certificate is provided.
Employees who are entitled to parental allowances under Articles 16n–16s of the Loss of Earning Compensation Act due to their child's health being seriously impaired will also be entitled to up to 14 weeks of childcare leave.
If both parents are employed, each parent will be entitled to a maximum of 7 weeks of childcare leave, which can be distributed at will. This leave shall be taken within a period of 18 months beginning on the first day the daily allowance is collected, and can be taken on a day-to-day basis or at a stretch.
Other Leave
| Leave | Paid/Unpaid | Duration | Note |
|---|---|---|---|
| Adoption Leave | Paid | 2 weeks |
For qualified employees adopting a child under 4 years old, and must be taken within the year following the adoption. The rate of daily adoption pay will be 80% of the average earned income before the child's adoption, up to a maximum of CHF 220. This allowance is not paid automatically, and the employee must explicitly request it from the federal compensation office. |
| Bereavement Leave | Paid | 2–4 days |
In the event of the death of an employee's spouse or child living in the same household, they shall be entitled to 3 days of leave. Death of other relatives and close acquaintances entitles them to a day of leave. Moreover, the employee shall be entitled to an additional day of leave to participate in the funeral proceedings. |
| Carer's Leave | Paid | 3 days per event, up to 10 days per year | For employees to take care of a family member or life partner with health problems. |
| Examination Leave | Paid | 6 days | For employees to take higher professional examinations recognized by the State Secretariat for Education or Research and Innovation (SERI), or to take public or state subsidized professional examination. |
| Leave for Changing Residence | Paid | 1 day | - |
| Leave for Leadership Activities | Unpaid | 1 week |
For employees under 30 years old to carry out leadership, care or advisory activities in connection with extracurricular youth work for cultural or social organizations and for related initial and ongoing training. The time and duration of the leave should be agreed upon between the employer and employee. If an agreement cannot be reached, the employee must give their employer a 2 months' notice. |
| Leave for Military Recruitment or Inspection | Paid | 1 day | - |
| Marriage Leave | Paid | 1–2 days | Employees are entitled to take a day of for the marriage of their children and 2 days of for their wedding. |
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