Employer of Record in Switzerland

The Swiss The EOR (Employer of Record) solution Marzuna takes care of your company’s expansion needs in Switzerland without requiring you to incorporate an organization. Comprising 26 states or cantons, the Federal Republic of Switzerland is sometimes referred to as the Swiss Confederation. Switzerland is frequently referred to as a tax haven because of its straightforward tax laws that make it easier for any business to operate. Their strategies are remarkably similar to those of other countries, despite the fact that they could seem complex from the outside.

Overview of Switzerland

• Population: 85.4 million people (2020)
• Currency: Swiss franc (CHF)
• Capital City: Bern
• Languages spoken: German, French, Italian, Romansh
• Gross Domestic Product (GDP): USD 747,969 billion (2020)

Employment Landscape in Switzerland

Important Considerations for Employment in Switzerland

Switzerland, as an economically developed nation, offers a multitude of advantages for businesses of all scales. Here are some key benefits of establishing a business in Switzerland:

• Robust Economy and Currency: Switzerland boasts a stable and financially strong economy, providing an ideal backdrop for business operations.
• Presence of Multinational Corporations (MNCs): The country is home to the headquarters of numerous multinational corporations, fostering a dynamic business environment with ample networking opportunities.
• Efficient and Reliable Administration: Switzerland is renowned for its streamlined workflows and well-organized processes, ensuring a smooth and hassle-free work environment.
• Employer-Friendly Labour Market: The Swiss labour market is known for its straightforward and practical regulations, making it easier for employers to manage their workforce.
• Favorable Tax System: Switzerland offers a highly advantageous tax system with low to moderate tax rates, allowing businesses and individuals to retain a significant portion of their earnings.
• Political Stability: Switzerland enjoys political stability and maintains a consistent, reliable legal framework. The country is known for its avoidance of frequent changes in rules and regulations, providing a predictable business environment.

While Swiss employment law is generally more liberal compared to other European countries, it is essential for businesses to have a comprehensive understanding of the legal and operational aspects when establishing a business entity in Switzerland. Adhering to Switzerland’s legal requirements, which are categorized at both federal and cantonal levels, is of utmost importance.

To facilitate a seamless and hassle-free setup of your business entity in Switzerland, it is highly advisable to seek guidance from local experts in employment laws. Connecting with these experts can help you navigate challenges and ensure strict compliance with Swiss employment regulations.

Entitlements	Explanation
Statutory Working hours	The statutory work hours are 45 hours per week.
Overtime Eligibility	Statutory and contractual overtime is subject to the restrictions listed below: A person should not work more than two hours of overtime each day. For workers who put in 50 hours per week, the annual maximum for overtime should be 140 hours. For workers who put in 45 hours per week, the maximum amount of overtime per person per year should be 170 hours. The employees who are selected over time have the burden of proof, and they must notify the company right away. Overtime compensation is at least 25% more than regular salary.
Paid public holidays	Paid public holidays are determined by Swiss cantons (states). Some of the key holidays are, New Year’s Day Good Friday Easter Monday Ascension Day Whit Monday Swiss National Day Christmas Day St. Stephen’s Day
Holiday Pay	An employee is entitled to four weeks of paid vacation each year, plus pay for sick days, annual leave, and working on legal holidays.
Medical leave	The first year of employment comes with 21 days of compensated sick time for the employee. In the second year, you can take up to two months off, and in the third year, you can have eight or nine weeks off. Depending on the canton, an employee may also be eligible for additional paid sick leave and unpaid leaves. Within three days of their absence, the employees are required to submit sick leave notes.
Maternity Leave	A female employee is entitled to three months of paid maternity leave. As long as the woman has been worked and paid into social security, the maternity leave is assured. Except in Geneva, where the leave allowed is 16 weeks, women can take up to 14 weeks of unpaid leave in exchange for 80% of their wages. Although there is no such thing as a legally mandated paternity leave, some employers do provide it. To preserve their health, new moms are entitled to some specific accommodations, such as staying away from strenuous labour and night shifts, among other things. The social security program covers all maternity and paternity benefits.
Annual Leave Accrual Entitlement	The employees get an annual paid leave depending on the duration and type of service. Duration of service Leaves Work up to 38 hours a week Four-week leave per year Part-time employees Pro-rata paid leave
Leave Expiry	Leaves for the current year cannot be rolled over to the next year.
Accrued Leave At Termination	Any unused leave or annual leave is paid upon the termination of service.

Contractors vs. Full-Time Employees

Understanding Employment Contracts in Switzerland: Full-time vs. Contractual

When considering employment contracts in Switzerland, it’s essential to grasp the advantages and disadvantages of both contractual and full-time agreements in alignment with your company’s requirements. Regardless of the contract type chosen, paying in Swiss Francs (CHF) is a fundamental requirement.

For businesses with a transient presence in Switzerland, contractual labor is often the ideal choice. Conversely, if your company is expanding nationally, hiring full-time employees may be more advantageous. Let’s delve into each of these:

Full-time Employment in Switzerland:

• High Level of Supervision: Full-time employees work under the constant supervision and direction of their superiors.
• Fixed Work Hours and Office Attendance: There are established work hours and an expectation of regular office attendance.
• Dedicated Workspace: Each employee is allocated a designated workspace.
• Trial Period Agreement: A trial period may be established to assess an employee’s suitability for the role.
• Employee Subordination: Full-time employees operate under the guidance and control of their superiors.
• Regular Salary Payments: Salaries are disbursed periodically, such as on a monthly basis.

Contract Work in Switzerland:

• Autonomy: Contractors work with more freedom and autonomy, experiencing less direct supervision.
• Flexible Termination: The legal relationship can be terminated as per the agreed-upon terms and at the contractor’s discretion.
• Workload Constraints: Contractors may have restrictions on the volume of work they can undertake.
• Provision of Supplies and Equipment: Typically, contractors are responsible for providing their own supplies and equipment for the job.

The Marzuna Employer of Record (EOR) solution can cater to your employment needs, whether your company seeks contractors or full-time employees. For additional information and expert guidance in navigating Switzerland’s job market, don’t hesitate to reach out to our specialists. Contact us to learn more about how we can assist you in your hiring endeavors.

Recruiting in Switzerland

Navigating Employment Regulations in Switzerland

Switzerland’s employment landscape is governed by two key legal frameworks:

• Code of Obligations (Articles 319 to 362): This legislation encompasses fundamental employment regulations, addressing topics such as employment contracts, working hours, leave policies, and termination procedures.
• The Labor Act: This act further extends protections and guidelines for employees, encompassing areas like working conditions, safety standards, social security provisions, and more.

Switzerland also provides for collective bargaining through the Collective Labor Law, enabling constructive negotiations and the establishment of collective agreements between employers and employees.

When seeking employment in Switzerland, job seekers frequently turn to various job portals to explore job opportunities. Some of the prominent job portals in the country include:

• LinkedIn
• Indeed
• Adesso
• Monster

Applicants are typically required to submit their curriculum vitae or resume, a well-crafted cover letter, and educational credentials as part of their application. It’s crucial for applicants to align their cover letter and application details with the language preferences specified by the employer on the job portal.

Should you require assistance in hiring skilled professionals in Switzerland while ensuring strict adherence to Swiss labor laws, our team can offer valuable support. Our experts will guide you through the complexities of Swiss employment regulations, enabling you to attract and hire top talent while staying in full compliance with all legal requisites.

Probation & Termination in Switzerland

Probation Period

In Switzerland, the typical probationary term is between one and three months long. The employee is entitled to perks and other rights specified in the contract when the probationary term is ended. Although there is no protection for employees in the event of a dismissal resulting from an accident, illness, or pregnancy. With a seven-day notice, the employment agreement may be ended during the probationary period.

Termination of Service

There are several ways to end an employment agreement in Switzerland. The potential outcomes are as follows:

• Mutual Agreement: The contract may be terminated by mutual agreement between the employer and the employee.
• Parties’ Initiative: The contract may be terminated at the employer’s or employee’s request.
• Employee Death: Should an employee pass away, the contract will be promptly cancelled.
• Contract Expiration: If a contract has a set expiration date, it will automatically expire when that time comes.
• Other justifications: Depending on the situation, termination may also take place for other justifications.

In Switzerland, the amount of notice required to discontinue an employment agreement varies on the employee’s length of service. The standard notice time might be anywhere between one week and two months. Depending on how long the individual has worked for the business, the precise length is decided.

When ending an employment contract in Switzerland, it’s critical that both employers and employees are informed of their alternatives and follow the proper notification requirements.

Type of Employment	Notice Period
An employee on probation	7 days
Workers with up to one year of employment	One month
Workers with between two and nine years of employment	Two months or as decided/mentioned in the contract
Workers with more than 10 years of employment	Three months

EOR Solution in Switzerland

Simplify Your Business Expansion in Switzerland with an EOR Solution

Expanding your business in Switzerland can be a rewarding venture, but it comes with its fair share of administrative challenges and legal compliance requirements. To ensure a smooth and profitable expansion while adhering to all regulations, opting for an Employer of Record (EOR) solution is a prudent choice. By choosing the EOR path, you can be confident that your growing organization will stay fully compliant with Swiss laws governing payroll management and other employment-related obligations.

Our organization specializes in providing comprehensive EOR services that streamline the process of managing your workforce in Switzerland. We assist you in handling all aspects of your employees’ contracts, work permits, tax obligations, monthly payroll, taxation matters, and visa requirements in Switzerland.

When you decide to expand your company organization in Switzerland, several key factors come into play. Navigating local administrative and labor regulations in a foreign country can be a daunting task. This is where our expertise comes into play. We are a local payroll company well-versed in Swiss labor laws, ensuring that your business remains in full compliance with the intricacies of local employment regulations. Partner with us to simplify your expansion efforts in Switzerland and focus on your core business objectives while we take care of the administrative complexities.

Types of Visas In Switzerland

Anyone willing to work in Switzerland needs to get any one of these visas as per their requirements.

Visa Category	Explanation
L Permit	Available to non-EU and EU/EFTA citizens. Used for short-term employment, up to 12 months. Quota restrictions apply when the length exceeds four months. In order to be considered, applicants must demonstrate that they satisfy the educational and job experience criteria.
B Permit	Available to citizens of the European Union (EU), the European Free Trade Association (EFTA), and countries outside of the EU Valid for a year, but can be extended If the length is more than four months, it is capped. Applications for permits must demonstrate that they satisfy the standards for education and job experience. The employer will have the work permit approved when they apply for an entrance visa at the Swiss consulate. Within 14 days after arrival, the residence permit can be obtained at the Residents Registry office.
G Permit	It is open to permanent residents who have resided continuously in Switzerland for 10 years, commuters, and cross-border employees.
Residence Permit Eligibility	The following qualifications must be met in order to be granted a residency permit. Should have a familial link or a domestic tie Not being a forbidden immigrant; requiring a relative or a domestic connection; and making contributions to Switzerland’s social, economic, or cultural level
Residence Permit	residency permits for those with sufficient resources. Pay yearly lump-sum taxes in accordance with the several cantons
Switzerland Transit Visa (A-Visa)	The transit visa is given to transient travellers who are staying in the country for a few days while they wait for a flight to another country.

Work Permit

Our company handles all the duties and demands associated with work permits as a reputable EOR agency in Switzerland. A few important questions are addressed in the table below.

Work Permits	Details
Can we sponsor Work Permits in Switzerland?	Yes
Processing time	Four to six weeks
Work permit process	Step 1: Your employer submits an application for your work permit to the local Swiss canton’s immigration office. Step 2: You submit a work visa application via the Swiss consulate. Step 3: You will receive the visa when your local employer completes your work permit. Step 4: You must provide the following papers in addition to the visa application form. A copy of your passport documentation of your job offer a resume detailing your previous employment and educational background;
Work Permit validity	12 months
When can an employee travel to Switzerland?	After your work permit has been successfully processed and the visa has been issued
Can a Resident Visa be switched to a Work Permit?	No
What’s the cost of a Work Permit Visa?	On average, the cost is CFH 100

Payroll & Taxes in Switzerland

Navigating Switzerland’s Employment Contracts and Payroll Establishment

Before establishing your business organization in Switzerland, it’s vital to gain a thorough understanding of the laws and regulations governing employment contracts. Foreign businesses looking to efficiently recruit and manage employees in Switzerland while ensuring compliance with local labor laws must establish a payroll system. There are various ways to set up a payroll system, each with its own considerations:

• Establishing a Separate Legal Entity and Internal Payroll Management: This option involves the creation of a separate legal entity in Switzerland along with an internal payroll management department. It provides direct control over payroll management, ensuring you have complete oversight.
• Remote Payroll: If your business has a parent company, you can integrate the payroll of the parent company with that of your Swiss employees. This remote payroll setup allows for more efficient payroll administration across multiple locations.
• Collaboration with a Local Company for Payroll Outsourcing: Partnering with a local company in Switzerland that specializes in HR tasks and payroll outsourcing can be a viable option. While retaining overall control and liability, they will handle payroll management.
• Utilizing a Global Employer of Record (EOR) Service for Payroll Outsourcing: Another choice is to work with a global EOR service based in Switzerland. They can manage your payroll while ensuring compliance with local rules and regulations, offering full-service HR support.

Selecting the most suitable payroll system for your company will depend on your specific business requirements, available resources, and preferences. By choosing the right approach, you can effectively handle payroll processes and ensure adherence to Swiss employment laws.

Taxes in Switzerland

Tax	Explanation
Income Tax	Gross income Tax Rate (%) CHF 0 to 28299 0% CHF 28300 to 50899 1% CHF 50900 to 58399 2% CHF 58400 to 75299 3% CHF 75300 to 90299 4% CHF 90300 to 103399 5% CHF 103400 to 114699 6% CHF 114700 to 124199 7% CHF 124200 to 131699 8% CHF 131700 to 137299 9% CHF 137300 to 141199 10% CHF 141200 to 143099 11% CHF 143100 to 144999 12% CHF 145000 to 895800 13% Over CHF 895900 11.5%
Tax Returns	Yes
Financial Year-End Date	December 31
Tax Documents	Not applicable
Corporate Tax	8.5% with additional cantonal-level taxes
Withholding Tax (For Non-Residents)	8%
Payroll Tax	No payroll tax is applicable
Sales Tax	8%
Employers’ Social Security and statutory contributions	Employers contribution: 5.275% Employee contribution: 4.2%
Public Pension	Between 7% to 18%
Medical Insurance	Every citizen of Switzerland is given health insurance to cover the expense of medical care in the event of an accident or illness.

Simplifying Subsidiary Establishment and Operations in Switzerland

Efficiently streamlining the process of establishing a subsidiary in Switzerland and managing essential operations, such as employee recruitment and payroll setup, is vital to accelerate your expansion plans. Factors like the choice of city and location for your subsidiary significantly impact this process, and most companies opt for a limited liability company (LLC) due to its advantages for both the parent company and the subsidiary.

LLCs operate as self-financing entities, adhering to a decentralized business model that helps mitigate the risk of core business loss. To successfully establish your subsidiary in Switzerland, you can follow these essential steps:

Step 1: Register Your Subsidiary

Select a suitable business structure, such as GmbH or AG, and proceed to register it with the Swiss Companies Register. GmbH requires a minimum of two shareholders with a deposit of at least CHF 20,000 in a Swiss account, while AG necessitates a minimum share capital of CHF 100,000. Additionally, the director of the subsidiary must be a Swiss resident.

Step 2: Documentation

Once the required deposits are made in the Swiss account, draft and notarize the association articles. Submit the notarized articles of association, along with the bank certificate, to the registry for incorporation. Lastly, register for VAT to ensure compliance with tax regulations.

Why navigate the complexities of subsidiary incorporation on your own when you can rely on our expertise? We offer tailored solutions to simplify the process and ensure compliance. Explore more about our customized services and entrust Marzuna to manage the intricacies of establishing your subsidiary in Switzerland.