Our guide to Payroll in Switzerland

Doing Business in Switzerland

Switzerland stands as a premier destination for businesses seeking a strategic location in the heart of Europe, known for its economic stability, innovative environment, and high quality of life. As a country with a robust economy, Switzerland is known by its low unemployment rate, highly skilled labor force, and strong financial sector. Renowned for its precision engineering and high-quality manufacturing, Switzerland is home to a myriad of industries including pharmaceuticals, machinery, and chocolate.

The Swiss market is distinguished by its competitive tax rates and business-friendly regulatory environment, making it an attractive destination for international investors and corporations. With its multilingual workforce and a strong emphasis on research and innovation, Switzerland offers a conducive environment for businesses looking to drive growth and innovation. The country's commitment to maintaining a high standard of living, coupled with its strategic location providing easy access to European markets, makes Switzerland an ideal choice for businesses aiming to establish or expand their presence in Europe.

Investing in Switzerland

Switzerland provides a wealth of opportunities for businesses due to its rich legacy of economic resilience with a forward-looking, innovative spirit. The nation's robust economy, powered by a dynamic financial sector and diversified industries, provides a fortress of stability for investors and entrepreneurs alike. This stability is a bedrock for businesses, fostering a secure landscape where ventures can flourish and grow.

Strategically positioned in the heart of Europe, Switzerland is more than just a picturesque destination, it's a pivotal hub connecting you to the vast European market. The nation's top-notch transport and logistics network acts as your springboard, ensuring your business stays connected and agile, ready to leap into international markets.

Innovation isn't just a buzzword in this country; it's the lifeblood that courses through the Swiss industries. From groundbreaking pharmaceutical breakthroughs to precision manufacturing and cutting-edge tech, Switzerland is a melting pot of global corporations and vibrant startups. The government's staunch support for research and development adds another layer of strength to this already dynamic ecosystem.

But it's not all about the work. Switzerland knows the value of a good balance, offering a quality of life that's as impressive as its mountain landscapes. With its commitment to environmental sustainability, safety, and high living standards, it's a place where talent thrives, and businesses can attract and retain the best in the field.

Choosing Switzerland for your business is more than an investment, it's a partnership with a nation that values economic stability, fosters innovation, and cherishes quality. It's where your business can set strong roots and grow, branching out into the European market and beyond.

Foreign investment directives

Switzerland is known for its liberal and open economic policy, creating an environment that is highly conducive to foreign investment. The Swiss government maintains a favorable stance towards foreign investment, offering a framework that encourages economic growth and international collaboration. Here's is an overview of some of the key foreign investment directives in Switzerland.

Non-Discriminatory Policy

Switzerland generally does not discriminate between foreign and local investors. Both are subject to the same conditions, promoting a fair and competitive business environment.

Regulatory Environment

The country has a transparent and reliable legal and regulatory framework. This provides clarity and predictability for foreign investors, ensuring that they can operate with confidence.

Investment Incentives

While Switzerland does not offer extensive investment incentives, the tax system is designed to be competitive and attractive for businesses. Certain cantons offer tax advantages for specific types of investments or operations, particularly those that are innovation-driven or can contribute significantly to the local economy.

Free Movement of Capital

Switzerland supports the free movement of capital, making it easy for investors to transfer funds in and out of the country. This is particularly beneficial for multinational companies that require flexibility in managing their finances across borders.

Property Ownership

Foreign investors have the right to own property and real estate in Switzerland, although there are some restrictions and regulations, particularly for residential properties.

Focus on Innovation and Research

The Swiss government actively supports research and development activities. Foreign companies investing in R&D can benefit from a well-established infrastructure and collaboration opportunities with leading universities and research institutes.

Basic Facts about Switzerland

Full Name: Switzerland

Population: About 9.03 million inhabitants
(World Bank-mid 2024, latest official figures)

Capital: Berne

Major Language(s): German, French, Italian and Romansh

Major Religion(s): Christianity (with growing shares of people reporting no religious affiliation)

Monetary Unit: Swiss Franc

Main Exports: Machinery and equipment, chemicals, pharmaceuticals, watches, textiles and apparel

GNI Per Capita: US $95 (World Bank, 2024 projected to 2026)

Internet Domain: .ch

International Dialing Code: +41

How to Say-basic language

German (predominantly spoken in the central and eastern regions):

Hello: Hallo

Good Morning: Guten Morgen

Good Evening: Guten Abend

Do you speak English?: Sprechen Sie Englisch?

Goodbye: Auf Wiedersehen

Thank you: Danke

See You Later: Bis später

French (predominantly spoken in the western part of Switzerland):

Hello: Bonjour

Good Morning: Bonjour (same as hello)

Good Evening: Bonsoir

Do you speak English?: Parlez-vous anglais?

Goodbye: Au revoir

Thank you: Merci

See You Later: À plus tard

Italian (predominantly spoken in the southern part of Switzerland):

Hello: Ciao

Good Morning: Buongiorno

Good Evening: Buonasera

Do you speak English?: Parla inglese?

Goodbye: Arrivederci

Thank you: Grazie

See You Later: A dopo

Romansh (very rare, spoken in some parts of the Canton of Graubünden)

Hello: Allegra (informal) or Buna di (formal)

Good Morning: Bun di

Good Evening: Buna saira

Do you speak English?: Discuorrast Vus englais? (formal) / Discuorras ti englais? (informal)

Goodbye: A revair

Thank you: Grazia (informal) / Grazia fitg (formal, means 'thank you very much')

See You Later: A pli tard

Registrations and Establishing an Entity

Normally, the companies establish a legal entity in Switzerland; however, it is possible to employ people in Switzerland without a Swiss company. This structure is meant to cover the set-up period, i.e. when a company wants to evaluate the possibility to do some business in Switzerland, before performing any commercial activity. Nevertheless, from the moment the company has one employee registered as “ANOBAG” in Switzerland, the Swiss authorities may claim that the company has a permanent establishment in Switzerland and therefore should be taxed (VAT and profit tax) for the revenue made in Switzerland. This structure is not recommended because it is more complicated to settle with the authorities/social securities. It takes around three to four weeks to set up a company in Switzerland.

Eligibility and different types of registrations and entities

1. Individuals: Anyone over 18, regardless of nationality, can register a business in Switzerland (conditions about work permits reserved). Non-residents must appoint a local representative for certain business forms.
2. Legal Entities: Foreign companies can establish branches, subsidiaries, or representative offices.
3. Permits & Approvals: Depending on the sector (e.g., financial services, pharmaceuticals), you may need special permits from regulatory authorities like FINMA (Swiss Financial Market Supervisory Authority).

Types of Legal Entities in Switzerland

Switzerland offers different business structures, each with its own characteristics, liability rules, and capital requirements.

1. Sole Proprietorship (Einzelunternehmen / Entreprise individuelle)

Suitable for small businesses.

• No legal distinction between the owner and the business.
• Registration in the Commercial Register is required only if turnover exceeds CHF 100,000/year.
• Liability: Unlimited personal liability.
• Capital Requirement: None.

2. General Partnership (Kollektivgesellschaft / Société en nom collectif)

• Formed by two or more individuals.
• Partners have unlimited liability.
• No minimum capital requirement.

3. Limited Partnership (Kommanditgesellschaft / Société en commandite)

• At least one general partner (with unlimited liability) and one limited partner (liable only to their contribution).
• No minimum capital required.

4. Limited Liability Company (GmbH / Sàrl)

• Most popular for SMEs.
• Capital Requirement: CHF 20,000 minimum.
• Owners (shareholders) are publicly listed in the Commercial Register.
• Liability: Limited to the company's capital.

5. Stock Corporation (AG / SA)

• Suitable for larger companies.
• Capital Requirement: CHF 100,000 (minimum CHF 50,000 paid in).
• Shareholders remain anonymous in the public register.
• Liability: Limited to the company's assets.

6. Branch Office (Zweigniederlassung / Succursale)

• An extension of a foreign company.
• No separate legal entity; liability remains with the parent company.
• Must register with the Commercial Register.

Setting up of a Legal Structure

1. Choose the Business Structure
   • Analyze your business goals and choose the appropriate structure based on liability, capital, and flexibility.
2. Register the Company Name
   • Ensure the name is unique and complies with the Swiss naming rules.
3. Prepare the Articles of Association (Statutes)
   • For legal entities like AG and GmbH, you must draft and notarize the articles of association.
4. Open a Bank Account
   • Deposit the required share capital into a Swiss bank account. The bank will issue a certificate of capital deposit.
5. Register with the Commercial Register (Handelsregister / Registre du commerce)
   • Submit the necessary documents to the cantonal Commercial Register office. These include:
     • Articles of association
     • Capital deposit certificate
     • Notarized signatures
     • Information about shareholders, directors, and registered office
6. Register for VAT (if applicable)
   • Registration for VAT is mandatory if your turnover exceeds CHF 100,000/year.
7. Social Security and Pension Fund Registration
   • Register employees with the AVS (AHV) system.
   • Join a pension fund and accident insurance (compulsory for employees).
   • If you have employees, you must also register for unemployment insurance.
8. Sector-specific Permits
   • Depending on your business activity, obtain necessary permits (e.g., construction, finance, health).

Costs of Establishing an Entity

• Commercial Register Fees: CHF 600–1,200 (depends on the canton and company structure)
• Notary Fees: CHF 1,000–2,000 for incorporation documents
• Capital Deposit: CHF 20,000 for GmbH or CHF 50,000 (paid-in) for AG
• Legal and Administrative Services: Variable, depending on complexity

Taxation Overview

• Corporate Income Tax: Between 11.9% and 21% depending on the canton.
• VAT: Standard rate is 8,1 % in 2026
• Withholding Tax: 35% on dividends (reduced under certain treaties).

Typical Timeline

• Preparation Phase: 1–2 weeks
• Incorporation Process: 2–4 weeks
• Total Time: 3–6 weeks

Banking

It is not mandatory to make payments to both employees and the authorities from an incountry bank account. Salary payments and third-party payments can be made on behalf of the client. Payments are usually made using bank transfers. If transfers are made within the same bank, payment is usually within the same day for payments made before 12pm, otherwise payment will be received the next day. The payments in other currencies than CHF will always be received the next day. Transfers between different banks within Switzerland will usually be complete within 2 days. International transfers will take between 1 and 3 working days.

Working Week

The working week in Switzerland is Monday to Friday. The maximum working hours are 45 hours per week for the industrial sector, office staff, technical employees, sales staff in large retail companies, or 50 hours for all other sectors. Between the contractual working hours and the statutory maximum working time, we have contractual overtime. For office staff and other categories of workers, the wage supplement does not apply for the first 60 hours of additional work in excess of the statutory maximum working time.

Employment Law

Holiday Accrual/Calculations & Public holidays

Still in 2026, employees are entitled to at least 4 weeks of paid annual leave per year of service, regardless of work rate. Employees who are aged up to 20 are entitled to at least 5 weeks’ annual leave (many CCL give also this extra week per year for people over 50 years old).

In a nutshell:

• Every employee is entitled to at least 4 weeks (20 working days) of paid vacation per year.

Specific Categories:

1. Young Workers (<20 years old): 5 weeks of vacation minimum (as exposed above).

2. Apprentices: Have the same vacation entitlement as regular employees but often benefit from youth protection rules (e.g., the age and extra leave for school-related reasons).

3. Older Employees & Long Tenure: No statutory extra vacation, but some companies offer additional days for seniority (e.g., +1 day every 5 years), and for example, some national agreement for certain branches of the economy (CCL) give also 5-6 weeks of vacation per year to the employees of 50 years old.

4. Part-Time Employees: Entitled to the same number of vacation days, but paid based on their working percentage.

5. Temporary Workers: Have the same vacation rights, often compensated with an extra percentage in salary instead of paid leave (8,33% for 4 weeks of vacation per year and 10,64% for 5 weeks of vacation per year).

6. Pregnant Employees & Maternity Leave: Vacation days continue to accrue during maternity leave (the maternity leave last 14 weeks minimum).

7. Sick or Injured Employees: Vacation is still owed, but if an employee is sick for a long period, their entitlement may be reduced according to the law.

Key Rules:

• Vacations must be taken and cannot be paid out, except when employment ends.

• The employer decides when vacations can be taken, but must consider employee preferences. In a reasonable delay, like minimum 2 months, employer can determine and tell employee to take their vacation, if not taken yet.

• Unused vacation does not expire immediately but must be taken within a reasonable timeframe.

Public Holidays in 2026 for Switzerland :

Switzerland has four national public holidays observed nationwide in 2026 (Labour Act, art. 20a):, in addition to that there are many canton-specific ones. There are variations between cantons (e.g., Zurich, Geneva), so check locally for your area. These apply across all cantons:

• New Year's Day: Thursday, January 1
• Good Friday (Eastern): Friday, April 3 (except Ticino/Valais!)
• Ascension Day: Thursday, May 14
• Swiss National Day: Saturday, August 1
• Christmas Day: Friday, December 25

Common Local Holidays

These are widely observed but not universal (percentages indicate approximate canton coverage):

• Berchtold's Day (January 2, Friday): In cantons like Zurich, Bern, Vaud (~63%)
• Good Friday (April 3, Friday): Most cantons except Ticino/Valais
• Easter Monday (April 6, Monday): Most cantons except e.g., Neuchâtel, Valais
• Pentecost Monday (May 25, Monday): Most cantons
• St. Stephen's Day (December 26, Saturday): Widely observed

Most cantons have 9 days of public holiday per year. To go further (e.g., paid day off if weekend), consult SECO or each canton websites.

Maternity Leave

Employees are entitled to minimum 14 weeks of maternity leave (16 weeks for Geneva).

If the employee lives in Geneva but work somewhere else in Switzerland, the law of the canton of work applies, so if she works in Vaud, for example, she would have 14 weeks of maternity leave and not 16 weeks.

Maternity leave starts after the birth date and must be taken within 14 weeks of the birth date. Employees must take at least 8 weeks of maternity leave after the birth date and if employees return to work before the 14 weeks, their entitlement will end early.

Employment cannot be terminated by the employer during pregnancy or within the 16 weeks following childbirth.

Employees are eligible to maternity allowance if they have:

• Been insured under the OASI Act during the 9 months before the birth date.
• Been in employment for at least 5 months within 9 months of the birth date.

The rate of payment for maternity leave is 80% of an employee’s average salary, before giving birth, up to a maximum of 220 francs per day.

Additionally, taking unpaid leave before giving birth could adversely affect the amount of maternity benefit to which they are entitled to.

The OASI Compensation Office will pay the maternity benefit to employers which will be paid directly in place of an employee’s salary.

As this benefit counts as income, OASI, DI and IC contributions will be deducted from this benefit.

It is not mandatory but possible to to better than the law so some employers pay full salary during maternity leave.

Paternity Leave

In Switzerland, paternity leave was officially introduced on January 1, 2021.

In a nutshell:

• Duration: 2 weeks (10 working days) of paid leave.
• Eligibility: All employees who are registered in the Swiss social security system (AHV/”AVS”) and are the father or second parent of the newborn child.
• Payment: The leave is paid at 80% of the employee's average salary, with a cap of 220 CHF per day (this is the federal maximum).
• Application: Paternity leave can be taken within the first 6 months after the child’s birth and must be taken as a continuous block (or isolated full days with employer agreement).
• Not mandatory for self-employed individuals but can be claimed if registered with social security.

The OASI Compensation Office will pay the paternity allowance to the employer which will pay directly the employee in place of the salary. As this benefit counts as income, OASI, DI and IC contributions will be deducted from this benefit. It is not mandatory but possible to to better than the law so some employers pay full salary during paternity leave.

Geneva only-Parental Leave (project)

• The parental leave in Geneva was adopted on June 18, 2023, via constitutional amendment for 24 weeks paid leave post-birth/adoption. This was achieved after a long political debate to address the growing demand from families for better distribution of parental responsibilities. The goal was to allow parents to benefit from 24 weeks of paid parental leave in total, to be taken after the birth of a child, with an indemnity of 80% of their salary (up to a certain cap).
• It aimed to promote gender equality by enabling both parents to take leave and better balance work and family.
• The project was widely supported by the people of Geneva through a popular referendum and was implemented with a social insurance-based allocation system, similar to maternity leave, but open to both parents.

Suspended in 2024:

• Federal Block: (May 2024) Federal Council refused guarantee; financing (employer/employee contributions) violated federal LAPG/EOG competence (cantons can't create new IPG schemes independently). The suspension was followed by a process of reevaluation, with local authorities needing to adjust the leave’s provisions to ensure compliance with federal legislation.
• 2026 Status: Still pending-Federal law revision underway allows cantons optional parental insurance soon; Geneva aims for Jan 2027 rollout (16 weeks mothers + 8 fathers*).

*Project Details

• Base: 16 weeks for the mother (including 14 federal + 2 existing cantonal) + 8 weeks for the father/co-parent.
• Sharing: Limited flexibility of ±2 weeks (e.g., mother can transfer 2 of her 16, father can receive them).Non-shareable: The remaining 6 of the 8 paternity weeks stay tied to the second parent. This model supplements the federal baseline without replacing it; still pending final approval for 2027.

Sickness Leave

Sick leave entitlement depends on the number of years’ service in Switzerland and an employee must be continuously employed for 3 months to qualify for payment (as of first day for fixed-term employment contract longer than 3 months). Generally, employers need to obtain a medical certificate after 3 days of absence (employer can request from day 1). (Please refer to the law for protection against dismissal during sick leave).

We have two situations: insurance-based (a) or without insurance scheme (b).

1. Employees can claim payment through an employee’s sickness benefit insurance. Most daily sickness benefit insurances give a right to 80% of the employee’s salary for 720 within 900 days. Conditions and details of waiting period are determined by contract with the insurance.
2. If an employer doesn’t have sickness benefit insurance, employers must continue to pay an employee’s salary, with regional entitlements detailed below, called “scales of the canton”:

National Service

Switzerland requires every Swiss man to serve in the military or in an alternative civilian service. Swiss women can serve on a voluntary basis. Men must complete basic training between the ages of 19 and 25, typically lasting 18 weeks. If not, they have to pay a fine. Protection against dismissal applies 4 weeks before (as of the convocation), during and up to 4 weeks minimum after the end of military service if it last more than 11 days.

Tax & Social Security

The tax year runs from 1st January to 31st December.

People who make their declaration of income to the Tax Authorities have until the end of March to declare the previous year (but delays are possible).

Tax brackets and rates are reviewed and updated annually at the federal and cantonal levels.

Withholding tax tables are also adjusted every year based on inflation, cost of living, and fiscal policy changes.

Income Tax

Every person who is Swiss or has a Residence Permit C has to pay income and wealth tax based on instalments determined by the relevant tax authority according to previous yearly declared income. At the beginning of the following year a reconciliation is done by tax authority when previous tax return is submitted. Income tax is a direct tax that must be paid based on the individual tax return that has to be filed annually. The payment date for tax at source is different among the cantons and depends on the authority. Mostly, the tax at source has to be paid 30 days after receipt of the invoice from the authority. Filing deadlines are usually within less than thirty days after end of reporting period. The penalty for late payment is up to 5%/year of the outstanding/due amount.

Major updates:

Since July 2022, Switzerland has allowed marriage for all, granting same sex couples the same right to marry and access to associated legal benefits as opposite sex couples

In the Swiss vote of 8 March 2026, citizens approved treating married couples for tax purposes in the same way as single individuals, ending the previous tax discrimination against married couples.

Switzerland levies income tax on three levels:

1. Federal Tax – uniform across the country.
2. Cantonal Tax – varies by canton.
3. Municipal Tax – depends on the municipality within the canton.

Tax Rates

The amount of tax depends on the following (not limited to):

• Place of residence (tax tariffs vary strongly within Switzerland)

• Civilian status (Switzerland just accepted

• Religion

• Income/wealth

Cantonal and Municipal Taxes

Cantonal and municipal tax rates can vary widely—ranging from 15% to 30% (federal tax included). Some cantons (e.g., Zug, Schwyz, Nidwalden) are known for low tax rates, while others like Geneva or Vaud have higher rates.

Examples of tax burden by canton (on CHF 100,000 taxable income):

• Zug: ~10–12%
• Zurich: ~18-20%
• Geneva: ~24-27%

Taxation at Source (Withholding Tax)

For foreign nationals (non-permanent residents), Switzerland applies withholding tax on salaries. The tax rate depends on the canton and marital status, ranging between 5% and 25%.

Key factors:

• Marital Status: Higher rates for single individuals.
• Children: Reductions for dependents.
• Religious Affiliation: Some cantons levy church tax.
• Income, based on gross salary,
• Canton

Example: A foreign employee earning CHF 6,000/month in Zurich might face a withholding tax rate of 10–12%, whereas in Geneva, it could be around 15–18%.

Social Security

Social security and payroll deductions in Switzerland encompass contributions towards old age, survivors and disability insurance, unemployment insurance, family compensation fund, occupational accident insurance, non-occupational accident insurance, and pension. The rates for employers and employees vary, and the total contributions ensure funding for various social welfare programs.

The Swiss social security system includes the following five areas:

1. Old-Age, Survivors’ And Disability Insurance (The Three-Pillar System)
2. Insurance Coverage In Case Of Illness And Accident
3. Income Compensation Allowances In The Event Of Compulsory Service And In Case Of Maternity and Paternity (including adoption depending on a number of criteria); also compensation allowances in case of child seriously sick
4. Unemployment Insurance
5. Family Allowances (additional one depending on the state “canton” in Switzerland but the contributions are very low, less than 1%)

Disability Insurance (DI)

Disability insurance is an insurance scheme which offers cover for disabled persons and is compulsory in the same way as old-age and survivors’ insurance (OASI). For salaried individuals, both the employee and the employer pay a contribution which corresponds to 0.7 % of the income subject to compulsory DI contributions (no upper limit).

Occupational Benefit Plan (Pension Fund)

This is a supplementary insurance scheme that ensures elderly, surviving dependents and the disabled can maintain in an appropriate manner the standard of living. The target often cited is that the first and second pillars together aim to provide around 60% of final income over a full working life, but even this remains a theoretical target and is not guaranteed, depending on each personal situation.

Accident Insurance (UVG)

Contribution depends on individual contracts and will be calculated from the gross salary (until CHF 148’200 per year). Premium for UVG during working hours (professional accident insurance) has to be paid by the employer. For the compulsory, non-professional accident insurance, contributions can be deducted solely from the employees’ salary.

Unemployment Insurance (ALV)

2.2% from gross salary (salary until CHF 148’200), paid by employee and employer, 50% each so 1,1% each (update, since 2023, no more additional % from gross salary over CHF 148’200). {The employer has to deduct 1.1% from the gross salary and has to pay the employee and employer part to the authorities.

Payroll

In Switzerland, payroll is processing via dedicated ERP (dedicated software/payroll engine) and payslips are now usually distributed by dedicated secured platforms (HR files available online also for employees), sometimes by protected e-mail (GDPR compliant), but no more paper (mostly). If payslips are available online, regulations on data security have to be observed.

Report

Payroll reports must be kept for at least 10 years.

Payslip Example

New employees

The work contract can have different forms (spoken or written), except specific ones.

If written, it is signed by the employer and the employee and must include at least the following information:

• The name of the employee and the name of the employer
• The date of commencement of the employment relationship.
• The employee’s function.
• The salary and any supplement
• The weekly working hours/rate of activity.
• The address of employer and employee and the place of work is recommended

Those information are required within one month if no full written contract. Oral contracts remain valid (except fixed-term of more than 1 month), but substantial changes (e.g., notice, probation, overtime) need writing. The work contract which are not written may require any modification of some substantial information by writing (like the notice period, the modification of the trial period, agreement on overtime compensation, and so on, see Code of Obligations art. 330b; art. 321 to 340).

Probation is legally one month but excludable or extendable to three by written agreement.

The social security card/number must be shared with the new employer when changing jobs, and to the appropriate administration office when filing claims for benefits. For residents in Switzerland, this number is also reported on the healthcare insurance as it is mandatory to have both (social security number when living/working in Switzerland and healthcare insurance when living in).

Leavers

A registered letter is the most recommended way to terminate employment for employers and must include the following information:

• The complete and correct information (name, address) of employee and employer.
• The details of the employment contract to be terminated.
• The date when the employment relationship will terminate (notice period into account).
• Information obligation on the insurance coverage upon contract termination

Employee’s must provide the following notice periods by law (contract can extend it):

The date of cancellation is always rounded to the end of a month (unless the contract states net months). Notice periods can only be reduced to less than one month by means of a CCL (Collective Convention of Labour) and only in the first year of service.

Employee Benefits

Expenses in a nutshell:

Effective payments (including effective car mileage) may not be included in the payroll.

Lump sum payments have to be included into the salary and social security as well as tax at source must be deducted (if the company has no expense reimbursement policy approved by the tax authority to not be taxed on it).

If the payment refers to the reimbursement of a business expense claims, there are no deduction of tax or social security deductions.

If the employee has a company car, 9.6% per year of the purchase price of the car (0.9% per month of the net list price of the car) has to be included into payroll and social securities as well as tax at source have to be deducted.

Visas & Work Permits

EU/EFTA citizens (now fully including Romania/Bulgaria since 2019 transition) do not need prior work permits—just register locally for stays >3 months. Schengen allows a 90-day Schengen Visa over a 180 days period.

• Foreign nationals do not require a residence permit if they’re employed in Switzerland for up to 3 months or 90 days per calendar year. However, employers must register the employee’s paid employment through the notification procedure for short-term work at least 1 day before employment is due to begin.
• Croatia: Full AFMP since 2023 (no temporary cap in 2026; quotas only hit non-EU/EFTA).
• Foreign nationals who are employed for more than 3 months must apply for a residence permit from the Swiss commune in which they’re living before they start work (within 14 days of arrival).
• Rules stable post-2025 quotas (EU/EFTA unlimited; non-EU capped at 8,500 B/L permits). No major 2026 changes per SEM
• Employees must submit:

• A valid identity card or passport.
• Confirmation of employment from your employer or a certificate of employment (e.g. an employment contract).

Work and residence permit in a nutshell:

For short-term work stays under 3 months in Switzerland, EU/EFTA citizens skip work permits entirely under AFMP free movement rules. Instead, employers use the online notification procedure (via cantonal labor authorities or EU portal) at least 1 day before start—no permit issued, just electronic confirmation. Key Obligation

• Who: Employers posting EU/EFTA workers (detached or short assignments).
• What: Report activity details (worker ID, job, dates, pay) electronically.
• Applies to: Non-EU too for <90/365 days via simplified notification (no quota hit).
• Frees up L/B quotas; proof retained for inspections. Full details on SEM.ch or canton sites.

Key changes for 2026

In 2026, Switzerland underwent significant changes in 2026. Key changes include:

National Minimum Wage in 2026

Switzerland does not have a national minimum wage that applies to the entire country. Instead, minimum wage standards in Switzerland are often set by cantonal (state) governments or through collective bargaining agreements specific to certain industries or sectors. Therefore, the minimum wage can vary significantly based on the region and the specific industry in which a person is employed. An important point to note there is that if there is normally a 13^th salary in the Company, employee paid by hour should have it included in the calculation to verify if the minimum wage is respected (8,33% of the salary basis). Only 5 out of 26 cantons have a statutory gross minimum hourly wage; the others rely on collective agreements (CCL/GAV). Rates vary according to inflation and sector (with exceptions for apprentices and the agricultural sector). For the most current information, it's advisable to consult official cantonal resources or the State Secretariat for Economic Affairs (SECO).

Here's a table representing the minimum wage in 5 cantons in Switzerland where it is mandatory.

Social Security Contributions

• Stable: AHV/IV/EO 5.3% each (total 10.6%); ALV up to CHF 148,200; BVG voluntary; no broad hikes.
• Cantonal tweaks: Geneva AF employer 2.22% (down from 2.25%); maternity 0.029% each (down); Vaud PCFam 0.09% each (up).
• New: 13th AHV pension Dec 2026; women's retirement age 64.5; Pillar 3a retro for 2025; APG online for military.

Income Replacement & Expenses

• Travel deductions: Slight inflation adjustment via "cold progression compensation"; benefits in kind (e.g., car 0.9%/month) unchanged. The DFF adjusted professional expense deductions via cold progression compensation (0.1% IPC rise), but most lump sums saw no change due to minimal inflation; key exception: car travel deduction rose from 70 to 75 centimes/km.

Family Allowances (increase in most canton)

Original 2025 figures outdated; for example per Vaud decree Jan 2026:

• Child: CHF 322 → CHF 340 (+5.6%).
• Disabled/training: CHF 425 → CHF 450.
• 3rd+ child supplement: CHF 43 → CHF 45.
• Birth: CHF 1,617 → CHF 1,700.

Tax Tables

• Annual cantonal updates; progressive 0–45%+ (federal 11.5% flat max).

Home Office/Cross-Border

• No mandatory monitoring of the home office days on the salary certificate yet (but recommended); post-2023 EU/Swiss+FR/IT/DE pacts limit telework 25–40–49.9% days for frontier rules. However, proper documentation is recommended, especially in international contexts or for cross-border commuters, to ensure correct social security deductions and withholding tax calculations. For commuters working in their country of residence between 25% to 49,9%, it is mandatory to announce it to the authorities to get a 3 years authorization, on the federal platform “ALPS”, regarding social insurances contributions..
• Controls start 2027 for 2026 data. As of July 2023, specific agreements between countries applies for social security contributions and obligations to employer to declare home office for Cross-Border Commuters . The controls will be applied as of 2027 for 2026. See our article online on this topic: Telework management for cross-border commuters - ekspert