Employee Benefits in Switzerland: All You Need to Know

Beyond the stereotypes of the watches, chocolate, and cheese, the Swiss Confederation is home to one of the world’s most advanced service-based economies with a highly educated, skilled, and globally fluent workforce. Any business open to international talent will find a wealth of experience in this land of alpine beauty.

However, Swiss employees enjoy some of the highest pay rates and living standards in the world. That means you’ll need a strong and globally competitive benefits package (and solid compensation rates) to stand a chance of attracting top-quality Swiss talent.

Apart from understanding the compensation package you’ll need to offer, you also need to ensure you keep compliant with all associated employment legislation in Switzerland.

In this article, you’ll learn:

• How to classify workers and determine if they’re entitled to benefits

• The mandatory benefits you must offer to Swiss employees

• Additional benefits that can help you hire and retain high-quality talent, and

• How to manage hiring internationally in the age of remote work

Who is entitled to benefits in Switzerland?

Switzerland classifies workers into employees and independent contractors. Those workers deemed as employees are entitled to every benefit stipulated under Swiss labor laws.

It’s important to understand how to classify the role of the team member whose services you’re employing. Regardless of whether you view a worker as an employee or a contractor, legislators will make the only determination that matters. You must comply with local classification rules or you’ll open your company up to the serious risks of misclassification and any subsequent fines or penalties.

For more detailed information about understanding this concept, be sure to read our dedicated guide to misclassification.

However, that shouldn’t prevent you from offering a benefits package to your Swiss contractors just because this isn’t mandated.

If you value your contractors, benefits can build strong trust and connection with your business, especially in a remote context. You do still need to be careful of triggering permanent establishment or misclassification dangers with the type of benefits you provide.

Value-based benefits like paid time off, flexible working hours, and parental leave provisions can often keep you on the safe side of this legislation (more on this in our guide to offering benefits to international contractors). An employer of record (EOR) like Remote should be able to give you more specific advice to minimize associated risks according to the employment legislation of Switzerland (or any other nation).

Statutory and common employee benefits

Statutory benefits, also known as mandatory benefits, are entitlements that employers are obligated by law to provide to their employees. Common examples include benefits like paid annual leave, parental leave, worker's compensation insurance, and paid sick leave.

Switzerland has consistently topped the list of the world’s happiest nations and it’s home to some of Europe’s best-compensated workers.

The Swiss Confederation mandates universal health insurance coverage, generous parental leave, and a wide range of safety nets that make it easier to build a rewarding career. The strong history of Switzerland’s banking, diplomacy, and international relations industry have helped drive impressively high labor standards.

In other words, not only is it mandatory to take care of your Swiss workforce, but you’ll need to offer more than just the basics to break into the Swiss labor market.

Leave entitlements in Switzerland

Swiss employees who’ve been employed for at least a year are entitled to a minimum of four weeks of fully paid vacation annually, rising to five weeks for employees below the age of 20.

Additionally, longer vacations can be negotiated individually or collectively, and employers cannot make any payment in place of vacation.

Maternity and paternity leave in Switzerland

Pregnant employees are entitled to 14 weeks of paid maternity leave. During this period, the employee earns a maternity benefit equivalent to 80% of her normal wages, capped at 196 CHF ($212) per day, or about $20,776 over the course of her maternity leave.

Fathers are entitled to two weeks of paid paternity leave within six months following their child’s delivery. Paternity benefits are similar to maternity benefits, i.e., 80% of the father’s wages, capped at 196 CHF per day, or about $3,000.

Paternity leave can be split however an employee prefers within the six-month window it lasts.

Employees can take up to 14 weeks of childcare leave to nurse sick or seriously injured children with benefits paid out by social security. In addition, employees are entitled to mandatory childcare leave of three days at a time (capped at ten days annually) during which they can stay back to nurse sick children.

Pension plans and retirement contributions

Employers who have a permanent presence in Switzerland are obligated to pay social security payroll taxes alongside their employees. The tax rates differ by canton and rates range anywhere from 9.463% in Geneva to as high as 23.40% in Zurich.

These payroll contributions cover pensions, unemployment insurance, disability, and work-related injury insurance.

Minimum wage

Swiss voters have repeatedly rejected attempts to institute a federal minimum wage and wages are generally determined by collective bargaining.

In the past decade, three Swiss cantons have instituted minimum wages ranging from 19 CHF ($20.64) per hour in Ticino to 23 CHF ($25) per hour in Geneva— the highest anywhere in the world.

Overtime

Swiss labor law differentiates between regular overtime and so-called ‘Extra Hours’. Overtime generally covers any extra time spent working hours stated in the employment contract. Overtime usually comes into play when an employee’s maximum working hours are less than the government’s mandatory maximum of 45 - 50 hours per week.

For example, if an employee is contracted to work for 37 hours per week. Any work that exceeds 37 hours per week would be considered overtime, as long as it doesn’t exceed the statutory maximum of 45 - 50 hours per week.

On the other hand, extra hours refer to any time worked past the government’s stipulated working hours.

Regular overtime and extra hours must be compensated with time off in lieu of overtime or a 25% premium in addition to the employee’s normal wages.

Insurances

Private health insurance is mandatory for all Swiss citizens and residents, i.e., the local government can automatically have you signed up for private health insurance if you don’t take the initiative.

In addition, all employees are covered by their employers’ occupational accident insurance which caters to any accidents an employee may be involved in on and off the job.

Since employers aren’t required to provide health insurance in addition to occupational accident insurance, offering health insurance as a benefit can act as a huge incentive for potential Swiss hires.

Remote recommends you strongly consider adding health insurance coverage to your packages to help you attract and retain the best Swiss talent.

Benefits & Leave —

2 min

[Webinar Recording] Managing a global benefits plan

In this one-hour webinar, you’ll get a crash course on all things global benefits, as well as a lively Q&A with real questions from business owners hiring around the world.

Additional benefits to consider for Swiss employees

For decades now, Switzerland has trended high on global rankings measuring human development, happiness, workforce satisfaction, and work-life balance.

In such a competitive labor market, the right mix of benefits and perks will make working with you an appealing option for the talent you’re looking to hire.

Private health insurance

Switzerland requires all citizens and residents to maintain a private healthcare plan.

On average, Swiss employees aged 26 and above pay 396 CHF ($425) per month or roughly $5,000 for health insurance per year. Taking some of that financial obligation off your employees will put more of their after-tax earnings back into their pockets and will no doubt reduce turnover and motivate employee loyalty.

Competitive salaries

Switzerland is home to the world’s highest earners and accordingly, Swiss employees have grown to expect high salaries as the default.

On average, Swiss graduates expect an entry-level salary of just over $84,000 per year. That’s more than double the average entry-level salary for U.S. graduates which sits at $40,153 per year.

In other words, paying a competitive salary may not be compulsory by law. But without a nationally competitive offer, you’re unlikely to lure a top-notch Swiss candidate.

Cost-effective benefits and perks

If you’re a smaller business looking to delight your global workforce without breaking the bank, our small business benefits guide will help you explore cost-effective alternatives that will still appeal to remote employees.

As our soft benefits guide explains, remote workers are conditioned to expect perks that may not be statutory, and offering them gives you an edge in a global labor market where businesses can hire anyone across the world. Flexible working hours, equipment provisions, co-working allowances, and gym memberships can be inexpensive but highly valued perks for Swiss employees.

Creating a competitive and compliant global benefits package

You need a strategy that’ll help you offer competitive international benefits to attract top talent. And remember that no matter how many additional perks you offer, you’ll struggle to attract top-quality global talent if your offer doesn’t include an internationally competitive salary.

Develop a global benchmarking system to pay your employees a salary that competes with the global industry average wherever you’re hiring. Remote’s guide to calculating global compensation details a number of mechanisms you could consider creating fair and competitive offers.

In a global labor market, doing the bare minimum for your employees just won’t cut it any longer. Remote can also help you customize a global benefits plan for your team so you can hire and retain the best brains from across the globe in a way that suits your company.

How to set up and manage benefits for international employees

A global employment partner can help you automate all the time-consuming manual work involved with international hiring. An employer of record (EOR) like Remote can manage all the complicated compliance requirements, so you can focus on growing your business.

By partnering with Remote as your global EOR, you can scale your team across borders without worrying about any of the headaches.

Our team of HR specialists are on the ground in every continent. We become your local experts, building culturally aware employment packages that don’t just meet minimum statutory requirements in each country of operation. We enable you to find, attract, and retain the best global talent, and we help you build trust with your global team.

When should you use an employer of record?

An EOR can help you streamline and scale global growth right away. Remote’s EOR service provides you with the service of dedicated local employment experts to offer the insight you need to create a competitive benefits package in Switzerland and other global markets.

The partnership will also give you the foundation to develop compliant employment contracts and HR processes at scale.

We’ve previously dedicated an entire guide to when should you use an employer of record, but there are a few particular instances where an EOR will immediately help you minimize cost, time, and risk:

• Establishing a compliant employment contract for a new hire

• Creating a strong local or global compensation and benefits package

• Managing the delivery of benefits for a new hire in compliance with all local labor laws

• Terminating an employee in compliance with local employment regulations, and

• Protecting any IP & patents produced by your remote employees

An employer of record like Remote manages the tricky parts of international HR. You can learn more about how Remote simplifies hiring in Switzerland, and we can help you build a more connected, motivated, and powerful global team.