Switzerland

Employer of Record in Switzerland

Skuad’s Switzerland EOR (Employer of Record) solution caters to your business expansion needs in Switzerland without requiring you to set up an entity. Switzerland, officially known as the Swiss Confederation, is the Federal Republic comprising 26 cantons or states. Switzerland is known to many as a tax haven as it houses some easy tax laws that help run any business. When looked at from the outside, it may seem complex, but there are many similarities in their methods with other countries.

Skuad’s strong global network and an automated human resource (HR) platform ensure the quick onboarding of remote teams, management of their payrolls, and formalization of contracts in compliance with the local laws. Learn more about Skuad’s EOR solutions and how you can leverage the assistance of an international network of experts.

Switzerland at a Glance

Population: 8.9 million

Currency: Swiss franc (CHF)

Capital City: Bern

Languages spoken: German, French, Italian, Romansh

Gross Domestic Product (GDP): USD 818.43 billion

Employment in Switzerland 

What You Must Know Before Employing in Switzerland

Switzerland is a developed country that caters well to businesses of all sizes. The benefits of starting a business in Switzerland are as follows.

• Strong economy and currency: You get to work in a strong and financially independent country.
• Head offices of many multinational corporations (MNCs): Switzerland houses many MNC offices with a vibrant business atmosphere.
• Efficient and reliable administration: The efficient workflow and processes enable hassle-free work.
• Liberal labor market: The rules are simple and workable for employers, easy to follow, and organized in a manner that makes processes run smoothly.
• Liberal tax system: Switzerland has one of the most liberal tax systems. The tax rates are low to moderate, and people can keep more of what they earn.
• Politically stable country: The country does not undergo frequent changes in rules and regulations.

The Swiss employment law is liberal compared to other European countries, primarily about terminations of employment contracts. However, to set up any legal entity or part of your business in Switzerland, a company needs to check Switzerland’s legal and operational aspects. The Switzerland legal requirements are well-structured and categorized between federal and cantonal levels. To mitigate the challenges of getting into any trouble while setting up your business entity, connect with a local expert in employment laws in Switzerland. The table below lists a few employee entitlements under employment laws.

To know more about the country’s employment costs and policies and ensure your expansion efforts meet the legal requirements, connect with Skuad experts today.

Contractors vs. Full-Time Employees

You may have an idea about the kind of employment contract you would prefer when doing business in Switzerland. Whether contractual or full-time, both types of work agreements have their advantages and disadvantages. Hence, a decision should be made based on your business requirements. The salary should be stated in CHF for both types of contracts. 

If you wish to get a temporary entity set up in Switzerland, then contractual work is the best option. Otherwise, if the business is expanding in this location, then consider hiring full-time employees. 

Check out the characteristics of full-time work in Switzerland.

• A high degree of directionality
• Fixed working hours, fixed working checks, duty to appear regularly in the office
• Allocation of a workspace
• Agreement of a probationary period
• Subordination with other persons/charge
• Periodic remuneration

The characteristics of contractual work in Switzerland are,

• Lack of subordination
• Possibility to terminate the legal relationship as per your wish
• Limitation of the work-load
• Provision of materials and tools

Whether your organization requires contractors or full-time employees, Skuad’s EOR solution can cater to all your hiring requirements. Learn more by talking to Skuad experts.

Hiring in Switzerland

There are two main laws concerning employment in Switzerland,

1. Code of Obligations (Articles 319 to 362)
2. The Labor Act

In addition, there are provisions for collective bargaining under the Collective Labor Law. Applicants apply for jobs in Switzerland through different job portals such as,

• LinkedIn
• Indeed
• Adesso
• Monster

Employees are required to have their curriculum vitae/resume, cover letter, and educational certificate. The applicants are required to write the cover letter and other application details in the language as specified on the job portal by their employer. 

You can get help from Skuad to hire professional talents in Switzerland by following all the Swiss work laws. Book a demo today.

Probation & Termination in Switzerland

Probation Period

The standard probation period in Switzerland lasts between one and three months. Once the probation period is over, the employee is entitled to benefits and other entitlements given in the contract. Although there is no protection for the employees in case of any dismissal related to illness, pregnancy, or accident. The employment contract can be terminated during probation through a seven-day notice. 

Termination of Service

Either the employee or the employer can terminate the contract. This can be due to, 

• Through mutual agreement 
• By either party’s initiative 
• Due to the death of the employee
• After the expiry of the contract 
• For other reasons that are justified

The notice period can range from one week to two months, depending on the employee’s service length.

There are no legal severance package allowances, but it is left at the discretion of the company. Usually, most companies provide severance allowances for employees over 50 years who have worked for more than 20 years. 

To know more about probation and termination in Switzerland, Book a demo with us.

EOR Solution in Switzerland

An EOR solution for Switzerland makes it beneficial and easier for businesses to expand in the country while maintaining all legal requirements. Choosing the EOR route ensures that your expansion entity is compliant with the processing of payroll and other employment responsibilities. Skuad helps you manage contracts, work permits, taxation, monthly payroll, taxes, and visas in Switzerland for your employees.

Outsourcing Employment Through an Employer of Record

When you have decided to expand your business entity in Switzerland, you need to keep various factors in mind. When your business is scaled up in a different country, you will also have to deal with the local administrative and work laws in that country. These can be complex. Hence, it is better to hire a local payroll agency that understands the local working laws and takes care of them.

Skuad can offer tailor-made EOR solutions for all your expansion needs. To avail yourself of our services, speak to Skuad experts today.

Types of Visas In Switzerland

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

Talk to us and get more information and guidance related to types of visas and work visa requirements in Switzerland. Skuad can handle all your visa requirements and ensure the expansion process is not delayed.

Work Permit

Skuad’s local partner in Switzerland sponsors foreign workers for work permits. As a reputed EOR service in Switzerland, Skuad takes care of all the responsibilities and requirements related to work permits. The table below answers a few pertinent questions.

To know more about work permits in Switzerland and how Skuad can secure them for you, speak to our experts today and kick-start your expansion.

Payroll & Taxes in Switzerland 

Things You Must Know To Set Up Payroll In Switzerland

You must be aware of the rules and regulations that guide Switzerland's employment contract before opening up your business entity here. To recruit employees in Switzerland and manage their compensation and other benefits following the local labor legislation, foreign companies must set up a payroll. This can be done in one of the following four ways.

• Incorporating a separate legal entity and handling the payroll management with an in-house HR department. 
• Setting up a remote payroll by adding your Georgian employees to your parent company’s payroll.
• Payroll outsourcing in Switzerland in collaboration with a local company that handles HR tasks but leaves you in charge of liabilities. 
• Payroll outsourcing in Switzerland with a global EOR service such as Skuad, which can handle your payroll while ensuring total compliance with local laws.

Taxes in Switzerland

Taxation and payroll processing are important parameters that businesses consider before expanding into a new region. Book a demo with Skuad for proper guidance about the critical aspects of business expansion in Switzerland.

Incorporation: How to Set Up a Subsidiary in Switzerland

Establishing a subsidiary in Switzerland and managing processes such as operations, hiring employees, and setting up payrolls may take a significant time and delay your expansion. While setting up a subsidiary in Switzerland, you need to consider factors such as the city and location of your subsidiary. A subsidiary can be a branch office, a limited liability company (LLC), or an offshore company, among other options. Most of the companies go for LLC, as it is beneficial for the parent company and the subsidiary as well.

Subsidiaries are self-financing and a decentralized business model. Therefore, it becomes easier to contain and mitigate the chances of core business loss by working with subsidiaries, and you can open your business subsidiary in Switzerland. To establish a subsidiary in Switzerland,

• Step 1: Register your Subsidiary: A subsidiary is registered as GmbH or AG with similar process models. It is mandatory to register with the Swiss Companies Register. At least two shareholders with a minimum deposit of CHF 20,000 in a Swiss account can form GmbH. Also, the director needs to be a Swiss resident. In the case of AG, the minimum share capital is CHF 100,000.
• Step 2: Documentation: After the deposits are made in the Swiss account, the association articles should be drafted in front of the notary. The next process is to deposit the notarized articles of association and incorporate the company and bank certificate into the registry. Finally, you can register for VAT.

Why bother getting into the nitty-gritty of subsidiary incorporation when Skuad can do it for you? Know more about our customized solutions now!

Professional Employer Organization (PEO)

A professional employer organization (PEO) collaborates with medium- and small-sized organizations to provide HR services. A PEO handles various HR services such as recruitment, payroll, training, and other HR tasks. An EOR also provides similar HR services; however, the difference lies in the arrangement or association between the outsourcing company and the business.

A PEO acts as your co-employer, whereas an EOR service acts as the legal employer of your employees. The latter assumes all the responsibilities and liabilities of your remote team. You can outsource a specific HR function or end-to-end activities. 

Further, an EOR service allows you to expand your workforce without setting up a business entity. It handles payroll funding, worker’s compensation, and unemployment claims and reports. It files taxes under its file ID number. 

Skuad can help you with both EOR and PEO services. Our team of experts handles all HR-related services with efficiency and dedication. We strive to understand your needs and end goal to help grow and expand your business. Our bespoke services will save you precious time and money. Book a demo with Skuad experts to learn more about our EOR solution for Switzerland.

Conclusion: What Gives Skuad’s Switzerland Solutions an Edge?

Businesses looking to expand their workforce in promising regions may find Switzerland an attractive destination especially if you have an EOR service such as Skuad as a partner. Its one-of-a-kind EOR solution lets you streamline and expedite your global expansion process. 

Skuad has an extensive network in 150+ countries across the globe and provides a single interface to onboard and manage employees and contractors. It offers consistent prices irrespective of the location and manages the payment of your team through a single invoice. It also ensures that your IP, invention rights, and sensitive employee details are fully protected wherever you operate.

Book a demo with Skuad experts to know more.

FAQs

1) What is an employer of record in Switzerland?

In Switzerland, an Employer of Record (EOR) is a service used by companies to employ staff on their behalf without setting up a legal entity in Switzerland. The EOR takes on the legal responsibilities of employment, including compliance with local labor laws, payroll, taxes, and employee benefits administration. This allows companies to operate in Switzerland while minimizing the legal and administrative burdens.

2) What is the employer tax in Switzerland?

In Switzerland, employer taxes include contributions to social security systems such as old age and survivor’s insurance (AHV), disability insurance (IV), and unemployment insurance (ALV). Typically, these contributions amount to around 12% to 15% of the employee's gross salary. Additionally, depending on the canton, employers may also need to pay family allowances and accident insurance.

3) Is the 13th month of pay mandatory in Switzerland?

The 13th-month pay is not mandated by Swiss federal law but is a common practice across many industries. It is typically paid out at the end of the year and is often considered part of the total annual salary package. Whether it is provided or not can depend on the employment contract or the applicable collective bargaining agreement.

4) What is the employment contract in Switzerland?

An employment contract in Switzerland must specify terms such as the job description, salary, working hours, and notice periods. It can be either written, verbal, or implied, although a written contract is recommended for clarity. Contracts must comply with the Swiss Code of Obligations, which protects employee rights including minimum leave, protection against unfair dismissal, and sickness benefits.