Employer of Record in Switzerland

An Employer of Record (EOR) in Switzerland is a company that legally hires employees on your behalf. This means you can build a team in Switzerland without setting up a local entity. An EOR handles all the local HR tasks like payroll, taxes, benefits, and compliance with Swiss labor laws. This lets you focus on managing your team's day-to-day work. If you need an EOR provider, consider Rivermate (https://rivermate.com/employer-of-record).

How an Employer of Record (EOR) Works in Switzerland

Using an EOR in Switzerland simplifies hiring. Here is how it works:

• You Find the Candidate: You recruit and select the person you want to hire in Switzerland.
• The EOR Hires Them: The EOR legally hires your chosen candidate under its Swiss entity.
• A Contract is Signed: A three-way agreement is made. It connects you, the EOR, and the employee.
• The EOR Manages HR: The EOR handles all administrative and legal tasks. This includes payroll, social security contributions, taxes, and benefits.
• You Manage the Employee: You manage your employee's daily tasks and responsibilities, just like any other team member.

Why use an Employer of Record in Switzerland

Using an EOR in Switzerland makes expanding your business there faster and easier. It removes the major hurdle of setting up a legal entity, which can be a complex and time-consuming process. An EOR already has the legal framework in place, so you can onboard new employees quickly and compliantly.

Here are some key reasons to use an EOR:

• Enter the Market Faster: You can hire employees and start operating in weeks instead of months.
• Ensure Compliance: EORs are experts in Swiss labor law. They manage all legal requirements, reducing your risk.
• Save Money: You avoid the high costs associated with establishing a legal entity in Switzerland.
• Offer Competitive Benefits: EORs can provide your employees with attractive and compliant benefits packages.
• Simplify Payroll: They handle all payroll and tax administration in line with Swiss regulations.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Switzerland includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Switzerland.

Hiring in Switzerland means tapping into a highly skilled workforce right in the heart of Europe. The country is known for its strong economy, excellent work-life balance, and high salaries. But, the job market is competitive, and you need to understand the local rules. This guide breaks down the key things you need to know to hire talent in Switzerland.

Employment contracts & must-have clauses

While you can have a verbal agreement, a written employment contract is always the best approach for clarity and legal protection. Swiss law gives you flexibility, but some clauses are essential.

Here are the key details your employment contract should include:

• Names: Your company's name and the employee's name.
• Start Date: The official first day of employment.
• Job Title: A clear description of the role and responsibilities.
• Salary: The agreed-upon wage and any other compensation.
• Working Hours: The expected weekly hours.
• Probation Period: The length of the trial period.
• Notice Period: How much notice is required to end the contract.

Probation periods

The probation period is a trial phase at the start of employment. It allows both you and the new hire to see if it's a good fit.

• Standard Length: The first month of an open-ended contract is automatically a probation period.
• Extension: You can agree in writing to extend it up to a maximum of three months.
• Notice Period: During probation, either party can end the contract with seven days' notice.
• Fixed-Term Contracts: There's no automatic probation period for fixed-term contracts, but you can add one in the agreement.

Working hours & overtime

Switzerland has clear rules about working hours to ensure a healthy work-life balance.

Public & regional holidays

Switzerland has only one national public holiday, but each of the 26 cantons has its own set of official holidays.

• National Holiday: Swiss National Day is on August 1st and is celebrated nationwide.
• Cantonal Holidays: These vary significantly from one region to another.
• Common Holidays: Many cantons observe holidays like New Year's Day, Easter, Ascension Day, and Christmas Day.

It's important to check the specific public holidays for the canton where your employee works.

Hiring contractors in Switzerland

You can hire independent contractors for specific projects, but you need to be careful about how you classify them.

An independent contractor is a self-employed individual who works autonomously. They control their own work schedule and often work for multiple clients. They are responsible for their own taxes and social security contributions.

The biggest risk is misclassification. If a contractor is treated like an employee (for example, you control their working hours and they are integrated into your company structure), Swiss authorities can reclassify them as an employee. This can lead to significant penalties, including back payments for social security and other benefits.

An Employer of Record (EOR) can help you avoid this risk. An EOR legally employs the worker on your behalf, taking care of all the local employment requirements. This includes:

• Ensuring compliant employment contracts.
• Managing payroll, taxes, and benefits.
• Mitigating the risk of worker misclassification.

Using an EOR allows you to hire talent in Switzerland without setting up a legal entity in the country, saving you time and reducing compliance headaches.

Paying your team in Switzerland involves understanding a system that's unique in Europe. The country is divided into 26 cantons, or states, and many employment rules change depending on where your employee lives. This means you need to pay close attention to local laws. While Swiss payroll has its complexities, the economy is stable and it's an attractive place to hire.

Payroll cycles & wage structure

In Switzerland, you must process payroll every month. You should pay your employees by the end of each month, with the 25th being a common pay date. Each payment must come with a detailed payslip that breaks down the employee's salary and any deductions.

While not required by law, many companies in Switzerland offer a 13th-month bonus. The terms for this extra salary are usually defined in the employment contract.

Overtime & minimums

Switzerland does not have a national minimum wage. Instead, some cantons set their own minimum pay requirements. For example, cantons like Geneva, Jura, and Neuchâtel have their own hourly minimums.

Any hours an employee works beyond their agreed weekly hours count as overtime. You must compensate this extra time at a rate of 125% of their normal pay. Alternatively, you and the employee can agree to compensation with additional time off.

Employer taxes and contributions

As an employer, you are responsible for contributing to social security funds on behalf of your employees. These contributions are a percentage of the employee's gross salary.

Note: Rates can vary by canton.

Employee taxes and deductions

Employees also contribute to the social security system. You deduct these amounts directly from their paychecks.

Note: Rates can vary significantly based on location and personal circumstances.

In Switzerland, you'll find a strong system of employee benefits and leave entitlements. This reflects the country's high standard of living and focus on social welfare. As an employer, understanding these benefits is key to attracting top talent and ensuring you follow the law. The system is a mix of federal laws and regional rules set by the cantons, which are like states. This means where your employee lives can change some of the specifics.

Statutory leave

Swiss law sets minimum leave requirements for all employees.

• Annual Leave: All employees get at least four weeks of paid vacation per year. If your employee is under 20 years old, they are entitled to five weeks.
• Maternity Leave: New mothers receive 14 weeks of leave paid at 80% of their salary.
• Paternity Leave: New fathers get two weeks of leave, also paid at 80% of their salary.
• Sick Leave: The length of paid sick leave depends on how long the employee has been with your company. In the first year, it's typically three weeks. Many employers have daily sickness allowance insurance that can cover 80% of an employee's salary for an extended period.
• Care Leave: You must provide paid leave for employees to care for a sick family member. This is generally up to three days per event, with a maximum of ten days per year. For a seriously ill child, this leave can be extended up to 14 weeks.

Public holidays & regional holidays

Only one national public holiday applies to the whole country: Swiss National Day on August 1st. All other public holidays vary by canton. This means your employees in different parts of the country will have different days off.

Here is a list of some of the national and more common regional public holidays for 2025:

Typical supplemental benefits

To attract and keep the best employees, many companies offer more than the legal minimum. Here is a look at the difference between what is required by law and what is often offered as an extra perk.

How an EOR can help with setting up benefits

Setting up and managing employee benefits in Switzerland can be complex, especially with the different cantonal laws. An Employer of Record (EOR) simplifies this for you.

An EOR acts as the legal employer for your team in Switzerland. This means they handle all the administrative and legal tasks of employment.

Here is how an EOR can help you with benefits:

• Ensures Compliance: An EOR makes sure you meet all of Switzerland's mandatory benefit requirements. This includes everything from pension contributions to paid leave.
• Manages Administration: They take care of the paperwork and reporting for benefits. This saves you time and reduces your administrative workload.
• Offers Competitive Packages: An EOR can help you create a benefits package that is attractive to Swiss employees. They know the local market and what perks are common in your industry.
• Reduces Risk: By handling compliance, an EOR minimizes the risk of fines or legal issues related to employee benefits.
• Simplifies Hiring: You can hire employees in Switzerland without setting up a local legal entity. The EOR takes care of all the legal requirements for you.

When you decide to part ways with an employee in Switzerland, you need to follow a clear and fair process. Swiss law is flexible compared to many other European countries, but it protects employees from unfair dismissal. You don't always need a specific reason to terminate a contract, but you must respect the agreed-upon notice periods. If an employee asks for a reason, you are required to provide one.

The offboarding process involves several key steps. You'll need to provide a written termination notice, settle all final payments, and issue necessary documents like a work certificate. It's a process that requires careful handling to ensure you meet all your legal obligations and maintain a positive reputation.

Notice periods

Notice periods are a crucial part of the termination process in Switzerland. They are the same for both you and your employee and depend on the length of service.

Here's a simple breakdown of the statutory notice periods:

During a probationary period, which is typically the first one to three months of employment, the notice period is seven days.

It's important to remember that these are minimums. Your employment contract or a collective agreement might specify longer notice periods. Notice is effective from the end of the month in which it is given.

Severance pay

In Switzerland, severance pay is not a general requirement.

However, there are specific situations where it becomes mandatory:

• The employee is at least 50 years old.
• They have worked for your company for 20 years or more.

In these cases, the severance pay is typically between two and eight months of their salary.

How Rivermate handles compliant exits

Navigating the ins and outs of Swiss employment law can be complex, especially for international companies. That's where an Employer of Record like Rivermate can help.

We act as the legal employer, ensuring every step of the termination process is handled correctly and in compliance with Swiss law.

Here’s how we support you:

• Documentation: We draft and deliver valid termination notices and all other necessary paperwork.
• Calculations: We accurately calculate notice periods and final payments, including any outstanding salary, unused vacation, and bonuses.
• Compliance: We make sure you are fully compliant with all local labor laws, reducing the risk of legal disputes.

By partnering with us, you can manage employee exits smoothly and confidently, knowing that all legal requirements are met.

Navigating Swiss visas and work permits can feel complex. Switzerland uses a dual system. This means rules are different for citizens of the European Union (EU) and European Free Trade Association (EFTA) countries compared to citizens from all other countries, often called third-country nationals. For EU/EFTA citizens, the process is more straightforward due to freedom of movement agreements. For third-country nationals, getting a work permit is more challenging and often depends on quotas, specific qualifications, and proving a need that cannot be met by the local or EU/EFTA workforce.

Employment visas & sponsorship realities

An Employer of Record (EOR) can be your legal employer in Switzerland, handling the sponsorship process for work permits. This is a practical route if your company doesn't have a legal entity in the country.

Here is what an EOR can typically sponsor:

• Permit L (Short-term): For contracts lasting up to one year.
• Permit B (Long-term): For contracts of 12 months or more. This permit is renewable.

An EOR cannot sponsor every type of role. Swiss authorities prioritize highly skilled workers, managers, and specialists with university degrees and professional experience.

The sponsorship process for non-EU/EFTA nationals involves these key steps:

1. Labor Market Test: The employer (your EOR) must prove they couldn't find a qualified candidate from Switzerland or any EU/EFTA country.
2. Quota Adherence: Switzerland sets annual limits on the number of permits issued to third-country nationals.
3. Cantonal Approval: The application is first submitted to the authorities in the specific canton (state) where you will work.

An EOR simplifies this journey by managing the application, ensuring compliance with local laws, and handling all the administrative work.

Business travel compliance

For short-term trips, you need to follow the rules for business visitors. This usually means you can stay for up to 90 days within a 180-day period without a work permit. Many nationalities can enter Switzerland for business purposes without needing to apply for a visa in advance.

However, there are strict limits on what you can do on a business trip. You cannot engage in productive or gainful work.

Permitted activities include:

• Attending business meetings
• Negotiating contracts
• Participating in seminars or conferences

Activities like providing hands-on services or direct project work are generally not allowed and would require a work permit, even for a short duration. Always check if your planned activities are compliant to avoid any issues.