🇨🇭 Hiring in Switzerland

💡 Everything you need to know to hire and manage employees in Switzerland through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.

At a Glance

Onboarding a New Hire

Plan for 7-10 business days between submitting a new hire and their start date. Payroll registration must be completed at least 5 business days before the hire date, which Toku handles, including enrollment in social security, occupational pension, and accident insurance.

Submit the new hire through the Toku platform for the employment agreement, statutory registrations and payroll setup. See Onboard Contributors as a Client Admin in Toku for the steps. Toku will confirm the expected onboarding timing for your hire.

Employer Costs

On top of gross salary, employers in Switzerland pay:

As a rule of thumb, total cost of employment is roughly 110-115% of gross salary, depending on the canton, the accident risk class, and the pension plan. A 13th month salary is not required by law but is very common in Switzerland; where agreed in the contract it becomes binding, so factor it into your annual salary budget.

Employees pay their own share too: 5.3% AHV/IV/EO, 1.1% unemployment insurance, 1-4% non-occupational accident insurance, their portion of pension contributions, and income tax (withheld at source for foreign employees without a C permit; Swiss nationals and C-permit holders generally pay tax by annual assessment). Health insurance is mandatory but purchased individually by residents and does not run through payroll. These employee amounts come out of gross salary, not on top. Toku calculates and remits all of the above.

Compensation & Payroll

Toku runs one payroll per month in Switzerland, and employees receive a detailed payslip each cycle showing gross salary, deductions, and net pay. There is no federal minimum wage, but five cantons set their own hourly minimums in 2026: Geneva (CHF 24.59), Basel-Stadt (CHF 22.20), Jura (CHF 21.40), Neuchâtel (CHF 21.35), and Ticino (CHF 20.00-20.50, varying by sector). Sector collective agreements can also set binding pay floors. All salaries are paid in CHF.

Employment Contracts & Probation

• Toku issues a compliant local employment agreement for every hire.
• Indefinite-term contracts are the standard form of employment. Fixed-term contracts end automatically on the agreed date, but repeated back-to-back fixed-term contracts are not permitted and can be reclassified as indefinite.
• Probation is 3 months per Toku's employment agreement. During probation, either party may terminate with 7 days' notice, effective from any day.

Working Hours

The standard working week is 40-44 hours depending on the contract and sector. The legal maximum is 45 hours per week for office, technical, industrial, and large retail staff (50 hours in other sectors). Hours worked beyond the legal maximum must be compensated at 125% of the regular rate or with equivalent time off; for office and technical staff, the 25% surcharge applies after 60 excess hours in a calendar year. Employees are entitled to a minimum daily rest of 11 consecutive hours and mandatory breaks during the workday.

Leave Entitlements

At least two consecutive weeks of annual leave must be taken each year, and leave cannot be paid out in cash except on termination. Maternity, paternity, and adoption leave are funded by the federal loss-of-earnings scheme rather than by you as the employer.

Public Holidays (2026)

Only Swiss National Day (August 1) is a federal public holiday; all others are set by each canton, and the total ranges from 8 to 15 per year depending on where your employee lives. The most commonly observed holidays are:

Holidays falling on a weekend are generally not replaced with a substitute weekday off.

Benefits

Swiss law mandates two employer-provided benefits: accident insurance (UVG) and an occupational pension (BVG). Toku also provides complementary accident insurance and sickness daily allowance insurance through Zurich. All four are set up automatically, and Toku handles enrollment, payroll deductions and claims coordination. The state old-age and disability pension (AHV/IV, the first pillar) runs through payroll as shown in Employer Costs above. Health insurance is mandatory for all residents but arranged and paid individually, outside payroll.

Benefits at a Glance

Accident Insurance (UVG)

Mandatory coverage for work-related accidents, commuting accidents, occupational diseases, and non-work accidents for employees working at least 8 hours/week. Coverage applies from day one, during working hours and personal time. The occupational portion is 100% employer-paid; the non-occupational portion (NBU) is deducted from the employee's salary via payroll. UVG pays 80% of the insured salary (capped at CHF 148,200/year) from the 3rd day after an accident. Non-occupational cover ends on the 31st day after entitlement to at least half salary ends; departing employees can extend it for up to 6 months with Zurich's interim insurance (Abredeversicherung) at CHF 40/month.

Complementary Accident Insurance

Toku adds complementary accident insurance with Zurich on top of UVG. It covers a private hospital ward and full treatment costs abroad, pays 80% of the salary above the UVG cap (CHF 148,200, up to CHF 300,000) from day 31, pays lump sums on disability (2× insured salary, pro rata to the degree of disability) and death (1× insured salary), and covers UVG benefits that are cut for gross negligence or high-risk activities.

Sickness Daily Allowance Insurance

Employees are covered by a group sickness daily allowance insurance with Zurich. If illness leaves them unable to work, it pays 80% of salary (AHV salary, capped at CHF 300,000/year) for up to 730 days per case after a 30-day waiting period, coordinated with the BVG plan. Cover starts on the first day of employment (if the employee is fully able to work) and ends on the last day of work. Departing employees who live in Switzerland or Liechtenstein can transfer to Zurich's individual insurance within 90 days without a new medical exam.

Occupational Pension (BVG)

Employees are automatically enrolled with AXA (backdated to start date) if they are 18 or older, earn more than CHF 22,680/year, and have a contract of at least 3 months. Retirement savings begin on 1 January after the employee's 24th birthday. Contributions are age-banded on the pensionable salary and split 50/50 between employer and employee:

Pensionable salary = the employee's full AHV annual salary. Toku's plan applies no coordination deduction (e.g., CHF 80,000 gross → CHF 80,000 pensionable). The employer's 50% is billed to you; the employee's 50% is deducted from payroll.

Two figures are often confused here. CHF 90,720 is the upper limit of the mandatory BVG insured salary for 2026, where a statutory-minimum plan stops. CHF 907,200 is the maximum insurable salary under Swiss law for 2026. Toku's AXA plan insures salary above CHF 90,720, up to the CHF 907,200 legal maximum.

Plan benefits include retirement capital with annual BVG-linked interest (pension or lump sum at retirement), a disability pension with continued contributions during disability, and survivor benefits (spouse/partner pension, orphan's pension, lump-sum death benefit where applicable).

What You Need to Know About Benefits

• UVG and BVG are statutory, so they can't be opted out of. Plan the employer-side costs (occupational accident premium and half of BVG) into every Swiss hire.
• First-month payroll may use estimated pension deductions that are trued up once final BVG figures are confirmed.
• For illness or accidents, the employee notifies their manager and Toku, submits a doctor's certificate on the 3rd day of absence and a new one each month, and Toku coordinates the claim with Zurich.
• When an employee leaves, Toku sends them Zurich's information on extending accident cover and continuing sickness insurance individually. For the full employee-facing detail of each plan, see Switzerland Pension & Accident Insurance, which covers the AXA occupational pension plan, UVG accident insurance, complementary accident insurance and sickness daily allowance insurance Toku provides for Swiss employees.

Common Extras

Other common extras include enhanced pension contributions above the legal minimum, supplementary health insurance, additional leave days (25 or 30 days is common at larger employers), and public transport or meal subsidies. Toku can advise on the cost impact of any of these.

Ending Employment

Switzerland allows termination without stated cause, but dismissals can be ruled abusive (with compensation of up to six months' salary), and notice given during protected periods such as illness or pregnancy is void, so involve Toku early if you are considering ending an employment relationship. For the process, see How to Terminate an Employee or Contractor.

There is no general statutory severance in Switzerland. The only statutory exception is for employees aged 50 or over with at least 20 years of service (2-8 months' salary), and employer-funded pension benefits can usually be offset against it. Negotiated separation payments are common for senior employees.

Annual Leave at Termination

This section describes statutory annual leave. Any additional contractual or company-provided leave above the statutory minimum may follow different carryover, expiry, or payout rules under the employee's agreement or applicable policy, subject to local law.

Statutory leave termination payout: Conditional. Outstanding vacation should generally be taken rather than paid during employment, but cash compensation becomes relevant if the leave cannot reasonably be taken before employment ends.

Statutory carryover / look-back: Unused vacation may remain claimable subject to limitation rules rather than disappearing automatically at calendar year-end.

Admin responsibility: When a termination is planned, assess the unused balance early and work with Toku to determine whether vacation can reasonably be scheduled during the notice period.

Important exceptions: Vacation should not automatically be substituted for notice. The length of notice, amount of leave, employee circumstances, and reason leave remains unused can affect whether taking leave during notice is reasonable.

See the Annual Leave / PTO Carryover & Termination Payout Guide for the cross-country framework.

Hiring Someone from Overseas?

EU and EFTA nationals can live and work in Switzerland under the free movement agreement, subject to registration. Other nationals need a work and residence permit (typically an L or B permit), which is subject to annual quotas and a labor market test, with processing taking several weeks to several months. Talk to Toku before extending an offer to a candidate who needs sponsorship.

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Last updated November 5, 2026 (onboarding link only). Last verified October 2026 (benefits per Aon factsheet, valid 1 January 2026). This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.