By Payrollplus, 6. September 2022
For your company to grow, you need employees. But anyone who wants to hire staff must understand how the hiring process works and what to look out for. This guide tells you everything you need to know about hiring employees in Switzerland.
When hiring an employee, the first step is to conclude an employment contract. Under current Swiss law, an employment contract may be entered into orally, in writing, or tacitly.
By concluding the contract, the employer undertakes to pay a salary, to remit social insurance contributions, and to grant paid vacation. The employee undertakes to perform the work specified by the employer. After the contract is concluded, the employee is also bound by duties of loyalty and due care
An employment contract should include at least the following:
You must also check whether your company is subject to a collective employment agreement (CEA; GAV in German). If so, the CEA’s provisions must be observed. You can obtain details from trade unions, your employers’ association, the cantonal employment office, or the State Secretariat for Economic Affairs (SECO).
If you want to hire an employee, you must decide whether the employment relationship should be fixed-term or open-ended—that is, whether it will last for an indefinite period or only until a specific date.
If you only need someone to temporarily cover for another employee or for the duration of a project, a fixed-term contract is advisable. If you want to retain someone longer term, an open-ended contract is recommended.
You must also decide on the form of employment. Common options include:
The “typical” form of employment, usually a 90–100% workload. Full-time employees generally have open-ended contracts.
There is no single legal definition of part-time work. The Swiss Labour Force Survey (SLFS) defines it as a main job with a workload below 90%. In other words, a reduced full-time workload.
Like part-time, this is a reduced workload—but performed in addition to a main job. Many employment contracts require the employer’s approval before an employee takes on a secondary job.
Students who work for a company alongside their studies, typically in a field related to their degree.
In Switzerland, mini-jobs are “minor employment” where the annual salary does not exceed CHF 2,500 (as of 2025).
Internships give learners short-term exposure to a company and the world of work. Interns usually bring limited specialist knowledge but also incur lower costs. In the long run, interns can develop into valuable employees.
If you wish to hire foreign employees, first check whether a notification (registration) or a permit is required.
As a rule, employees from EU/EFTA countries must be registered if their work does not exceed 90 days per calendar year. Registrations are made via the website of the State Secretariat for Migration (SEM).
If an EU/EFTA employee will work more than 90 days per year, a permit is required. For third-country nationals, a permit is required regardless of duration. The employer must submit the permit application to the competent cantonal labour market authority.
Holders of a settlement permit (Permit C) are exempt from the permit requirement.
If you employ foreign employees resident in Switzerland (i.e., without a Permit C) or employees resident abroad, you must deal with withholding tax (impôt à la source).
Unlike ordinary taxes, withholding tax is deducted by the employer directly from the salary before payment. The employer must notify the competent tax authority of the employment of people subject to withholding tax within 8 days of their start date.
Growing companies can’t avoid hiring. Sooner or later, new employees are needed. What is often forgotten is that hiring comes with costs.
To provide more transparency, here is a rough overview of potential costs you may face when hiring, split into direct and hidden costs for clarity.
As you can see, some costs aren’t obvious at first glance. This raises the question: does leaving a position vacant cost more than hiring someone new?
Persons gainfully employed in Switzerland must pay contributions to the first pillar: old-age and survivors’ insurance AHV/AVS, disability insurance IV/AI, and income compensation EO/APG. The obligation begins on 1 January after the 17th birthday. It ceases when gainful activity ends.
AHV contributions are paid half by the employee and half by the employer. The employee’s share is deducted from salary and paid in together with the employer’s share.
In addition to AHV/IV/EO, contributions to unemployment insurance ALV/AC must be paid—also split equally between employee and employer.
Employees are registered for AHV/IV/EO and ALV contribution accounting with the competent compensation office. Registration can be done online via the office’s website. The employer is responsible.
Employees with children are entitled to family allowances. Income thresholds vary by canton. The employer applies for the allowances with the Family Compensation Fund, which is usually administered by the employer’s AHV compensation fund.
Employees who are subject to AHV, are at least 17 years old, and earn more than CHF 22,680 per year (as of 2025) must be insured under the mandatory occupational benefits scheme (BVG/LPP). Contribution levels depend on salary, age, and the employer’s pension plan.
Anyone gainfully employed in Switzerland must be insured against accidents. Employees working more than 8 hours per week for the same employer are covered for both occupational and non-occupational accidents.
Unlike UVG, KTG (daily sickness allowance) insurance is not mandatory. It is, however, worthwhile in most cases for employers. By law, employers must continue to pay salary during illness for a certain period (Basel, Bern, and Zurich scales). Without KTG, the employer bears the risk of paying salary without receiving work.
Once you hire employees, you must handle payroll. Several legal requirements apply:
Payroll accounting costs time, money, and nerves. The PayrollPlus payroll platform is software, payroll fiduciary, and insurance in one: by entering the gross salary, SMEs can handle all payroll tasks and benefit from our attractive insurance solutions.
To keep the hiring process clear, here is a step-by-step summary:
Important: Steps 5 and 6 are subject to deadlines. Details can be found on the websites of the State Secretariat for Migration (SEM) and the State Secretariat for Economic Affairs (SECO).
You can find more information on each step of hiring an employee on the federal government’s website.
