Switzerland is known for its beautiful scenery and friendly, peaceful environment, ideal for a business looking to expand. The country exports a diverse array of products including chemicals, electronics, and instruments, and it has strong trade relationships with countries across Europe. However, the nation’s laws and customs are incredibly complicated and vary widely by region.
When setting up your Switzerland payroll, you must keep these rules in mind to stay compliant. Alternatively, you can work with a global PEO such as Globalization Partners. We’ll take the heavy weight of compliance off your shoulders and onto ours, so you won’t have to worry about anything other than running your business.
Taxation Rules in Switzerland
Switzerland has a federal corporate income tax (CIT) rate of 8.5% on profit after tax. Additional expenses are applied at the cantonal and communal level, so your CIT can range between 11.9% and 21.0% depending on your company’s location in Switzerland. The country also has a complicated income tax rate for employees, which varies depending on how much money a worker makes.
Switzerland Payroll Options for Companies
Companies have four main Switzerland payroll options, so you can choose the one that best fits for your business:
- Internal: Larger subsidiaries with a long-term commitment to Switzerland may run their own internal payroll. However, this option can be more expensive since the company will have to hire the necessary staff.
- Remote: Other subsidiaries with a large parent company may opt to add all Switzerland employees to the parent company’s remote payroll. Both sets of employees will have separate employment compliance laws to take into account.
- Switzerland payroll processing company: If you would prefer to outsource your payroll, you could choose a local Switzerland payroll processing company. However, your subsidiary will still be compliant for any of the local company’s mistakes.
- Switzerland payroll outsourcing: Finally, you can outsource your Switzerland payroll with Globalization Partners. We’ll handle both your payroll and all matters of compliance.
How to Set Up a Payroll in Switzerland
To set up payroll in Switzerland, you will first need to establish your subsidiary by registering with the Commercial Register. You must submit notarized bylaws and founding documents as well as an application. Companies also need to create a Swiss bank account that has at least $100,000 in capital.
The best way to hire new employees is by writing an employment contract that outlines the term of the relationship. You should include entitlement and termination terms in this contract to avoid any issues in the future.
Probationary periods are common in Switzerland, and you must give employees seven days’ notice during this period. Notice periods depend on how long the employee has worked for the company, but both parties could potentially agree to immediately terminate the contract.
Payroll Processing Company in Switzerland
When you are ready to expand to Switzerland, choose a payroll processing company that will handle both your payroll and matters of compliance. Contact us today to learn more about our comprehensive solution, including our proprietary technology.