Potential applicants for open positions usually focus on two main areas — compensation and benefits. As an employer in Switzerland, you’ll need to offer guaranteed benefits to stay compliant with local laws, and you should also provide additional benefits that employees expect. G-P can help you provide both through our Switzerland benefit outsourcing services. We will add your employees to our payroll and follow all of Switzerland’s compensation laws, and we’ll take on the risk so you can focus on running your business.
Switzerland Compensation Laws
Switzerland employers offer some of the highest salaries in the world. The country does not have an official minimum wage, but employees in trade unions often have industry-related minimum salaries. Most unskilled workers earn between 2,200 and 4,200 Swiss francs (CHF) per month, while skilled employees receive 2,800 to 5,300 CHF per month.
Any hours worked over the agreed amount of working hours per week are classified as overtime. Employees typically get 125% of their regular pay as overtime. They can alternatively choose to receive time off for overtime hours worked.
Guaranteed Benefits in Switzerland
As part of your Switzerland benefit management plan, you’ll need to dole out all statutory benefits to your employees, including time off.
Switzerland has 26 cantons, or states, that have their own public holidays. The only federal holiday is National Day on August 1. Check the list of public holidays in your canton to determine which days your employees should receive time off.
Your workers must also get annual holiday paid leave. Switzerland employment law stipulates four weeks per year, but you can extend that length based on an employment contract or a trade union agreement.
Another guaranteed benefit in Switzerland is maternity leave after three months of continuous employment with one employer. New mothers receive 80% of their full wages for 14 weeks after giving birth and are protected from dismissal for 16 weeks after giving birth. New fathers receive 2 weeks’ statutory paternity leave.
Switzerland Benefits Management
Another aspect of Switzerland benefit management is offering any additional benefits that could attract top talent to your open positions. Employers in Switzerland often provide supplemental private health insurance policies that cover treatments not treated by the country’s compulsory health insurance plan.
Switzerland is known for its high-quality medical and paramedic services since it spends more than 10% of its GDP on health. However, an additional policy could improve the standard of room and assistance in case an employee is hospitalized.
Restrictions for Benefits and Compensation
Most restrictions for benefits and compensation come from a trade union. Although only a small percentage of employees are involved in a trade union, you should make sure your industry is not covered by one. If you are, you could have additional requirements to meet beyond the statutory minimums.
Switzerland Competitive Benefits Planning
When you expand to a new country, benefits planning will play a role in your development. You can use your benefits plan to show employees your appreciation and make your company more competitive in the labor market.
Switzerland Employee Benefits Plans
The benefits plan you develop can set the tone for your company’s growth abroad. While you’re obligated to provide some benefits under labor regulations, fringe benefits will set your company apart. These additional provisions will improve employee satisfaction and motivation. They can also make your company more attractive to job seekers, shortening your recruitment time frame.
As your business continues to develop abroad, your benefits plan will contribute to your reputation. Some of the supplemental benefits you might offer include:
- Stock opportunities
- Flexible working hours
- Meal allowances
- Transportation stipends
- Training opportunities
- Additional paternity leave
- Supplemental pension
- Holiday bonuses
Legal Obligations for Employee Benefits
While fringe benefits will make your company more competitive in the labor market, you must consider your legal obligations first. Switzerland’s labor laws describe a variety of required provisions, including:
- Public holidays off
- Paid annual leave
- Maternity leave
- Accident insurance
- Social security contributions
While many of these regulations apply to the entire country, public holidays do not. Switzerland has 26 states with different public holidays. Make sure you’re aware of the recognized holidays in your state so you can provide the correct days off.
Designing Switzerland Employee Benefits Plans
Designing employee benefits plans can feel challenging, especially when you’re operating in an unfamiliar area. Your goal for your plan should be to recognize employees’ needs without overextending your business. You can achieve this balance by following a few fundamental steps.
1. Assess Your Company’s Resources and Goals
It’s essential to understand your revenue and expenses as you create a benefits budget. Consider factors like payroll costs, inventory expenses, and rent when determining your spending power.
You can also use this initial step to identify your company’s goals and how benefits can help you achieve them. For example, if you want to compete with a similar company in the area, you can build a benefits package that offers similar provisions.
2. Learn About the Labor Market
You have to understand the market to make your plan competitive. You can do so by researching other companies in the area. Look into businesses similar to yours in size and industry to see what kinds of benefits are standard.
To learn more about employee need and expectations, you might conduct interviews or distribute surveys. Once you know which benefits workers are looking for, you can prioritize them as your budget will allow.
3. Create a Plan
With the information you’ve gathered about your business and the market, you can create a benefits plan. Allocate funds to the required benefits first, then focus on the fringe benefits that are most in-demand.
Average Cost of Benefits
Every company has a different budget for its benefits based on size, location, and industry. While there’s no true average cost, creating a budget based on your business’s unique needs can help you control your spending.
How to Calculate Employee Benefits
Benefits calculations will vary based on your offerings. However, the labor laws offer guidance for calculating required benefits like social security. Both employees and employers must contribute 6.4 percent of gross pay to the nation’s social security fund. The breakdown for this rate is as follows:
- 5.3 percent for old age, survivors, and disability funds
- 1.1 percent for unemployment
How Are Employee Benefits Taxed in Switzerland?
Fringe benefits do not affect employee income, making them nontaxable regardless of the type or value. For this reason, supplemental benefits are even more valuable to Swiss nationals. Developing your tax plan to include a wide range of benefits beyond the requirements can make your company appealing to many job seekers.
Employee Health Benefits
Switzerland operates under a universal healthcare system. The program is funded by taxes, social security contributions, insurance premiums, and out-of-pocket payments.
Residents are required to hold a private insurance scheme from a nonprofit provider, but employers are not required to offer this scheme. That said, employers may choose to provide this supplemental coverage as a part of their benefits plans.
Regardless, employers and workers are responsible for social security contributions, which will support a portion of the health care system.
Work With G-P for Employee Benefits Planning in Switzerland
At G-P, we offer expert support for your company’s global growth. Get in touch with us to learn more.