Employment in Switzerland is governed mainly by the Code of Obligations (employment contracts) and the Labour Act (working hours and health protection), with many terms added by collective agreements and cantonal law. Here is what employers need to know about leave, pay, tax, social insurance and ending employment.
The Code of Obligations sets the statutory minimums. Maternity and paternity pay are funded by the federal loss-of-earnings compensation scheme (EO/APG), not by the employer, although employers usually process the claim and many pay more under their own policy or a collective agreement.
Paid holiday of at least 4 weeks a year, rising to 5 weeks for employees under 20. At least 2 weeks must be taken consecutively, and leave may not be replaced by money while employment continues.
Once employment has lasted more than 3 months, the employer continues full pay for at least 3 weeks in the first year of service and a longer, service-based period after that. Many employers replace this with daily sickness benefit insurance.
Paid at 80% of average earnings, up to CHF 220 a day. Mothers may not work for 8 weeks after the birth.
10 working days for the father or the mother’s wife, taken within 6 months of the birth, paid at 80% up to CHF 220 a day. It may not be deducted from annual leave.
To qualify for maternity or other-parent allowance, the parent must have been insured under the AHV/AVS for the 9 months before the birth and have worked for at least 5 of those months. Maternity leave can be extended by up to 56 days if the newborn stays in hospital. Geneva pays a longer cantonal maternity benefit on top of the federal scheme. There is no general statutory parental leave beyond these entitlements.
Set up each Swiss leave type in IceHrm with its own accrual, carry forward and approval rules, including the extra week for employees under 20 and pro-rata entitlements for part-time staff. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
There is no national minimum wage. Pay floors come from collective labour agreements (GAV/CCT) in many industries and from cantonal minimum wage laws in Geneva, Neuchâtel, Jura, Ticino and Basel-Stadt, which are adjusted regularly.
For industrial, office and technical staff and sales staff in large retail businesses. Contracts commonly set 40–42 hours.
For all other employees covered by the Labour Act. Senior managers are excluded from the hours rules.
Overtime beyond contractual hours is paid at 125% unless the contract says otherwise in writing, or compensated with time off by agreement.
Swiss law distinguishes contractual overtime (hours beyond the contract but within the legal maximum) from excess hours beyond the Labour Act maximum. Excess hours are capped at 2 hours a day and at 170 hours a year for the 45-hour group or 140 hours for the 50-hour group, and must be paid at a 25% premium unless compensated with time off. For office and technical staff, the premium on excess hours only applies beyond 60 hours a year. Night and Sunday work generally require an official permit.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so overtime and excess hours are tracked against the weekly and annual limits. Time & attendance →
Income tax is levied at three levels: federal, cantonal and municipal. Federal tax is the same everywhere, while cantonal and municipal tax varies widely, so the overall rate depends heavily on where the employee lives. The tax year is the calendar year.
| Taxable income | Rate on excess | Tax on this income |
|---|---|---|
| CHF 0 – CHF 15,200 | 0% | Nil |
| CHF 15,200 – CHF 33,200 | 0.77% | 0.77% of the amount over CHF 15,200 |
| CHF 33,200 – CHF 43,500 | 0.88% | CHF 138.60 plus 0.88% over CHF 33,200 |
| CHF 43,500 – CHF 58,000 | 2.64% | CHF 229.20 plus 2.64% over CHF 43,500 |
| CHF 58,000 – CHF 76,200 | 2.97% | CHF 612.00 plus 2.97% over CHF 58,000 |
| CHF 76,200 – CHF 82,100 | 5.94% | CHF 1,152.50 plus 5.94% over CHF 76,200 |
| CHF 82,100 – CHF 108,900 | 6.60% | CHF 1,502.95 plus 6.60% over CHF 82,100 |
| CHF 108,900 – CHF 141,500 | 8.80% | CHF 3,271.75 plus 8.80% over CHF 108,900 |
| CHF 141,500 – CHF 185,100 | 11.00% | CHF 6,140.55 plus 11.00% over CHF 141,500 |
| CHF 185,100 – CHF 793,900 | 13.20% | CHF 10,936.55 plus 13.20% over CHF 185,100 |
| Over CHF 793,900 | 11.50% | Flat 11.5% of total taxable income |
Swiss nationals and holders of a C (settlement) permit file an annual tax return and pay tax directly, so employers do not withhold income tax from their pay. Foreign employees without a C permit are generally taxed at source: the employer deducts withholding tax each month using the canton’s tariff and pays it to the cantonal tax office. Employers also issue an annual salary certificate (Lohnausweis) to every employee.
Most social insurance contributions are split between employer and employee. The employer deducts the employee’s share from gross pay and pays the total to the compensation fund and insurers. Rates below apply from 1 January 2026.
| Contribution | Employer | Employee | Earnings cap |
|---|---|---|---|
| Old age, survivors’, disability and loss of earnings (AHV/IV/EO) | 5.3% | 5.3% | No cap |
| Unemployment insurance (ALV/AC) | 1.1% | 1.1% | CHF 148,200 a year |
| Family compensation fund | about 1–2% | – | No cap (Valais also charges employees) |
| Occupational accident insurance | about 0.17–3% | – | CHF 148,200 a year |
| Non-occupational accident insurance | – | usually employee-paid | CHF 148,200 a year |
| Occupational pension (BVG/LPP) | at least 50% | remainder | Set by the pension plan |
Employees earning above the BVG/LPP entry threshold must be enrolled in a pension fund from the January after their 17th birthday (risk cover) and save for retirement from age 25. Statutory retirement credits are 7%, 10%, 15% and 18% of the coordinated salary for the age bands 25–34, 35–44, 45–54 and 55 to retirement. The employer must pay at least half, and many plans go further than the legal minimum.
Build Swiss pay the way you already structure it, with your own salary components, deductions and formula columns, such as AHV and pension contribution columns, and run payroll in CHF alongside other currencies. Want to know how well IceHrm handles payroll calculations for Switzerland? Contact us or see Payroll →
Swiss law gives both sides freedom to end an open-ended contract with notice, without needing a specific reason. A dismissal can still be abusive, for example in retaliation for a legitimate claim or because of a personal characteristic, and the employee can then claim compensation of up to 6 months’ pay. On request, the reason for termination must be given in writing.
| Length of service | Notice |
|---|---|
| During probation | 7 days |
| First year of service | 1 month |
| 2nd to 9th year of service | 2 months |
| 10th year of service onwards | 3 months |
After probation, an employer cannot give notice while the employee is unable to work through illness or accident, for 30 days in the first year of service, 90 days from the 2nd to the 5th year and 180 days from the 6th year. Notice given in these periods, during pregnancy and the 16 weeks after birth, or during military or civil service is void. If notice was already given before the protected period began, it is suspended and continues afterwards.
Severance is not generally required. The Code of Obligations only provides a payment of 2 to 8 months’ wages for employees aged 50 or over with at least 20 years of service, and it is reduced or cancelled by pension fund benefits the employer financed. Collective agreements and social plans often provide more.
Final pay includes any accrued annual leave not taken during the notice period. Employees are entitled to a reference letter (Arbeitszeugnis) at any time and when employment ends.
National Day on 1 August is the only public holiday set by federal law. Cantons can declare up to 8 more, and the list differs across the country, especially between Catholic and Protestant regions.
Apart from National Day, each holiday above is set by the cantons and observed in most, but not all, of them. Other cantonal holidays include Labour Day, Corpus Christi, Assumption, All Saints’ Day, the Immaculate Conception and local days such as Geneva’s Jeûne genevois. Check the canton where each employee works.
Leave groups give each office its own holiday calendar, so teams in Zurich, Geneva and Lugano get the right cantonal days off automatically. Holiday calendars →
An employment contract can be concluded without a special form, but if it lasts more than a month the employer must confirm the key terms in writing within one month of the start. Collective agreements, some of which are declared binding for a whole industry, may add further requirements.
Changes to any of these terms must also be confirmed in writing within one month.
The first month of an open-ended contract is treated as probation unless agreed otherwise, and it can be extended in writing to a maximum of 3 months. Fixed-term contracts end automatically without notice. There is no statutory maximum duration, but repeated fixed-term contracts without an objective reason can be treated as a single open-ended contract.
Send contracts and written statements of terms for e-signing, store permits and certificates on the employee’s record, and track onboarding with task lists so nothing is missed on day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Switzerland, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Switzerland? Talk to us.
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