Employment Contracts in Switzerland
Furthermore, the employment contract should contain a language in which the employee will be working. In Switzerland, multiple languages are spoken including German, Italian, Frech, and Romansh. The employer and employee may agree that the first three months of an employment contract is a trial period. During this trial period, either party may terminate the employment at any time.
Employment Termination and Notice Period in Switzerland
In Switzerland, an employer can terminate a contract for any reason as long as it is not discriminatory or abusive.
However, termination is restricted or forbidden when an employee is unsuitable for work due to an accident or illness for a limited length of time growing with seniority (30 to 180 days), pregnant or in military duty, and within the first 16 weeks after giving birth.
The dismissal must be explained when the other party demands it. The following are the statutory notice periods:
- 7 days during the trial period
- 1 month during the 1st year of service
- 2 months during the 2nd to the 9th year of service
- 3 months from the 10th year of service
Alternatively, the parties can contractually agree on a notice period. A fixed-term employment contract terminates when the agreed-upon duration expires.
Average salary, average employer costs and working hours in Switzerland
In 2022, the average salary in Switzerland was $81,379.20. This is higher than the average annual salary in the United States, which is $53,490.54. As an employer, the actual employer costs are approximately 9.463% higher than the gross annual salary in Geneva and 8.07% to 23.40% higher in Zurich. Based on an annual salary of $81,379,20, employment costs would be from $88,703,00 in Geneva and from $87,889.33 in Zurich.
Working hours in Switzerland vary depending on the company, the employee's position, and the sector. Under Swiss employment law, normal working hours should be a maximum of 45 hours per week. Employees in industry work around 40 hours per week, while workers in the service sector, such as banking, generally work slightly longer hours (around 42 per week).
Overtime labor is paid at a rate of 125 percent of regular pay, or time off is offered in place of payment.
Paid vacation leave and public holidays in Switzerland
In Switzerland, paid leave is defined as a minimum of four weeks of paid vacation every year following the completion of one year of employment. This is expanded to 5 weeks of paid annual leave for employees under the age of 20.
Aside from the usual national holidays, each canton and area in Switzerland has its own set of holidays and events. The most important public holidays, when most Swiss employees have the day off, are listed below. If a public holiday falls on a non-working day, such as a Saturday or Sunday, employees cannot redeem the holiday time during the week. A public holiday that falls during an employee's vacation, on the other hand, does not count as a vacation day.
- New Year's Day - 1 January
- Easter - 17 April
- Easter Monday - 18 April
- Ascension Day - 26 May
- Whit Sunday - 5 June
- Whit Monday - 6 June
- Swiss National Holiday - 1 August
- Christmas day - 25 December
- Boxing Day - 26 December
Maternity and paternity leave in Switzerland
Pregnant employees who have contributed to the Office for Social Insurance for at least nine months before the due date are entitled to 14 weeks of maternity leave. The maternity allowance is provided in the form of a daily payment at 80% of regular income for 14 weeks, paid by federal insurance. Employees within the canton of Geneva are entitled to two additional weeks, giving them a total of 16 weeks of maternity leave.
Find out everything you need to know about maternity leave in other European countries.
Social Security Tax for Employers in Switzerland
In Switzerland, both the employer and the employee pay social security contributions. On average, employers have to pay 9.5% social contribution to the local authorities.
|Employer Payroll (Social Security) Contributions||%|
|Unemployment Insurance (up to $160.000)||1.10%|
Supplementary Unemployment insurance (>$160.000)
|Family compensation fund||2.45%|
|(Early) Childhood contribution||0.07%|
|Total Additional Employment Costs||9.463%|
To learn more about the Social Security Tax in Europe we invite you to read this article on social security tax rates for Employers across the Europe.
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