Employment agreements

Employment contracts in Switzerland must outline essential terms, including compensation, working hours, notice periods, and job descriptions. While verbal agreements are legally valid, written contracts are standard and strongly encouraged to avoid disputes. Depending on the region, multilingual contracts are common, particularly in German, French, or Italian.

Probationary periods

Probationary periods in Switzerland typically last one month but may extend up to three months if specified in the employment agreement. During this period, the employer and employee can terminate the contract with seven days’ notice.

Average working hours

The standard workweek in Switzerland is 40-42 hours, though this can vary by industry and collective labor agreements. Federal law caps working hours at 45 hours per week for office roles and 50 hours for industrial and retail employees.

How an employer of record enables hiring in Switzerland

Partnering with an EOR in Switzerland allows businesses to scale their workforce without the complexities of entity setup or legal missteps. Velocity Global provides local expertise and customized onboarding and ensures all employment processes comply with Swiss laws. Through our Global Work Platform™, businesses can manage supported employees and contractors from a single dashboard.

Payroll cycles

Payroll is typically processed monthly in Switzerland, with payment due by the end of the month. Employees receive a payslip detailing gross and net wages, deductions, and allowances.

Wages

Switzerland does not have a nationwide minimum wage. Instead, individual cantons may set their own. As of 2025, Geneva maintains the highest minimum wage at CHF24 per hour (~US$26). Compensation packages often include cost-of-living adjustments, especially in urban centers.

Bonus payments

Bonuses are common in Switzerland and may be contractually agreed upon or discretionary. Employers often issue bonuses annually, tied to individual or company performance.

How an EOR helps you run payroll

With Velocity Global’s EOR solution, companies ensure accurate, timely, and compliant payroll processing across Swiss cantons. Wage calculations, deductions, and payments are managed through the Global Work Platform™, so businesses can focus on managing their workforce.

Tax due dates

Swiss tax filings are due annually, typically by March 31 of the following year. Employers must deduct income tax at source for foreign workers without permanent residency.

Tax thresholds

Income tax rates in Switzerland vary by canton, municipality, and income level. Federal income tax applies progressively up to 11.5%. Cantonal and communal rates can raise total income tax to 20% to 40% in some areas. Local rates may depend on municipality, religious affiliation, marital status, and number of children.

Health insurance

Switzerland mandates individual enrollment in basic health insurance. Employers are not required to contribute, but many offer supplementary plans as a benefit. Supported employees must enroll within three months of residency.

Pensions

Swiss pensions follow a three-pillar system. Employers must contribute to the second pillar (occupational pension) for employees earning over CHF22,050 annually. Employer contributions generally range from 3.5% to 9%, with 7% to 18% of salary split between employer and employee. Employee contributions are deducted from payroll. The third pillar is commonly an additional voluntary savings.

How an EOR helps determine taxes and stay compliant

Velocity Global simplifies tax and benefits administration with in-country expertise and automated compliance tools. Our EOR solution calculates and remits taxes accurately and ensures supported employees receive statutory pension and insurance benefits.

Annual leave

Employees in Switzerland are entitled to at least four weeks of paid vacation per year, and young workers under 20 receive five weeks. Additional leave may be included in supplemental agreements. Many employers offer more generous policies as part of a benefits package.

Parental leave

Mothers are entitled to 14 weeks of paid maternity leave at 80% of their average earnings. Paternity leave is two weeks at 80%. Leave must be taken shortly after the child’s birth.

Sick leave

Employers must continue salary payments during illness for a limited period based on employment duration and canton rules. Many provide private insurance for extended leave.

Public holidays

Switzerland observes one national holiday—August 1 (Swiss National Day). Additional holidays vary by canton. Employers must track canton-specific observances for compliance.

How an EOR helps manage leave

An EOR ensures all statutory leave is granted, accurately tracked, and locally compliant across cantons. Velocity Global automates time-off workflows and ensures supported employees receive their full entitlements.

Statutory benefits

These include pension contributions, accident insurance, and social security. Employers must also withhold and remit unemployment and disability insurance premiums.

Supplemental benefits

Employers often enhance packages with supplemental health insurance, meal vouchers, transportation subsidies, and childcare support to attract top talent.

How an EOR supports benefits administration

Velocity Global helps businesses design and deliver competitive benefit packages aligned with Swiss standards. We handle benefits administration from selection to enrollment and compliance reporting.

Notice periods

Swiss law mandates a one-month notice period for terminations during the first year of employment, two months in the second year, and three months thereafter. Employment contracts may outline different terms.

Severance pay

Severance is not legally required unless specified in the contract or collective agreement. However, courts may award severance in wrongful termination cases.

How an EOR helps with terminations

Velocity Global provides guidance on lawful terminations, manages documentation, and ensures severance, notice, and benefits are processed in compliance with Swiss law.