Employer of Record in Switzerland

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Switzerland if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Switzerland below, to avoid any compliance issues.

Employment Contract Requirements

Switzerland upholds a strong legal framework for employment, governed by its civil law system, as outlined in Article 122.1 of the Constitution. This article empowers the Confederation to legislate regulations concerning employment contracts, which should include:

• Duration of Employment
• Job Description
• Working Hours and compensation
• Termination Conditions

Onboarding Process

We can help you get a new employee started in Switzerland quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

In Switzerland, it's important to adhere to employment laws surrounding working hours and overtime regulations to remain compliant and boost employee satisfaction.

Employers in Switzerland need to be aware of the specific regulations governing working hours, including the maximum weekly hours of 45 for most employees and 50 for certain sectors. Employees are eligible for 125% of their usual pay for overtime, or employers may opt to grant compensatory time off. Overtime should not exceed two hours per day or a total of 170 hours annually for employees subject to the 45-hour limitation, and 140 hours annually for employees subject to the 50-hour limitation.

As of August, 2025, Switzerland does not have a nationwide statutory minimum wage. Instead, minimum wage regulations vary by canton as follows:

Geneva has one of the highest cantonal minimum wages at CHF 24.48 per hour.

Switzerland relies heavily on collective labor agreements and canton-level legislation rather than a federal minimum wage law. This approach reflects the country's decentralized labor market system and high wage levels overall, with many workers earning significantly above any canton minimum wage.

Employment laws in Switzerland can be intricate, and even unintentional mistakes in contracts, benefits, or termination processes can carry legal and reputational consequences. With an Employer of Record, you gain a local partner that ensures every hire is compliant. The EOR takes care of drafting compliant contracts, processing accurate payroll, managing contributions to statutory benefits, and handling lawful terminations if needed, all according to local employment standards.

This level of protection is especially valuable when expanding into new or unfamiliar regions. Instead of using time and resources to build in-house legal knowledge, you gain immediate access to local expertise. The EOR keeps you ahead of regulatory updates and shields your company from potential compliance gaps, so you can confidently hire and manage employees while minimizing risk. For hiring managers and founders, it's the difference between hiring with uncertainty and building your team on a legally sound foundation.

Employers in Switzerland must manage a complex payroll system that includes contributions to Old Age and Survivors' Insurance (AHV/AVS), Unemployment Insurance (ALV/AC), Accident Insurance (UVG/LAA), and other mandatory levies.

Payroll compliance requires accurate calculation of both employee and employer contributions, timely submissions to federal and cantonal authorities, and adherence to local deadlines. Specific rates and procedures vary by canton and industry, adding to the complexity.

For 2025, several cantons have adjusted their tax rates, with Ticino recording a 3.11 percentage point reduction and Basel-Landschaft decreasing by 2.45 percentage points, while Vaud increased its rate by up to 0.72 percentage points. Utilizing payroll management software can help employers consolidate payroll data, simplify tax calculations, and ensure compliance with Switzerland's intricate tax regulations.

When you’re scaling quickly, setting up local payroll systems in each new country slows you down. In Switzerland, the administrative load can include government registration, benefits management, and accurate, on-time payment delivery. An EOR gives you a plug-and-play solution that handles all of this while your internal team stays focused on growth, not red tape.

Key Ways an EOR Supports Payroll in Switzerland:

• Rapid Payroll Setup: Onboards employees quickly with ready-to-go infrastructure.
• End Administration: Handles salary, tax, and benefits with no extra internal resources.
• Vendor Simplicity: Consolidates payroll across countries for centralized oversight.
• No Entity Required: Operates legally, saving your business the time and resources needed for local incorporation.

In Switzerland, work permits and visas are essential for employers hiring foreign workers. The process involves submitting applications to cantonal authorities, obtaining federal approval, and registering employees upon arrival.

Key visa types include Permit L, a short-term residence permit for up to one year; Permit B, a renewable temporary residence permit; Permit C, a permanent residence permit granted after five to ten years depending on nationality; and Permit G, a cross-border commuter permit. Employers must demonstrate the unavailability of Swiss or EU/EFTA candidates, meet quotas, and ensure compliance with local labor laws when sponsoring foreign employees.

For 2025, Switzerland has approved 8,500 quotas for specialists from non-EU/EFTA countries (4,500 B permits and 4,000 L permits), 3,500 quotas for EU/EFTA assignees (3,000 L permits and 500 B permits), and 3,500 quotas for UK nationals (2,100 B permits and 1,400 L permits). As of January 2025, Croatian nationals have full access to the Swiss labor market with quotas being lifted.

In Switzerland, employees receive a minimum of four weeks of paid annual leave, with those under 20 entitled to five weeks. Sick leave starts at three weeks and increases with tenure, while maternity leave lasts 14 weeks at 80% pay, capped at CHF 220 per day, and fathers receive two weeks of paternity leave.

Parental leave varies by canton, such as Geneva's 24-week policy. Employers must comply with federal and cantonal laws, clearly communicate leave entitlements, and maintain proper records. Special leave, including family emergencies and unpaid sabbaticals, depends on agreements, and leave cancellations are only allowed in exceptional cases.

Employers in Switzerland are required to provide several mandatory benefits, including Old Age and Survivors' Insurance (AHV), Disability Insurance (IV), Accident Insurance (UVG), Unemployment Insurance (ALV), Maternity Leave, Family Allowances, Occupational Pension Plans (BVG), and Health Insurance. To attract and retain top talent, many employers also offer supplemental benefits such as Supplemental Health Insurance, Additional Pension Contributions, Meal Allowances, Transportation Stipends, Flexible Working Hours, Training Opportunities, Additional Parental Leave, and Holiday Bonuses.

While supplemental benefits are not legally required, they can significantly enhance employee satisfaction and loyalty. Employers should carefully consider both mandatory and supplemental benefits to ensure compliance with Swiss regulations and to foster a supportive and attractive work environment.

For startups and small teams, managing global employee benefits isn’t just complex, it’s a full-time job. In Switzerland, understanding what benefits are required, how to deliver them, and how to stay compliant can be overwhelming, especially without local HR expertise. An Employer of Record removes that pressure by taking complete ownership of benefits administration, so you don't have to become an expert in local employment law.

Whether it’s healthcare contributions, pension enrollment, or statutory leave, the EOR ensures everything is delivered accurately and on time. They navigate any country-specific nuances, keep up with legal changes, and ensure each benefit is properly tracked and documented. For founders, that means fewer distractions and more time to focus on growth. Your employees get the security and support they expect from a local employer, and you get to scale your team in Switzerland without building complex infrastructure or worrying about compliance missteps.

Switzerland's employment termination framework strikes a balance between flexibility for employers and protection for employees. Both parties can terminate contracts without stating a reason, provided they adhere to statutory notice periods, which range from one to three months based on tenure. However, immediate termination without notice is only permitted in cases of serious misconduct. Employees are protected against unfair dismissals, such as those based on discrimination or retaliation, and may claim up to six months' salary as compensation if a termination is deemed abusive.

Severance pay is not generally required by law, but employees over 50 years old with at least 20 years of service may be entitled to a severance allowance ranging from two to eight months' salary, which can be offset by occupational pension benefits. In practice, this provision rarely applies when pension benefits funded by the employer are available. Employers must follow due procedures, including providing written notice, settling final payments, and issuing necessary documentation like work certificates and social insurance records. In cases of collective dismissals, consultation with employee representatives and notification to labor authorities are mandatory. Understanding and adhering to these regulations ensures compliance and a smooth termination process.