Swiss payroll involves withholding and remitting several parallel contributions on top of salary: AHV/IV/EO (old-age, disability, income-replacement) at roughly 10.6% combined split evenly between employer and employee, unemployment insurance (ALV, capped, split employer/employee), accident insurance (UVG, split by risk type), and mandatory occupational pension (BVG/LPP, age- and salary-banded) contributions — plus Quellensteuer income tax withholding for foreign employees without a C permit. Employers issue an annual salary certificate (Lohnausweis/certificat de salaire) summarizing gross pay, benefits, and deductions for each employee's tax return.
Swiss payroll is more layered than a single 'payroll tax' system — getting AHV, BVG pension banding, and Quellensteuer withholding all correctly calculated is complex enough that most small/medium employers outsource payroll to a fiduciary or use dedicated Swiss payroll software rather than running it manually.
Key Facts
AHV/IV/EO (old-age, disability, loss-of-earnings insurance): combined 10.6% of gross salary, split equally between employer and employee (5.3% each), with no upper salary cap.
Unemployment insurance (ALV): approximately 2.2% combined (1.1% each) up to a salary ceiling, with a small solidarity surcharge above it in some years.
Accident insurance (UVG): occupational accident cost typically borne by employer; non-occupational accident cost typically borne by employee, rates vary by risk category and insurer.
Occupational pension (BVG/LPP): mandatory for employees above a minimum salary threshold (coordinated with AHV), with contribution rates rising by age bracket, split between employer and employee (employer must pay at least half).
Quellensteuer (withholding tax) applies to foreign employees without a C permit, calculated per canton tariff tables based on marital status, children, and religion (church tax) in some cantons.
Steps
Register the company with AHV, UVG insurer, and a pension fund (BVG) — Mandatory before the first payroll run once employees are hired.
Calculate gross-to-net per employee — Apply AHV/IV/EO, ALV, UVG, BVG, and Quellensteuer (if applicable) deductions correctly per cantonal tariff.
Remit contributions monthly/quarterly — Pay employer and employee shares to the relevant AHV compensation office, insurer, and pension fund on schedule.
Issue annual salary certificates — Provide each employee a Lohnausweis/certificat de salaire for their tax return by year-end/early following year.
Costs
AHV/IV/EO (combined, employer+employee): 10.6% of gross salary
Unemployment insurance (combined, up to ceiling): ~2.2% of gross salary
Timelines
Annual salary certificate issuance: By early in the following calendar year