1. Social Security Contributions: Pension and Insurance

Overview:
In Switzerland, social security contributions are essential and managed under the Swiss social security system (AHV/IV/EO). Both employers and employees contribute to this system, which offers pension benefits, disability support, and health insurance.

Details:
Swiss employees contribute to the AHV pension system, which provides old-age, disability, and survivors’ benefits. Both the employer and employee share contributions equally. Health insurance is mandatory for all residents, and employees must arrange for their private coverage.

Outcome:
These contributions ensure employees’ financial security in the event of retirement, disability, or death, adhering to Switzerland’s social welfare policies.

2. Paid Annual Leave

Overview:
Employees in Switzerland are entitled to paid annual leave, a critical component for employee well-being.

Details:

• Employees are entitled to a minimum of four weeks (20 days) of paid annual leave.
• Additional days may be granted based on the employer’s policy or union agreements.

Outcome:
Paid annual leave helps employees recharge and maintain a healthy work-life balance, ensuring long-term productivity and morale.

3. Maternity and Paternity Leave

Overview:
Switzerland offers paid maternity and paternity leave to promote family welfare.

Details:

• Maternity leave provides female employees with 14 weeks of leave, paid at 80% of their salary.
• Paternity leave allows male employees to take up to two weeks off at 80% of their salary.

Outcome:
These leave benefits support families, improve employee satisfaction, and encourage a healthy work-life balance.

4. Sick Leave

Overview:
Sick leave in Switzerland ensures that employees can recover from illness without losing income.

Details:

• Sick leave is generally paid for a period defined by employment contracts or collective agreements.
• Employees are entitled to paid sick leave for an extended period, typically for a few weeks to several months, depending on their length of service.

Outcome:
Sick leave benefits help employees recover without financial stress, fostering a supportive work environment.

5. End of Service Benefits (Severance Pay)

Overview:
In Switzerland, employers are generally not required to provide severance pay unless specified in the contract or as part of a collective agreement.

Details:

• Severance pay may be offered based on the terms of the contract or following dismissal without cause.
• The amount is typically based on the employee’s length of service and salary.

Outcome:
Severance pay provides financial security to employees upon termination and promotes fair treatment in the workplace.

6. Public Holidays

Overview:
Switzerland observes various public holidays that differ by canton. Employers must ensure employees receive paid leave on these days.

Public Holidays (2025):

Details:

• Employees are entitled to paid time off on national and regional holidays.
• If employees work on these days, they are typically entitled to overtime compensation.

Outcome:
Public holidays allow employees to rest and celebrate cultural and national events, promoting work-life balance.

7. Health Insurance

Overview:
Health insurance is mandatory for all residents in Switzerland, including foreign employees. It is the responsibility of the employee to arrange private health insurance, with employers ensuring compliance.

Details:

• Health insurance premiums are paid by the employee, although employers may offer financial assistance or subsidize part of the cost.
• Employers are required to ensure that employees have adequate health coverage.

Outcome:
Mandatory health insurance ensures all employees have access to necessary medical care, promoting a healthy workforce.

8. Additional (Extra-Legal) Benefits

Overview:
In addition to the legally mandated benefits, many employers in Switzerland offer additional perks to attract and retain talent.

Details:

• Transportation Allowance: Some employers offer subsidies or allowances for commuting.
• Housing Allowance: Common in certain industries or for foreign workers.
• Performance Bonuses: Companies may offer bonuses based on individual or company performance.

Outcome:
Extra benefits enhance employee satisfaction, foster loyalty, and improve retention.

Streamlining Compliance with EOR/PEO Services

Partnering with an Employer of Record (EOR) or Professional Employer Organization (PEO) like GlobainePEO can help streamline the management of employee benefits in Switzerland. By ensuring compliance with local laws, handling payroll, and managing mandatory benefits, an EOR/PEO simplifies operations for businesses expanding into the Swiss market.

Final Thoughts

Complying with mandatory employee benefits in Switzerland is essential for fostering a motivated, healthy workforce. By understanding and adhering to these requirements, businesses can enhance employee satisfaction, reduce legal risks, and ensure smooth operations. Partnering with a trusted EOR/PEO like GlobainePEO ensures full compliance while allowing businesses to focus on growth and productivity in Switzerland’s competitive market.