How to hire employees in Switzerland through an employer of record (EOR) [2024]

Step #2: How to choose the best EOR for your business

Before you choose a platform, you should consider the services you will need, and how much you plan to grow your global hiring presence.

• Is the EOR active in the countries in which you need to hire? This is the first and perhaps most obvious consideration when choosing an EOR for global expansion.
• Does the EOR own its own entities in the countries it services? If the EOR doesn’t own the entities, it means they are partnering with a local or third-party provider.
• How does the EOR protect your sensitive and confidential information? It’s vital that your EOR has the appropriate data protections in place, as well as secure technology that eliminates potential disclosures of private information.
• Does the EOR offer automated solutions? You may want to look for an EOR that automates the busy work like onboarding and benefits enrollment and other common HR and IT tasks.
• What is the EOR’s support model? It’s essential that your EOR has support staff that are both easy to contact and experts in the regulations of the countries in which you are hiring.

Get the full checklist in our guide: What is an EOR?

Step #3: How to hire and onboard your Swiss employees

After you’ve chosen an EOR that provides services in Switzerland, you can start the onboarding process. You’ll need the following information:

• Their name (make sure it matches the one on the account where you’ll deposit their paychecks)
• Date of birth
• Date of hire
• Contact information, including their mailing address in Switzerland (which should indicate both the municipality and the administrative area in which they live)
• Their OASI or AHV/AHS number (Swiss social insurance number)*
• Their bank account information
• The amount they are to be paid in Swiss francs (CHF or Fr)

*The social insurance number is given by the Federal Social Insurance Office. Switzerland has four official languages: Romansh, German, French, and Italian. OASI stands for “Old Age and Survivors’ Insurance.” However, to accommodate the language diversity, the Federal Social Insurance Office translated that term into German (the acronym is AHV) and French/Italian (the acronym is AHS).

The next step is to send the new employee an employment contract, which will discuss key working conditions. An EOR can automatically localize and distribute employment agreements for you. Each Swiss hire will have a legally compliant employment contract that offers the statutory requirements for benefits, working hours, and so on, and that also adheres to the complex Swiss tax system.

Example: Let’s say you have two Swiss employees who live in different municipalities and different administrative areas.

When you use an EOR in Switzerland, it will generate separate employment agreements that account for the different tax rates the employees will pay at the municipal and administrative levels (often called communal tax and cantonal tax, respectively). It will also ensure, of course, that both employees are taxed at the federal level, as per Swiss law.

Step #4: Run payroll

After your new employee has provided you with their information and both parties have signed an employment agreement, an EOR will pay your Swiss employees in CHF and also withhold the legally required taxes and deductions from their salaries. 

This includes social security contributions, except for medical insurance.

Frequently asked questions about hiring through an EOR in Switzerland

How much does an EOR cost?

When you work with an EOR, you’ll typically discover one of two pricing structures:

• Fixed monthly fee per employee
• Percentage of payroll plus applicable taxes

There are additional costs as well. You’ll be responsible for administrative fees and onboarding charges, and if you want to add supplemental features, those will cost extra.

It’s not necessary for you to use an EOR to manage your entire workforce. One of the pros of employer of record services is that you can segment their use, and, as a result, you’ll only be charged for the employees you hire through them.

What is the difference between an EOR and PEO?

A professional employer organization (PEO) acts as a co-employer of your workforce. They’ll handle administrative services, including issuing paychecks and filing payroll taxes, as well as handling complaints. You and the PEO service provider will both be responsible for your employees. However, you can’t hire employees in other countries where you haven’t set up a legal entity using a PEO. 

An EOR takes on all traditional employment responsibilities and will be the sole employer of the portion of your workforce it manages. It’ll also assume associated liabilities and permit you to hire individuals in other countries where you don’t have a legal entity set up.

Does an EOR protect your sensitive and confidential information?

Sharing your data with an employer of record comes with pros and cons, just like any third party. Yes, you’ll save time, receive valuable services, and lower your compliance risk. On the other hand, you need to rely on third-party vendors having top-notch security to prevent data breaches from manual uploads.

Companies that operate in Switzerland are subject to both the General Data Protection Regulation (GDPR) of the EU—a strict set of mandates about data privacy—and the newly revised Federal Act on Data Protection (FADP), which complements and may even overlap with the GDPR in certain areas. The Swiss authorities, while trying to maintain freedom of information exchange, are also cracking down on data privacy. 

EORs that prioritize data protection can help. They’ll offer:

• A well-maintained, secure infrastructure 
• Regulations that comply with the industry standards of different countries and regions
• Carefully vetted personnel

As an added layer of protection, consider establishing a data processing agreement (DPA) with a payroll service that mandates they uphold sound privacy practices and provide legal protection. 

What are the mandatory employee benefits for Swiss workers?

The Swiss Confederation mandates full-time Swiss employees are entitled to the following benefits, including, but not limited to:

• Universal health care coverage
• Generous vacation entitlements
• Parental leave (including paternity and maternity leave)
• Pension plans and retirement contributions
• Paid sick leave
• Paid care leave
• Public holidays
• Workers’ compensation insurance
• Social security services, including unemployment insurance, occupational and non-occupational accident insurance, and disability insurance