skip to Main Content

Employer ABC

In our employer ABC we explain the most relevant terms of Swiss labour law and portray the social security institutions you might come across while trying to employ domestic staff. Please click on the respective initial letter to reach the term you are looking for. 

Do you want to make an addition to a term or miss a particular one? You are warmly welcome to send us an e-mail tooffice@quitt.ch. Thank you! 

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Accident

According to the Swiss Accident Insurance Act all employees in Switzerland have to be insured against accidents by their employer. While the premium of the occupational accident insurance (BU) is paid by the employer, the premium of the non-occupational accident insurance (NBU) is paid by the employee. The non-occupational accident insurance is compulsory for employees who work more than eight hours a week for the same employer. Accident insurance premiums for private employers of domestic employees have to be paid for each paid activity (for each employee). 
quitt. takes out accident insurance for all customers with Baloise Insurance. This accident insurance package is exclusively offered to private employers of domestic employees. You will find more information on compulsory accident insurance in our glossary under the keyword «
Accident insurance (UVG)».
To take out accident insurance please click here.

Accident insurance (UVG) 

The compulsory accident insurance protects employees against harm owing to accident. Domestic employees who work less than eight hours a week for the same employer are only protected against harm owing to an occupational accident (BU) – accidents that happen at work or on the way to work. Employees who work on average more than eight hours a week for the same employer are also protected against accidents in their spare time (non-occupational accidents NBU). 
Accident insurance covers the costs for medical treatment caused by an accident. If an employee is partly or completely unable return to work after an accident, the insurance pays 80% of the insured wage starting from the third day after the day of the accident. 

Au pairs 

Au pairs are youngsters who live with a guest family in a different language region and help their guest families out with childcare and domestic work. Apart from board and lodge, au pairs receive a net wage of approximately CHF 700.00 – CHF 800.00. The activity rate is usually limited to a maximum of 30 hours a week and attending a language course in the local language mandatory. 

Au-pairs are legal employees in the household and must be correctly registered and insured.   

You can also find detailed information in our blog post «Au-pairs». 

B

Black labour 

«Black labour» generally disregards legal labour registration and licence management requirements. Depending on the individual scope and situation of an employer-employee relationship, registration and licence management requirements consist of obtaining a work permit, registering the employment at the compensation office, paying the withholding tax to the cantonal tax office, purchasing a mandatory accident insurance as well as registering the employee with a pension fund (BVG). 

Transgressions against the federal law on measures against black labour (Article 10 of the BGSA) will be sanctioned by Cantonal administrative and tribunal authorities. 

You will find more information on the mentioned Registration and licence requirements in our glossary under the keywords «Old age and survivors’ insurance (AHV)», «Withholding tax», «Simplified billing procedure», «Pension fund (BVG)», «Accident insurance (UVG)» as well as «Work permit». 

C

Contract of employment 

Does an employment contract have to be concluded in writing? No, not in principle. An employment contract can be concluded verbally (Art. 320 OR).  

For reasons of preserving evidence and to create clarity in the employment relationship, however, it is always advisable to draw up employment contracts in writing. Such a reservation of written form is also necessary for subsequent amendments to the contract. With quitt. you can create an employment contract with just a few clicks. However, it is up to you how you use and further develop this employment contract.  

Contribution rates

The current contribution rates are as follows:  

AHV 8.40%
IV 1.40%
EO 0.45%
Total 10.25%  

Contributions rates of the AHV/IV/EO and unemployment insurance ALV are split equally between the employer and the employee: AHV/IV/EO 5.125% each and ALV 1.1% each. 

The employer additionally pays contributions to the family equalization fund and possible administrative fees, which vary from one Canton to another.  

The contributions are calculated on the basis of the gross salary paid. 

D

E

Employer defence insurance 

As a rule, legal disputes involving you as a private employer are not covered by private legal protection insurancesOur insurance covers this gap and protects you comprehensively in labour disputes with your employees. 

quitt. offers this complementary insurance in cooperation with the TCS. You can select this insurance during the registration process or add it to your product selection in your quitt.account at any time. Further information is available here. 

Extraordinary Spare Time 

The law (Article 329 (3) of the Swiss Code of Obligations) foresees that the employer shall grant the employee the required time for special occasions within the regular time of work (so-called “accepted spare days and hours”). 
These accepted spare days and hours have to be taken in consultation with the employer. Valid special occasions are personal issues such as change of domicile, consultations with physicians or authorities or family events (death, birth, marriage of close relatives) as well as spare time to search for a new job once termination has been announced. 

F

Family equalization fund (FAK) 

For children up to the age of 16, employees receive a child allowance of at least CHF 200 per child per month. For sick children or children with disabilities who are unable to work, employees receive the family allowance until the children are 20 years old. For children aged 16 to 25 who are in education, employees are entitled to an education allowance of at least CHF 250 per child per month. 

This is why all private employers of domestic employees are bound to pay contributions to the FAK. The rate is established by the Cantonal family equalization fund. Employees can claim family allowances via their employer. If the allowances are granted, they will be allocated to the employees via their employer. In case an employee has more than one employer, the employer that pays the highest salary is responsible for the claim and its allocation. The family equalization fund decides to which parent the allowances will be allocated. 

There is one allowance per child. If several persons are entitled to family allowances, the following order applies:  

  1. the person who works
  2. the person who has parental custody or had parental custody until the child reached legal age
  3. the person who predominantly lives together with the child or lived together until he or she reachedlegalage 
  4. the person entitled to receive allowances in the child’s Canton of residence
  5. the person who has the higher AHV relevantincome from salaried employment 
  6. the person who has the higher AHV relevantincome from self-employment 

Eligible for family allowances are employees with an AHV relevant income of at least CHF 7’110 per year or CHF 592 per month (status 2019). The allocated amount of family allowances varies from Canton to Canton. 

If the simplified billing procedure applies, the family equalization fund grants the family allowances only after the yearly wage declaration has been submitted in the first quarter of the following year. 

You will find more information in our glossary under the keywords «AHV contribution» and «Simplified billing procedure». 

G

Gross wage 

The gross wage corresponds to the salary before the deduction of the employee’s social security contributions. The employee’s social security contributions consist of the contributions to AHV, IV and EO, the contributions to the unemployment insurance (ALV), the non-occupational accident insurance (NBU) as well as the pension fund (BVG). If all these contributions are deducted from the gross wage, this results in the net wage, which is finally paid to the employee. 

We generally recommend you fix the gross wage in the contract of employment, as it will be used as the basis for the calculation of taxes and social security contributions. As an employer you will benefit from the stipulation of a gross wage since changes in the social security contribution or the withholding tax rates will not only impact your employment costs but evenly affect both employer and employee. 

For a detailed calculation of the employment costs of your domestic help we recommend our Wage calculator. 

You will find more information on wage contributions in our glossary under the keywords «Net wage», «AHV contributions», «Withholding tax», «Accident insurance (UVG)» as well as «Pension fund (BVG)». 

H

Household insurance 

Damage caused by an employee at work is usually not covered by the employee’s private liability insurance. Our household insurance fills this gap by protecting the employer’s household effects from potential damage caused by his or her employee. Thanks to our partnership with Baloise Insurance as a private employer you will benefit from a cost-efficient household insurance which has been specifically adapted to the needs of domestic employment. 

The household insurance package of quitt. is exclusively offered to private employers of domestic employees.  

You can select the household insurance during the registration process or add it to your product selection in your quitt.account at any time. You can find further information about our household insurance here.

 

You will find more information on damage of household effects in our blog post «Damage of household effects». 

I

J

K

L

Liability

You are liable if you harm someone, intentionally or unintentionally. You are thus liable for this harm or damage.  

Damage caused by an employee at work is usually not covered by the employee’s private liability insurance. The employee is only liable for damage that he or she deliberately and carelessly inflicted upon the employer (Article 321e of the Swiss Code of Obligations). Our household insurance fills this gap by protecting the employer’s household effects from potential damage caused by his or her employee. Thanks to our partnership with Baloise Insurance as a private employer you will benefit from a cost-efficient household insurance which has been specifically adapted to the needs of domestic employment. You can select our household insurance during the registration process or add it to your product selection in your quitt.account at any time. You can find further information about the housing comprehensive insurancehere. 

M

Maternity leave 

All working mothers are entitled to paid maternity leave and receive “maternity compensation”. This applies to employees, self-employed persons, unemployed persons and women who work in their husband’s business and receive a wage. Unlike maternity leave, there is no statutory paternity leave or parental leave. 

The employee cannot be dismissed during maternity leave. Working women are eligible for 14 weeks of maternity leave. During these 14 weeks they receive a maternity compensation of 80% of their average past income, however not more than CHF 196.00 per day. 

Eligible are female employees who were insured by the AHV nine months prior to the birth of their child and who have worked for at least five months during this period. Moreover, they need a valid employer-employee relationship at the time of birth of the child. 

The costs of the maternity compensation are sustained by the compensation office from the day of birth. If the employer continues to pay the employee’s salary during maternity leave, the compensation in the form of daily allowances is disbursed to the employer at the end of the month. If this is not the case, the maternity compensation is disbursed directly to the employee. You can find out more about “Maternity leave” in our blog post «Maternity compensation in a nutshell». 

Minimum wage 

There is no such thing as a generally accepted minimum wage in Switzerland. There are, however, regulations according to the standard employment contract for domestic employment (NAV Hauswirtschaft for all employments starting from at least an average of five working hours a week with the same employer – Status as of January 1st 2017) that have to be respected. These regulations exclude the following employer-employee relationships: au pairs, apprenticeships, traineeships as well as day nannies. 

Apart from the Canton of Geneva, the following hourly minimal gross wages (excluding vacation compensations) are applicable in Switzerland: 

  • Untrained domestic employees without professional experience: CHF 19.20  per hour 
  • Untrained domestic employees with four years of experience in domestic employment: CHF 21.10 per hour 
  • Trained domestic employees with three years of vocational education and a Federal Certificate of Competence (Eidgenössischer Fähigkeitsausweis EFZ): CHF 23.20 per hour 
  • Trained domestic employees with two years of vocational education and a vocational certificate (Berufsattest EBA): CHF 21.10 per hour 

For the Canton of Geneva, the following hourly minimal gross wages (excluding vacation compensations) apply: 

  • Untrained domestic employees without professional experience: CHF 20.79 per hour 
  • Untrained domestic employees with four years of experience in domestic employment: CHF 22.30 per hour 
  • Trained domestic employees with three years of vocational education and a Federal Certificate of Competence (Eidgenössischer Fähigkeitsausweis EFZ): CHF 24.55 per hour 
  • Trained domestic employees with two years of vocational education and a vocational certificate (Berufsattest EBA): CHF 22.30 per hour 

You will find more information on minimal wage in our blog post «Fair wages for domestic employees». 

N

Net wage 

Net wage normally corresponds to the disbursed salary and is often called cash wage. This equals the gross wage after the deduction of the social security contributions. The employee’s social security contributions consist of the contributions to AHV, IV and EO, the contributions to the unemployment insurance (ALV), the non-occupational accident insurance (NBU) as well as the pension fund (BVG). 

If the employee is subject to withholding tax, there is an additional difference between «Net wage» and «Disbursed salary». In this case, the disbursed salary equals the net wage after the deduction of the withholding tax or the amount that effectively stays in the domestic help’s pocket after tax. 

We generally recommend you fix the gross wage in the contract of employment, as it will be used as the basis for the calculation of taxes and social security contributions. As an employer you will benefit from the stipulation of a gross wage since changes in the social security contribution or the withholding tax rates will not only impact your employment costs but evenly affect both employer and employee. 

The employer may also conclude a net wage agreement with his employees. In this way, the employer undertakes to pay the employee a wage free of deductions by paying the employee’s AHV/IV/EO/ALV contributions in addition to hoi or her own. If, in addition to the full AHV/IV/EO/ALV contributions, the employer also pays the employee’s BVG contribution and/or taxes, the corresponding amounts must be added before the net wage is calculated. 

For a detailed calculation of the employment costs of your domestic help we recommend our Wage calculator. 

You will find more information on wage contributions in our glossary under the keywords «Gross wage», «AHV contributions», «Withholding tax», «Accident insurance (UVG)» as well as «Pension fund (BVG)». 

O

Occupational accident (BU) 

Occupational accidents (BU) are accidents sustained by employees during work carried out at the employer’s request or in the employer’s interest. Occupational accidents include accidents occurring during breaks from work and before and after work, when employees are present at the workplace in an authorised manner. 

All employees in Switzerland must be compulsorily insured by their employer against occupational accidents in accordance with the Swiss Accident Insurance Act (UVG). Non-occupational accident insurance (NBU) is also mandatory for employers with a minimum of 8 working hours per week.  

The accident insurance is automatically taken out by quitt. for all customers with Baloise InsuranceOur accident insurance solution is aimed exclusively at private employers of domestic staff. 

You can find further information on the subject of «occupational accidents» in the glossary under the entries «Accident», «Accident insurance» and in our blog post «Accidents in the household». 

Old age and survivors’ insurance (AHV) 

The AHV is the most important pillar of old-age and survivors’ provision in Switzerland (1st pillar). AHV is compulsory for everyone as a public insurance scheme. 

Employees who live in Switzerland have to be insured with the AHV. For employers of domestic employees (cleaner, nanny, carer of the elderly) each paid activity is subject to contribution. In addition to the contribution to the AHV, employers and employees pay the compulsory contributions to the disability insurance (IV), the Compensation system for loss of earned income during military service, civil service, community service or maternity (EO), the unemployment insurance (ALV), the family equalization fund (FAK) and if applicable to sick pay insurance (KTG) and the pension fund (BVG). Social security contribution rates are calculated on the basis of the gross wage. 

An exception are pocket money jobs. Since January 1st 2015, youngsters who work till the end of the 25th year of their life in a private household and earn less than CHF 750.00 a year are exempt from AHV contributions. Youngsters are subject to contributions as of January 1st after their 17th birthday. 

For a detailed estimate of your domestic help’s labour cost we recommend our Wage calculator. 

You will find more information on AHV contributions in our glossary under the keywords «Gross wage», «Net wage», «Family supplements», «Accident insurance (UVG)», «Domestic employees at retirement age» as well as in our blog post on «Pocket money jobs». 

Out-of pocket expenses 

Out-of-pocket expenses are expenses incurred by the employee in carrying out his work  

The employer has to reimburse expenses that incur during the activity of employment. This applies in case the cleaner has to buy cleaning agent or the nanny picks up the kids with her own car and thus spends money on petrol. These out-of pocket expenses have to be reimbursed to the employee and are exempt from AHV, IV and EO contributions. 

P

Payment in Kind 

All forms of remuneration that do not pay in money are called payment in kind. In the context of employment in private households this usually includes meals and lodging at the employer’s home (board and lodge). The law prescribes the equivalent value in money of remuneration in form of payment in kind (full board and lodge for example equals CHF 990.- per month). 
Just like a regular salary, payment in kind is subject to social security contributions. Payment in kind includes all benefits to the employee that do not exclusively incur out of operational necessity (see
out-of pocket expenses). 

Pension fund (BVG) 

Employers are obliged to register employees with a pension fund in case their gross salary exceeds CHF 1’777.50 per month or CHF 21’330 per year (status 2019).  

The pension fund is a pension provision institution for employees of a company as part of the company pension scheme. The pension fund manages the assets and later pays out the retirement pensions or the retirement capital (pension benefits).  

All employees who are already insured under pillar 1 and earn at least CHF 21,330 per year (as of 2019) are insured. Compulsory insurance begins at the start of the employment relationship, at the earliest at the age of 17. For the time being up to the age of 24  the contributions only cover the risks of death and disability. From the age of 24 until the end of employment, additional savings are made for the old-age pension. 

quitt. collaborates with the pension fund PK-AETAS. To calculate your contribution rates we recommend our wage calculator. 

Pregnancy 

In case of pregnancy of an employee the employer must continue to pay her regular salary. If the employee becomes unable to work due to pregnancy, the employer must continue to pay her salary for a limited period of time (Article 7 in the Contract of employment by quitt.). 

Public holidays 

The federal holiday on August 1st is the only nationwide public holiday that has to be paid by law. It is not allowed to work on this day and the lost working hours needn’t to be compensated by the employee. 

According to labour law, this day is equal to Sundays. Cantons are allowed to equate a maximum of eight more public holidays with Sundays. 

On public holidays no employees can be employed. The lost working hours needn’t be compensated. 

Domestic employees who are paid on a monthly basis receive their full salary for the lost working hours owing to a public holiday. Unless otherwise stated in the contact of employment, to domestic employees who are paid on an hourly basis only August 1sthas to be disbursed. 

 

Q

R

Retirement age 

In Switzerland, the retirement age determines the age at which a person can receive the legal old-age pension from the old-age and survivors’ insurance (AHV). It is also known as the ordinary retirement age. At present, this is 64 for women and 65 for men. 

For domestic employees at retirement age, a tax free amount of CHF 1’400 a month resp. CHF 16800 a year applies. Contributions to AHV, IV and EO only have to be paid for the part of the salary that exceeds these amounts. If the employee works for more than one employer at the same time, the tax free amount applies to each individual employment relationship. The contribution to the unemployment insurance (ALV) does not apply at all. However, the compulsory accident insurance and the disbursement of the withholding tax applies to domestic employees at retirement age as well. 

The simplified billing procedure is only possible for the accounting of domestic employees at retirement age if the salary does not exceed CHF 16,800.00 (pensioner allowance) per year, otherwise the registration as an employer must take place in accordance with the ordinary procedure.   

Further information on the accounting procedures can also be found in the blog post «Simplified vs. ordinary accounting procedures». 

S

Safety at Work 

The employer must respect and protect the personality of the employee, be considerate of his or her health and make sure that moral standards are maintained in the context of the employer-employee relationship (Article 328 of the Swiss Code of Obligations). 

Safety at work is a desirable, hazard-free condition during the performance of professional duties. The aim is to avoid personal harm as a result of injuries (accidents), occupational diseases and other harmful influences on health. 

Sickness

Employers are required to continue to pay their employees 100% of their wages in the event of illness for a certain period of time. According to the Swiss Code of Obligations, the minimum duration is three weeks in the first year of service; thereafter, the salary must be paid for a reasonably longer period, depending on the duration of the employment relationship and the special circumstances. In accordance with court practice, wages are based on the chart of continued payment of wages. Other agreements are possible, but they must be at least of equal value for the employees and must be specified in writing (e.g. in the employment contract) or in the normal employment contract / collective agreement. 

If the employer has taken out optional sick pay insurance, he continues to pay at least 80% of the employee’s average salary during the waiting period (at quitt. the waiting period equals 30 days). If the employee is unable to return to work within the waiting period, sick pay insurance will kick in. The employee will receive 80% of his or her salary for up to a maximum of 730 days. 

You will find more information on sickness and sick pay insurance in our glossary under the keywords«Sick pay insurance (KTG)» and in our blog post «Continued payment of wages in case of sickness». 

Sick pay insurance (KTG) 

Taking out sick pay insurance is optional for employers. Sick pay insurance protects employers from the lawful obligation of continued payment of wages (see also Sickness)and the domestic help from an early loss of salary. 

If the employer has taken out optional sick pay insurance, he continues to pay at least 80% of the employee’s average salary during the waiting period (at quitt. the waiting period equals 30 days). If the employee is unable to return to work within the waiting period, sick pay insurance will kick in. The employee will receive 80% of his or her salary for up to a maximum of 730 days. The costs for the insurance premium (2% of the gross salary) are equally shared between employer and employee. quitt. takes out sick pay insurance for all customers with Baloise InsuranceOur sick pay insurance package is exclusively offered to private employers of domestic employees. 

You can select the sick pay insurance during the registration process or add it to your product selection in your quitt.account at any time. Further information on this supplementary insurance is available here.  

Simplified billing procedure 

The simplified billing procedure is an administrative simplification for all those who employ someone with a low income (e.g. domestic help) or who have several employees with a low annual total wage.  

Employers of domestic employees can sign up for the so-called simplified billing procedure with tax deduction (BGSA) at the compensation office. This procedure has specifically been designed for domestic employees and applies a flat tax rate of 5% to all employees – independent of their origin and residence status. Employers benefit from this procedure by avoiding additional administrative fees for the issuance of the withholding tax by the Cantonal tax office. 

The subscription to the simplified billing procedure is only possible if the gross wage of each individual employee doesn’t exceed CHF 1’777.50 per month or CHF 21’330 per year. The total gross sum of salary of the company or employer shall not exceed CHF 56’880 per year. 

If these criteria are not met, the private employer will be subject to the ordinary billing procedure. 

Further information on the billing procedures can also be found in the blog post «Simplified vs. ordinary billing procedures». 

T

Termination

If the relationship between the employer and the employee is not regulated by a temporary contract, both parties can terminate the contract by complying with the contractual period of notice. 

Regardless of the ground for giving notice, termination has to be carried out in accordance with the contractual notice period (Article 335c of the Swiss Code of Obligations) and under specification of the most relevant data. These include name and address of the employer, reference to the contract of employment in question, day of termination and day, place and signature of the employer. It is generally recommended to put termination always in writing.
The employee is protected against termination during military and civil service or civil defence, sickness, pregnancy or after an accident. The legal blocking periods (Article 336c of the Swiss Code of Obligations) apply. Terminations can only be legally effective after the end of blocking periods. 

You can find out more about termination and a template for a letter of termination in our blog post «Letter of termination». 

U

V

Vacation

According to Article 329a of the Swiss Code of Obligations employees have the right to a minimum of four weeks of paid vacation per year of service. Five weeks are applicable for employees up to their completed 20th year of life. 

If salary has been stipulated on an hourly basis in the contract of employment, vacation can be compensated with a wage benefit of 8,33% (for four weeks) or 10,64% (for five weeks). In this case the employer does not continue to pay the employee’s salary during vacation. 

If salary has been stipulated on a monthly basis in the contract of employment, the employer continues to pay the employee’s salary during vacation. 

W

Withholding tax 

Withholding tax is a tax deducted directly from income. 

The income of foreign employees is subject to withholding tax. The employer is obliged to deduct this tax directly from the income of his/her employee. Subject to withholding tax are people who are neither in possession of a Swiss passport nor a residence permit (C) nor married to somebody holding a Swiss passport or residence permit (C). The withholding tax rate takes the work and life situation of each individual domestic help into account. The rate is established by the Cantonal tax office.
In the case of the so-called simplified billing procedure for private employers of domestic employees the applicable withholding tax rate for all employees  independent of their origin and residence status  is 5%.
You will find more information on «Withholding tax» in our glossary under the keyword «Simplified billing procedure». 

Work permit 

According to the law (Art. 330a OR), the employer is bound to provide the employee with a work certificate at any time. Furthermore, the certificate may be issued during the employment relationship in the form of an interim certificate or as a final certificate at the end of the employment.  

You can find more information on the subject and a template for a letter of termination in our blog «Work certificate» 

Work permit 

Whether someone receives a work permit in Switzerland depends on various factors, such as the country of origin, education and skills, and fixed quotas. 

Employers who employ or intend to employ foreign domestic employees are in certain cases subject to registration and licence requirements according to aliens law. The necessity of registration and licence requirements depends on the country of origin of the employee. 

The registration and licence requirements process according to aliens law is not part of the services of quitt. For more information we recommend you contact the Cantonal migration office. 

X

Y

Z

×Close search
Search