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Why is it better to agree on a gross wage rather than a cash wage with my domestic help?

  • Updated:
  • Bernhard Bircher-Suits

All taxes such as social security contributions and insurance premiums are calculated on the basis of the gross wage.

The gross wage is the wage from which all employee contributions are deducted. The net wage, on the other hand, is the wage paid to the domestic help (also known as the cash wage). The amount of contributions changes regularly (they are usually increased). If you have agreed to pay the cash wage to your domestic help, you will also have to pay the proportionate increase of the employee’s contributions. This means that an increase in contributions has a one-sided effect only on your employer’s costs.