Switzerland: Labour Regulation
Social Security Taxes
This page was last updated on 9 April 2021.
Social Security taxes are levied at a federal level and are payable by employees, employers and the self employed.
Resident individuals and those involved in gainful activity in Switzerland are required to contribute to the Federal Old Age and Disability Insurance plan and the mandatory federal unemployment insurance plan.
Currently, the total annual old age and disability contribution is 12.5% of total employee remuneration (no ceiling). Half is paid by the employer and half by the employee. Employers are required to deduct contributions from salary payments and to remit the total amount to the social security authorities.
Unemployment contributions are currently 2.2% of employee remuneration on annual salaries up to CHF126,000. A 'solidarity surcharge' of 0.5% is payable by both employer and employee on annual salaries of CHF126,000 to CHF315,000. From 1 January 2014 the ceiling for the 'solidarity surcharge' no longer applies, making all income above that level subject to the charge.
In most cantons, health and hospitalisation insurance is mandatory, and as a rule, virtually all employees are covered at their own expense. Their contributions depend largely on the type of benefits selected by them. Some companies voluntarily contribute to their employees' health insurance or organize group-insurance schemes for them.
Some cantons levy further payments in relation to child and family allowance schemes.
Social insurance therefore currently (2013) represents about 12.5% of an employee's salary, (not including the 0.5% 'solidarity surcharge') plus health insurance costs and some cantonal payments.
Switzerland is in the group of OECD countries with the highest unemployment benefits - more than 70% of average earnings; and in Switzerland low-paid people lose money by going back to work.
So says an OECD report in December 2007, Benefits and Wages, which provides a guide to how governments are tackling the twin challenges of supporting unemployed people while helping them back into work by tracking net benefit levels in individual countries.
A decade ago, says the OECD, countries were making it increasingly difficult to claim benefits: today many are actually cutting the level of benefits. Faced with labour shortages and pressures on pension funding due to ageing populations, one in three OECD countries has cut unemployment benefits in the last six years with a view to encouraging unemployed people to find jobs.