Every company that pays salaries in Switzerland must contribute to the social insurance system. The obligations begin before the first pay slip is issued and continue as long as the company employs staff — including a sole owner-director drawing a salary. Failure to register or contribute triggers retroactive assessments, penalty interest, and in serious cases personal liability for directors under OR Art. 52.
This guide sets out each mandatory contribution, the current rates, the registration process, and a worked cost example for a typical GmbH. For the broader pension framework including the second and third pillars, see our Swiss pension system guide. For ongoing filing deadlines, see annual compliance.
What social insurance must a Swiss employer pay?
Swiss social insurance operates on a layered model. The employer’s mandatory contributions fall into six categories:
| Contribution | Legal Basis | Employer Rate | Employee Rate | Salary Cap |
|---|---|---|---|---|
| AHV (old-age & survivors) | AHVG | 4.35% | 4.35% | None |
| IV (disability) | IVG | 0.7% | 0.7% | None |
| EO (income compensation / maternity) | EOG | 0.25% | 0.25% | None |
| ALV (unemployment) | AVIG | 1.1% | 1.1% | CHF 148,200 |
| ALV solidarity | AVIG | 0.5% | 0.5% | Above CHF 148,200 |
| UVG BU (occupational accident) | UVG | 0.04–3%+ | — | CHF 148,200 |
| UVG NBU (non-occupational accident) | UVG | — | 0.7–2.5% | CHF 148,200 |
| FAK (family allowances) | FamZG | 1–3.5% | — | Varies by canton |
The combined AHV/IV/EO rate is 5.3% employer + 5.3% employee = 10.6% of gross salary. This rate has remained stable since 2021 following the AHV 21 reform financing through a VAT increase rather than a contribution increase.
Key principle: employer and employee each pay exactly half of AHV/IV/EO. The employer deducts the employee’s share from gross salary and remits both halves to the compensation office in a single payment.
What are the AHV/IV/EO contribution rates?
AHV — Old-Age and Survivors’ Insurance
AHV is the first pillar of the Swiss pension system. It provides a basic retirement pension, survivors’ benefits, and supplementary benefits. The contribution rate is 8.7% of gross salary, split equally:
- Employer: 4.35%
- Employee: 4.35%
There is no salary cap on AHV contributions. A director earning CHF 500,000 pays AHV on the full amount. This distinguishes Switzerland from countries like Germany or France where social security contributions are capped.
The contribution obligation begins at age 18 for employed persons (age 21 for non-employed persons) and ends at the reference retirement age — currently 65 for men and 64 for women, rising to 65 for women by 2028 under AHV 21.
IV — Disability Insurance
IV provides benefits for persons unable to work due to disability. The rate is 1.4% split equally (0.7% each). No salary cap applies.
EO — Income Compensation Allowances
EO covers income loss during military service, civil service, civil defence, and — since 2005 — maternity leave. The 2024 reform added a two-week paternity leave financed through EO. The rate is 0.5% split equally (0.25% each). No salary cap.
Combined First-Pillar Rate
| Component | Total Rate | Employer | Employee |
|---|---|---|---|
| AHV | 8.7% | 4.35% | 4.35% |
| IV | 1.4% | 0.7% | 0.7% |
| EO | 0.5% | 0.25% | 0.25% |
| Total | 10.6% | 5.3% | 5.3% |
The compensation office collects all three components in a single invoice, typically quarterly.
How does unemployment insurance (ALV) work?
Unemployment insurance (Arbeitslosenversicherung, ALV) is governed by the Federal Unemployment Insurance Act (AVIG). Contributions apply to gross salary up to a ceiling:
| Band | Rate | Split |
|---|---|---|
| Salary up to CHF 148,200 | 2.2% | 1.1% employer + 1.1% employee |
| Salary above CHF 148,200 | 1.0% (solidarity) | 0.5% employer + 0.5% employee |
The CHF 148,200 threshold is the maximum insured salary under UVG and is adjusted periodically. The solidarity surcharge on high salaries was introduced in 2011 and has no upper limit.
Practical impact: for a director earning CHF 200,000, ALV contributions are:
- On the first CHF 148,200: CHF 1,630 employer + CHF 1,630 employee
- On the remaining CHF 51,800: CHF 259 employer + CHF 259 employee
- Total ALV: CHF 3,778 (CHF 1,889 per side)
What accident insurance must employers provide?
The Federal Accident Insurance Act (UVG) requires every employer to insure employees against:
Occupational accidents (BU — Berufsunfallversicherung). Covers injuries and diseases arising from work. The employer pays 100% of the premium. Rates vary by industry risk class:
| Industry | Typical BU Rate |
|---|---|
| Office / consulting | 0.04–0.15% |
| Retail / hospitality | 0.3–0.8% |
| Manufacturing | 0.5–2.0% |
| Construction | 1.5–3.5% |
| Forestry / mining | 3.0%+ |
Non-occupational accidents (NBU — Nichtberufsunfallversicherung). Covers injuries outside work (sport, travel, household). Employees working 8+ hours per week for the same employer are automatically covered. The employee pays the NBU premium through salary deduction (typically 0.7–2.5%). The employer arranges the policy and handles administration.
Insured salary cap: CHF 148,200. Earnings above this amount are not covered by UVG. Companies wishing to insure higher salaries must arrange supplementary accident insurance (UVG-Zusatzversicherung) separately.
Mandatory insurer: Companies in high-risk industries (construction, forestry, tunnelling) must insure through Suva (Schweizerische Unfallversicherungsanstalt). All other companies may choose between Suva, a private insurer, or a recognised health fund.
What are family allowances (FAK)?
The Federal Family Allowances Act (FamZG) requires employers to pay family allowance contributions (Familienzulagen, FAK). The contribution is 100% employer-funded — nothing is deducted from the employee’s salary.
Minimum monthly allowances per child set by federal law:
| Allowance | Monthly Minimum |
|---|---|
| Child allowance (up to age 16) | CHF 200 |
| Education allowance (age 16–25) | CHF 250 |
Many cantons set higher amounts. Geneva pays CHF 300/311 per child; Valais, Fribourg, and Jura also exceed federal minimums.
The employer contribution rate varies by canton and compensation office, typically 1.0% to 3.5% of gross salary. The compensation office collects FAK contributions alongside AHV/IV/EO. There is no salary cap.
When is daily sickness insurance required?
Daily sickness allowance insurance (Krankentaggeldversicherung, KTG) is not mandatory under federal law. However, without KTG the employer bears continued salary payment obligations under OR Art. 324a:
| Years of Service | Continued Payment Period |
|---|---|
| 1st year | 3 weeks |
| 2nd year | 1 month |
| 3rd–4th year | 2 months |
| 5th–9th year | 3 months |
| 10th–14th year | 4 months |
| 15th–19th year | 5 months |
| 20+ years | 6 months |
The exact duration depends on which cantonal scale (Berner, Basler, or Zuercher) the local courts apply. Long-term illness of a single employee can represent a five- or six-figure cost to the employer.
In practice, KTG is standard. A typical policy covers 80% of salary for up to 720 or 730 days of illness per case. Premiums range from 0.5% to 2% of insured salary and are usually split 50/50 between employer and employee. The policy must cover at least the same level of benefit as OR Art. 324a — otherwise the employer remains liable for the difference.
Some cantons (notably Geneva) make KTG mandatory by cantonal law.
What about occupational pension (BVG)?
Occupational pension (berufliche Vorsorge, BVG) is the second pillar of the Swiss pension system. The employer must affiliate with a pension fund (Pensionskasse or Sammelstiftung) and insure all employees who meet two conditions:
- Annual salary exceeds the BVG entry threshold: CHF 22,050
- Employment contract is permanent or exceeds three months
The insured salary is the coordinated salary — gross salary minus the coordination deduction (CHF 25,725 in 2026), capped at CHF 62,475. The minimum BVG contribution rates increase with age:
| Age Band | Employee + Employer Combined |
|---|---|
| 25–34 | 7% |
| 35–44 | 10% |
| 45–54 | 15% |
| 55–64/65 | 18% |
The employer must pay at least 50% of the total contribution. Many employers pay 60% or more as an employee benefit. The pension fund’s regulations (Vorsorgereglement) specify the exact split and may provide benefits above the BVG minimum — known as the super-obligatory portion (ueberobligatorischer Teil).
For a detailed explanation of the pension system including the third pillar (3a/3b), see our Swiss pension system guide.
How do you register as an employer with a compensation office?
Registration must happen before the first salary is paid. The process:
Step 1 — Choose a compensation office. Every canton operates a cantonal compensation office (kantonale Ausgleichskasse). In addition, industry-specific compensation offices (Verbandsausgleichskassen) serve employers in certain sectors. A GmbH or AG can register with either the cantonal office where the company is domiciled or an industry-specific office.
Step 2 — Submit the registration form. The form requires:
- Company name and UID number
- Commercial register extract
- Date of first salary payment
- Expected number of employees
- Estimated annual payroll
- Details of the responsible person (managing director)
Step 3 — Receive employer number. The compensation office assigns an employer number (Arbeitgebernummer) and sends confirmation with payment instructions. Processing takes one to two weeks.
Step 4 — Arrange UVG and BVG. Separately from the compensation office registration, the employer must:
- Place accident insurance (UVG) with Suva or a private insurer
- Affiliate with a pension fund (BVG) if any employee exceeds the CHF 22,050 threshold
Ongoing obligations:
- Quarterly (or monthly, depending on size) payment of AHV/IV/EO/ALV/FAK contributions based on estimated annual payroll
- Annual salary declaration (Lohndeklaration) by 30 January of the following year
- The compensation office reconciles actual salaries against estimated contributions and issues a final settlement
What does this cost for a typical GmbH?
Worked example: a GmbH in Zurich with one managing director (owner, salary CHF 120,000) and one employee (salary CHF 85,000). Total payroll: CHF 205,000.
| Contribution | Rate (Employer) | Director (CHF 120,000) | Employee (CHF 85,000) | Total Employer Cost |
|---|---|---|---|---|
| AHV/IV/EO | 5.3% | CHF 6,360 | CHF 4,505 | CHF 10,865 |
| ALV | 1.1% | CHF 1,320 | CHF 935 | CHF 2,255 |
| UVG BU (office) | 0.08% | CHF 96 | CHF 68 | CHF 164 |
| FAK (Zurich) | 1.2% | CHF 1,440 | CHF 1,020 | CHF 2,460 |
| KTG (50% share) | 0.6% | CHF 360 | CHF 255 | CHF 615 |
| BVG (60% share, est.) | ~5.4% | CHF 3,100 | CHF 1,900 | CHF 5,000 |
| Total employer cost | CHF 12,676 | CHF 8,683 | CHF 21,359 |
The employer’s social insurance burden in this example is approximately 10.4% of total payroll. Adding the employee-side deductions (which reduce net salary but are collected by the employer), the total cost to the company is higher — but only the employer share represents an additional cost above gross salary.
Rule of thumb: budget 10–12% on top of gross salaries for employer social insurance contributions. The exact figure depends on canton (FAK rates), industry (UVG rates), workforce age profile (BVG rates), and chosen pension plan generosity.
What are the rules for managing directors who own the company?
A managing director (Geschaeftsfuehrer in a GmbH, Verwaltungsratsmitglied in an AG) who holds shares is classified as an employee for social insurance purposes, regardless of ownership percentage. This means:
- The company must pay AHV/IV/EO, ALV, UVG, and FAK on the director’s salary
- The director is subject to BVG if salary exceeds CHF 22,050
- Dividend income is not subject to AHV contributions
The salary-dividend split matters. Compensation offices and tax authorities scrutinise the allocation between salary and dividends. If the director pays himself a token salary (say, CHF 30,000) while extracting CHF 200,000 in dividends, the compensation office may reclassify part of the dividend as hidden salary (verdeckter Lohn) and assess back-contributions plus interest.
The commonly applied safe threshold is that the salary should represent at least 60% of total compensation (salary plus dividends). This is not a statutory rule but reflects established practice of the compensation offices and Federal Court decisions.
Self-employed status is not an option for a GmbH or AG director. Self-employed status (Selbststaendige Erwerbstaetigkeit) is reserved for sole proprietors and general partners who bear personal economic risk. A GmbH director with limited liability is by definition not self-employed for social insurance purposes, even if they own 100% of the company.
What happens if you miss social insurance payments?
The consequences escalate:
Late payment interest. The compensation office charges 5% annual interest on overdue contributions, calculated from the due date. This rate is set by the AHVV (AHV Regulation) and applies uniformly across all compensation offices.
Estimated assessment. If the employer fails to submit the annual salary declaration, the compensation office issues a discretionary assessment (Ermessensveranlagung) based on estimated payroll. These assessments tend to be higher than actual obligations, and the employer bears the burden of correcting them with proper documentation.
Employer liability. Under AHVG Art. 52, directors and officers are personally liable for unpaid social insurance contributions if they caused the non-payment through intentional or negligent conduct. This liability survives the company — if the GmbH or AG becomes insolvent, the compensation office can pursue the directors personally for the outstanding contributions plus interest.
Criminal penalties. Intentional failure to deduct and remit employee contributions constitutes misappropriation (Zweckentfremdung von Arbeitnehmerbeitraegen) under AHVG Art. 87. This is a criminal offence punishable by a fine of up to CHF 10,000 or imprisonment. Negligent failure is also punishable by fine.
The most common trigger for enforcement action is a company that deducts social insurance from employee salaries but fails to remit the amounts to the compensation office — effectively using employee contributions as working capital. Compensation offices actively monitor for this pattern.
Why you can trust this guide
This guide is written by Florian Rosenberg, a former fiduciary office manager who has handled social insurance registration and compliance for over 200 Swiss company formations. All contribution rates are current as of 2026. Legal references cite the federal acts directly — AHVG, AVIG, UVG, and FamZG — so you can verify any point against the primary source.