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You've just hired your first employee — or you're about to — and you have countless questions about social charges, pension contributions, withholding tax or family allowances? This FAQ covers the most common questions.
AHV and the 1st pillar
What is AHV?
AHV (old-age and survivors' insurance) is the cornerstone of the Swiss social security system. It guarantees a basic income in retirement or upon the death of a spouse. Together with IV, EO and ALV, it forms the 1st pillar, funded by salary contributions.
What are the 1st pillar contribution rates?
Contributions are split equally (50/50) between employer and employee:
- AHV (old-age and survivors' insurance): 8.70% — 4.35% employer + 4.35% employee
- IV (disability insurance): 1.40% — 0.70% + 0.70%
- EO (income compensation allowances): 0.50% — 0.25% + 0.25%
- ALV (unemployment insurance): 2.20% — 1.10% + 1.10%
Total: 12.80% of gross salary (6.40% for each party). ALV is capped at an annual salary of CHF 148,200.
Are there age brackets for AHV?
No. AHV/IV/EO/ALV rates are the same regardless of the employee's age. Age brackets only apply to BVG (2nd pillar) — see the BVG section below.
Where to register with a compensation office?
Two options: the cantonal compensation office for your registered canton or an inter-professional compensation office linked to an employers' association. Registration must be completed before the first salary payment.
UVG (accident insurance)
What is UVG?
UVG (Federal Act on Accident Insurance) covers occupational accidents and, for employees working more than 8 hours per week, non-occupational accidents (NBU). The maximum insured salary is CHF 148,200/year.
Is NBU insurance mandatory?
Yes, for every employee working more than 8 hours per week for the same employer. The NBU premium is paid by the employee; the occupational accident (BU) premium is paid by the employer.
SUVA or private insurer?
It depends on your industry. SUVA is the mandatory insurer for manufacturing, construction, transport and many other sectors listed by law. If your company doesn't fall under SUVA, you must take out insurance with a private insurer (or your company health fund).
BVG (2nd pillar)
What is BVG?
BVG (Federal Act on Occupational Pensions) constitutes the 2nd pillar of the Swiss system. It supplements AHV by building retirement capital through a pension fund. Contributions are shared between employer and employee, with the employer covering at least 50% of the total contribution.
Is BVG mandatory?
Yes, for every employee with an annual salary above CHF 22,680 (2025 entry threshold). Below this amount, the employee is not subject to mandatory BVG.
What are the BVG rates by age bracket?
Retirement credits (savings contributions) are calculated as a percentage of the coordinated salary and increase with age:
Minimum BVG retirement credits
| Age bracket | Total rate | Employer (min.) | Employee (max.) |
|---|---|---|---|
| 25 – 34 years | 7% | 3.5% | 3.5% |
| 35 – 44 years | 10% | 5% | 5% |
| 45 – 54 years | 15% | 7.5% | 7.5% |
| 55 – 65 years | 18% | 9% | 9% |
The coordinated salary equals the annual salary minus the coordination deduction (CHF 25,725 in 2025). The minimum coordinated salary is CHF 3,675 and the maximum is CHF 62,475.
Good to know
Many pension funds offer supra-mandatory plans with higher rates. The BVG rates shown here represent the legal minimum. Your fund may apply more generous rates.
KTG (daily sickness benefits)
What is KTG?
KTG is an insurance that covers salary payments during extended illness. The market standard is coverage of 80% of gross salary for 720 days, after a waiting period of 30 to 60 days.
Is KTG mandatory?
No, KTG is not legally mandatory. However, without this insurance, the employer must continue paying the salary during illness according to the Bern Scale (duration increases with years of service: 3 weeks in the first year, then more). KTG is therefore strongly recommended to protect both employer and employee.
The premium is typically split 50/50 between employer and employee.
Withholding tax
Who is subject to withholding tax?
Foreign employees without a C permit (B, L, G permits) are subject to withholding tax. The employer deducts the tax directly from the salary and remits it monthly to the cantonal tax authority.
Are family allowances included in the salary subject to withholding tax?
No. Family allowances are not part of the salary subject to withholding tax. They are paid on top of the net salary and are not subject to withholding tax.
How are French cross-border workers taxed?
A bilateral agreement between France and Switzerland governs the taxation of cross-border workers. In the cantons of BE, BS, BL, JU, NE, SO, VD and VS, French cross-border workers are taxed in France (no withholding tax in Switzerland). In the canton of Geneva, they are taxed at source in Switzerland.
Reminder
The employer receives a collection commission of 1 to 2% of the tax withheld. Don't forget to account for it!
Family allowances
How do family allowances work?
Family allowances are funded exclusively by the employer through a contribution to the family compensation fund (CAF). The amount varies by canton. They are paid to the employee on top of the net salary, for each dependent child.
Two types of allowances exist: the child allowance (from birth to age 16) and the education allowance (from 16 to 25, if the child is in education). Some cantons pay a supplement from the 3rd child onward.
2025 amounts by canton
Monthly family allowances 2025 (in CHF)
| Canton | Child | Education | From 3rd child | From 3rd in education |
|---|---|---|---|---|
| Federal minimum | 215 | 268 | — | — |
| BE | 230 | 290 | — | — |
| FR | 265 | 325 | 285 | 345 |
| GE | 311 | 415 | 411 | 515 |
| JU | 275 | 325 | — | — |
| NE | 220 | 300 | 250 | 330 |
| VD | 300 | 400 | 343 | 443 |
| VS | 305 | 445 | 413 | 553 |
2026 amounts by canton
Monthly family allowances 2026 (in CHF)
| Canton | Child | Education | From 3rd child | From 3rd in education |
|---|---|---|---|---|
| Federal minimum | 215 | 268 | — | — |
| BE | 250 | 310 | — | — |
| FR | 265 | 325 | 285 | 345 |
| GE | 311 | 415 | 411 | 515 |
| JU | 275 | 325 | — | — |
| NE | 240 | 320 | 270 | 350 |
| VD | 322 | 425 | 365 | 468 |
| VS | 327 | 477 | 435 | 585 |
Miscellaneous questions
Is a French PACS recognised in Switzerland?
A French PACS (civil solidarity pact) is not equivalent to a Swiss registered partnership. For withholding tax purposes, an employee with a French PACS is generally treated as single (tariff A or H depending on the situation) and not as married (tariff B or C).
This distinction directly impacts the amount of tax withheld. If your employee has a French PACS, check with the cantonal tax authority for the applicable tariff.