- Overview: Switzerland
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global PEO and Payroll in Switzerland
Getting your business up-and-running in Switzerland can be challenging, especially if you do not speak the native language. Establishing your own business entity in Switzerland is an option to be considered as you expand abroad. But before you invest valuable resources in setting up business in Switzerland, you should be fully aware of the risks involved.
Acumen’s Global PEO and Payroll solution was designed especially for companies like yours, to smooth the way for quick, easy and risk-free business operations in Switzerland, without having to establish a legal business entity.
Acumen International – Your Professional Employer Organization in Switzerland
Navigating the Swiss legal system and adhering to regulations governing employment and taxation can be challenging for businesses, especially if you are not a native Swiss speaker. Partnering with Acumen International as a global Professional Employer organization (PEO) provides you with the local knowledge and support you need to conduct business in Switzerland without concern for legal and compliance risks.
Whether you represent international client companies or you are taking your own business operations abroad, Acumen International’s Global PEO and payroll service allows you to hire and payroll local and expat employees in Switzerland. With Acumen in your corner, you can quickly and easily onboard and compensate your employees without risk of legal repercussions.
International Global Payroll and Taxation in Switzerland
Employment related taxes
Income tax is imposed by the Swiss federation and the Swiss cantons and communes. The income tax rates vary from canton to canton, and within the canton from commune to commune. They are generally at progressive tax rates.
Tax resident employees. A foreign national is subject to unlimited taxation in Switzerland if they either:
- Effectively establish their home in Switzerland.
- Remain in Switzerland without any significant interruption for at least 30 days with employment activity (or for at least 90 days without employment activity).
In these instances, the foreign national is a Swiss tax resident subject to Swiss federal, cantonal and communal income tax on their worldwide income, regardless of source. This includes income from gainful activities performed in Switzerland. Certain exceptions apply to this rule: income from enterprises, permanent establishments or real estate situated outside Switzerland is, subject to the progression provision, exempt from Swiss income tax. Further, an exception applies to foreign nationals domiciled in a country with a double taxation treaty with Switzerland.
Unless the foreign national has been granted a residency permit C or is married to a Swiss national or a holder of residency permit C, the foreign national is subject to tax on employment income at source.
Residents have to file their tax returns by either the 15 or 31 March of every calendar year depending upon their canton of residence. If the taxpayer fails to file their tax return on time, they may be subject to default taxation. In such a case, the tax authorities will assess the taxpayer on the basis of a reasonable estimate. This tax basis would usually be substantially higher than the actual tax basis and is likely to be more expensive for the taxpayer.
Non-tax resident employees. Non-Swiss tax resident foreign nationals are only subject to tax on income from performing a gainful activity in Switzerland (and certain other types of Swiss source income, for example, directors’ fees). Non-resident foreign national workers are subject to income tax at source. Income tax at source is a final tax. The employee is not required to file a tax return.
An exception applies to foreign nationals domiciled in a country with a double taxation treaty with Switzerland who is assigned to Switzerland for no more than 183 days by an employer. Subject to the conditions in the applicable treaty, the employee’s state of residence can continue to levy income taxes on dependent personal services rendered by the employee in Switzerland. In this case, Switzerland cannot impose income tax on the employment income.
Payroll Cycle in Switzerland
There is no specific requirement paid a salary at the end of the calendar month Swiss law explicitly provides that the salary paid to employees must be stated in a pay slip deducting all applicable social security contributions and withholding taxes (if any).
Non-payroll taxes in Switzerland
As a matter of principle, proceeds of sales made and services provided in Switzerland are subject to VAT.
Any person, regardless of legal form, objects, and intention to make a profit, is liable to VAT if that person carries on a business and is not exempt from the tax liability. A person carries on a business if the person independently performs a professional or commercial activity with the aim of sustainably earning income from supplies and acts externally under the person’s own name. Taxable persons must register with the Swiss Federal Tax Administration of their own accord in writing within certain deadlines. A registered taxpayer generally is entitled to offset the amount of VAT charged by suppliers or paid on imports against the VAT payable.
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How Acumen’s International PEO and Payroll Service can Benefit Your Business in Switzerland
Compensating your local and expat workforce in Switzerland and closely adhering to Swiss taxation requirements can divert your attention and resources from activities that help your business grow. A reliable global employment solution like Acumen’s Global PEO and Payroll service can take a substantial burden off your shoulders so you can focus on running your company.
Outsourcing the administrative and compliance tasks involved in employee payroll is one approach, but we have a better solution. Acumen International offers a global PEO and payroll solution that goes beyond outsourcing. We hire and compensate your global workforce on your behalf, and take care of all the details of payroll while ensuring full compliance with Swiss labor and taxation laws.
It is important to note that Acumen does not provide international global payroll services as a standalone solution, but only as a part of our global PEO and Payroll solution.
Our comprehensive global PEO and payroll services are just some of the benefits of partnering with Acumen International. We make it easy for you to achieve your business goals in Switzerland by officially employing and compensating your best selected global talent – both locals and expats – without concerns for legal and compliance risks faced by global employers.
Disclaimer: Any of the above information is subject to changes imposed by Swiss laws. To get the latest updates on taxation in Switzerland and in 190 countries worldwide, contact Acumen’s team of global employment experts.