- Overview: Switzerland
- Global PEO and payroll
- Global HR Compliance
- 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
When you consider the ever-growing international market, you may find that your business is poised to benefit from overseas expansion. However, with so many countries to choose from and a vast difference in cultural norms and laws, it can be hard to know where to start.
Given that many potential international locations have different regulations, accounting systems, and tax structures, getting the right help is crucial. The first step is finding the right partner for your business. Here are some basic concepts related to expanding internationally that any business should be familiar with before starting down the road of global expansion.
How Does a Global PEO Work? What Is the “Co-employment” Model?
Organizations that partner with a Global Professional Employer Organization (PEO) enjoy many benefits. By working with a PEO, businesses can take advantage of a co-employment relationship which can free up time and resources that can be better spent on strategic decision-making and business growth. Global PEOs are responsible for payroll, withholding and paying payroll taxes, managing compensation and benefits coverage, and providing HR compliance guidance.
The global PEO becomes a co-employer of the organization’s employees, and PEO shares the employment responsibilities of the client organization. PEOs assume many administrative and HR compliance tasks that businesses would otherwise have to handle, giving business owners and management teams more time to focus on running their companies.
In addition, Professional Employment Organizations can provide valuable services and expertise that businesses might not be able to access on their own. Using a PEO can be a great way for businesses to improve efficiency, save time and money, and gain access to valuable resources and expertise.
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 establishing a legal business entity.
Why Should You Choose a Global PEO Service Over Setting Up Legal Entities?
The main benefit of using a global PEO versus a new entity for your business setup abroad is a lack of administrative cost and burden. Your global PEO provider will handle the complex logistics of staying compliant and managing your international employees without a legal entity. However, you ultimately have the final say on what gets done. Also, by going this alternative way, you still get the most considerable benefit that setting up a foreign entity could give you – expanding your presence in a new and lucrative market.
Payroll taxes and service fees can be a big burden for employers. Many companies choose to use a Global PEO (Professional Employer Organization) to help with these costs. PEOs typically charge a percentage of the total payroll, including employee insurance fees. It can be difficult to determine the actual costs for these services, especially when some employer taxes are only paid on wages up to a certain threshold.
Single Global Service Agreement
A global PEO can cover all your international projects within a single contract and add new employees and services as you expand your global workforce in the new countries.
No Required Minimums
We accept projects of any length, with any number of employees.
Whether you need to scale up or down, we adjust your pricing based on the project employee number.
End-to-end Global Employment Solution
We manage all your global services, including employment, recruitment, immigration, legal and global HR consulting, saving you valuable time. And Acumen International covers the cost and saves you the effort of finding and selecting local employment-related service providers.
What is a Global PEO?
PEOs are professional employer organizations. That means they offer comprehensive HR solutions for small businesses across the country. By paying a single fee per employee (2), employers can outsource all their HR needs to an expert who specializes in managing this aspect of their business. Some services provided by PEOs include
- Payroll processing
- Benefits administration
- Tax reporting
- Workers’ compensation insurance
- Labor and tax compliance
Outsourcing some global employment and HR functions to a PERO means that the business owner is not bogged down with processing payroll, benefits, or securing visas ad work permits. Instead, they have more time to concentrate on other company matters, including big-picture issues.
Difference between a Global EOR and a PEO. Employment Risk Mitigation Strategy
When expanding your business into new countries, there are many benefits to using a global PEO (Professional Employment Organization) or EOR (Employer of Record). A global PEO or an EOR is an alternative to hiring your employees via an in-country legal entity. Instead of hiring your employees, you contract with a global employment solutions provider to hire and manage them for you.
A Global PEO and EOR Partners can handle all the immigration, hiring, payroll, tax, and HR compliance for you, freeing up your time to focus on other aspects of running your business. And if you ever need to leave the country, you can do so without being tied down by any long-term commitments.
However, both global PEOs and EORs work differently. So, it’s important to understand the differences between the two, so you can find the right one for your needs.
The main difference between a global EOR and a PEO is how they hire the workers. A global PEO assigns employees to the client company for employment so that it can replace the clients in their duties of hiring and managing the employees. The PEO is not a direct employer on paper. An EOR, on the other hand, is an employer of record in the country of business. They hire and terminate employees on behalf of the client company.
What Services Does a Global PEO (Professional Employment Organization) Provide?
- Global payroll management;
- Compliance with local tax rules (file & deposit) of the country where the EOR company is located;
- Handling compliant employment contracts:
- Background, education, and other checks;
- Onboarding and termination processes, as well as employee’s compensation;
- Arranging visas and work permits for employees;
- Ensuring the working process is organized under local labor laws;
- Processing workers’ medical insurance and other benefits (day-offs, bonuses, and more);
- Process maps, employment guides, and other documentation;
- Foreign immigration support services.
Why Partnering with Global PEO Is a Win-Win Solution For Businesses?
Many protections come from working with a global PEO. Their solutions offer peace of mind for business owners, especially those who work across multiple jurisdictions. For example, EU countries. have strict and ever-evolving labor and tax laws that must be adhered to by employers.
A global PEO can help by providing compliance support with labor and tax laws, insurance coverage, record keeping, and immigration issues (visa sponsorship and work permits). Also, a global PEO may provide an employer’s liability insurance policy that covers accidents that occur on the job and workers’ compensation to protect employees against injuries or death that occurs while on the job. Global PEOs can also provide administrative services such as payroll processing and benefits management to keep track of all your employee information and ensure you are in line with all necessary regulations.
5 Benefits of Using PEO (Professional Employer Organisation) Solution
- Facilitated and unified global mobility administration
- Centralized control over the global workforce
- Enhanced international employee and employer compliance
- Advice on favorable tax, benefit, and social security locations
- Reduced permanent establishment exposure risk
How to Choose a Global PEO (Professional Employer Organization) in Switzerland?
As you consider a global PEO (Professional Employer Organization Partner) to manage your employees, imagine what would go wrong if the relationship didn’t work out. How would it affect your business? What if the PEO closed its doors or went bankrupt? Can you be sure your employees are covered in all eventualities? The best global PEOs can provide peace of mind and financial protection for employers and their staff, but you must do your homework before deciding on a global PEO partner.
Looking for a global PEO that can address your industry’s specific and global employment challenges is key to finding the best service provider. A global PEO with a strong track record and fiscal stability can help you address the needs of your industry while also providing compliance expertise and support.
Global PEOs help employers by taking on both the administrative burden of HR management and the financial responsibility of workers’ compensation. An added benefit is that they help you avoid having to make payroll tax deposits, which is especially helpful for small businesses that don’t have HR staff on hand to make these payments. They may even offer technology solutions that streamline payroll processing for employers.
Acumen International – Your Single Point of Truth and Global Employment PEO Solutions Provider in Switzerland
- 100 % compliant, quick, easy market entry. Acumen Global PEO is your local legal entity, helping you reduce the cost and time associated with incorporating.
- Immediate global employment service coverage in 190 countries
- Both a single point of contact and a dedicated account manager for your project for all target countries.
- Compliant and secure global employment operations. We help you adhere to all local laws and regulations in 190 countries
- A single contract for all in-country services (employment, immigration, legal, etc.)
- A single PEO provider assumes full responsibility for your international employees in multiple countries
- Payments are made within the UK or to the UK bank company account
- Fully compliant with standardized procedures and reporting systems
- You can delegate to Acumen Global PEO all HR responsibilities Payroll & benefits administration, background checks, and HR helpdesk
- Standard payroll breakdowns for all target countries
- As soon as we receive your request for a project in any country, we will send you a payroll breakdown and offer within 2 working hours
- Full 100% fee money-back guarantee for the employee or contractor payment delays.
- Tailored and 100% compliant employment contract drafts
- With Acumen in your corner, you can quickly and easily onboard and compensate your employees without risk of legal repercussions
- Acumen Global PEO and payroll solution protects your company’s Intellectual Property rights
Global Payroll Management & Compliance Considerations
Managing employees in different countries can be a complex and challenging task. Employees may need to be registered and taxed differently in each country, and there may be other laws that need to be followed. This can make it very hard to keep track of everything and ensure everything is done correctly.
When it comes to payroll, there are many different regulations that you must follow to avoid penalties or litigation. Each country has its laws and regulations, but some standards apply internationally. You must know and adhere to tax deadlines, withholding and reporting laws, and regulations requiring employee tax slip signatures. If you fail to adhere to these payroll compliance rules, you could face severe penalties that could negatively impact your business.
Global payroll management is a complex process that requires careful consideration of various factors. Payroll specialists must consider local regulations and taxation requirements, which can be time-consuming and difficult to navigate. However, by addressing some key challenges and partnering with a Global PEO, organizations can ensure compliant, accurate, and timely payments.
Global Payroll Calculator: Accurate Global Employment Cost Estimation
When hiring employees and contractors across the globe, you may not be choosing the most cost-effective and business-friendly country.
- Do you know which country is the most cost-effective place to hire employees?
- What are the costs of entity establishment and legal representation?
- What are the payroll costs and management fees?
- What are your ongoing annual tax compliance costs?
- Are you fully aware of banking implications?
- Did you know that labor laws and hidden costs could make your company less efficient when choosing a country to run your business?
- Did you know that there could be a more cost-effective country to hire employees in and save up to 50%?
This is because countries have different labor laws, compliance, and tax regulations. What if, instead of limiting your company’s international expansion by cutting through the jungle of local regulatory compliance, tax, labor, and immigration requirements, you could have all the information of 190 countries at your fingertips?
Acumen International offers the Global Payroll Calculator to help businesses understand the compliance requirements for conducting business in a new country. Acumen’s research team tracks developments in 190 countries around the globe. It provides up-to-date data on local regulations related to tax, payroll regulations, benefits, hiring practices, compliance requirements, and other labor-related factors that impact an employer’s bottom line. This valuable information makes the Global Payroll Calculator an invaluable tool for businesses looking to expand internationally.
Global Payroll Calculator helps companies reduce labor costs by providing up-to-date information on hiring, compensation, and tax requirements. It is also an ideal tool for quickly locating employees in any country.
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.