Many small businesses that are just starting out in Switzerland are unaware of the many different types of social charges and insurances that are compulsory in Switzerland when you pay a salary from a business you have registered. Here we give a brief run-down of what these are:
- OASI (AVS or AHV) – Old Age and Survivors’ Insurance
- AI (IV) – Federal Invalidity Insurance
- APG (EO) – Loss of earnings insurance
- UE (AC or AV) – Unemployment insurance
- ALFA – Family allowances
- Some other Cantonal-specific insurances
The above insurances can typically be contracted with an organisation that helps small businesses who will take a small fee to manage paying the amounts into the relevant insurances. In Geneva FER CIAM can be a good partner to contact. In Vaud there is the Centre Patronale or CVCI.
If the annualised salary is over CHF 21,330 then a second pillar insurance is also compulsory. This can be contracted privately and the organisations listed above will often be in a position to help in choosing an appropriate organisation.
Lastly, there are some compulsory insurances that are contracted from private insurance companies. Most notably is the professional accident insurance (LAA) which insures salaries of up to CHF 148,200 annually when working at least 8 hours per week for the same employer. In conjunction with this there is also the private accident insurance where the premiums are then often deducted from the employees’ salary. One aspect of having these insurances covered by the company is that the employee then no longer needs the same accident cover from his or her private medical insurance.
Other optional insurances also exist and the entrepreneur starting his or her new business will need to weigh up whether these are suitable given their circumstances.
For Swiss-based solopreneurs and very small businesses we recommend using EZYcount with our cost-effective plan to help simple small businesses get their accounts and legal obligations in order online.