Hiring your first employee in Switzerland: the registrations every employer needs
Taking on your first employee? Before the first payday, your business must register with several social insurance bodies: here they are, and what each one does.
As soon as a business pays a salary, it becomes an employer and must register, once and for all, with several bodies:
- the AHV/AVS compensation fund (caisse de compensation), which also collects unemployment insurance;
- a family allowance fund;
- an accident insurer;
- a pension fund, depending on the salary;
- for an employee taxed at source, the cantonal tax administration.
Why register with a compensation fund?
The compensation fund is the starting point. It collects AHV/AVS, disability and loss-of-earnings contributions as well as unemployment insurance, half of which the employer pays. In a limited liability company (Sàrl) or a company limited by shares (SA), a partner who draws a salary is an employee too, so registration starts when the company is formed, even with no other staff.
The business also joins a family allowance fund (caisse d’allocations familiales) in the canton, even if none of its staff has children. Usually it is the compensation fund itself; a branch in another canton, however, joins a fund there. In Fribourg, the employer pays these contributions in full.
Which accident insurance do your employees need?
Every employer must insure its staff against occupational accidents (assurance accidents). For some sectors, the law requires Suva, the national insurer; other businesses choose an authorised insurer. The employer pays the occupational accident premium.
Staff working at least eight hours a week for you are also covered for accidents outside work, normally at their own expense.
When do you need a pension fund?
Once an employee earns more than the minimum annual salary set by law, the employer must join a registered pension fund (institution de prévoyance). It pays at least half of the contributions.
The compensation fund checks: it asks the employer to join one within two months. Otherwise, it reports the business to the Substitute Occupational Benefit Institution (Institution supplétive), which affiliates it retroactively.
What if your employee is taxed at source?
When you hire someone taxed at source (impôt à la source), you become the “debtor of the taxable benefit” (débiteur de la prestation imposable). In Fribourg, you register with the Cantonal Tax Service (Service cantonal des contributions) on a form, then report events such as a new employee joining. You deduct the tax from each salary and pay it over monthly, and receive a collection commission for doing so.
How we can help
Before your first hire, we review the registrations with you and prepare the forms together. After that, our payroll service supports you every month.
Hiring soon? Call us, or book a meeting.
+41 26 303 36 69