AHV contributions from gainfully employed persons: Contribution rates and payment obligation.
For gainfully employed and self-employed persons, the AHV contribution requirement starts from January 1 after reaching the age of 18. As of January 1, 2021, the contribution rates for gainfully employed persons changed: AHV contribution 8.7%; IV 1.4%; EO 0.5%. Half is paid by the employee and half by the employer; self-employed persons must pay the full amount by themselves.
Salary deductions in Switzerland: mandatory social insurance contributions
Anyone who performs gainful employment after the completion of their mandatory schooling must pay AHV contributions starting January 1 after their 18th birthday. Along with the AHV, they must also pay contributions for IV, EO, and ALV.
Thus, the social insurance contributions for employed persons total 12.8%, or 10.6% without ALV. Employers and employees each pay half of the contributions. For self-employed persons with an annual income of CHF 57,400 or higher, the AHV/IV/EO contribution is 10%; if the income is lower, then so is the required contribution. The minimum contribution for self-employed persons and for non-employed persons is CHF 514.
Social insurance: Contribution rates of employees and employers
Breakdown of the contributions for an annual salary of up to CHF 148,200*
|
Employer |
Gainfully employed worker |
Total |
AHV |
4.35% |
4.35% |
8.70% |
IV |
0.7% |
0.7% |
1.40% |
EO |
0.25% |
0.25% |
0.50% |
ALV |
1.1% |
1.1% |
2.20% |
Total |
6.4% |
6.4% |
12.80% |
*For an annual salary in excess of CHF 148,200, the ALV rate for the salary portions is only 1.00% instead of
2.20%
As at: January 1, 2022
Salary deductions in Switzerland: Who pays how much of the social insurance contribution?
For gainfully employed persons, the employer and employee each pay half:
- Up to an income of CHF 148,200, the employer and employee each pay 6.4%.
- For a salary in excess of CHF 148,200, each pay 5.8%.
The employer will deduct the percentage from the salary of the employee required to make contributions and transfer it, along with the employer's half, directly to the responsible compensation office or the unemployment insurance fund. Any additional administrative costs incurred must be covered by the employer. These regulations also apply to owners of an AG (joint-stock company) or GmbH (limited liability company) because they are considered their own employees in these cases.
Simplified statement for gainfully employed persons
The simplified payroll statement was introduced to combat illegal employment. It is used in particular for the simplified payroll accounting of employees who only work a few hours per month for a client – for example, cleaning staff in private homes – but are required to pay contributions. The following requirements must be met:
- The employees' salary must not exceed CHF 25,700 per year.
- The company's total salary cannot exceed CHF 58,800.
- The salaries of all employees must be calculated using the simplified approach.
- The company must not be a corporation (joint-stock company or a limited liability company).
- Spouses and children of the employer are excluded.
Social insurance: Contribution rates for the self-employed
Here is the breakdown of an annual salary of CHF 57,400:
|
Total |
AHV |
8.10 % |
IV |
1.40 % |
EO |
0.50 % |
ALV |
No insurance policy against unemployment possible |
Total* |
10.00 % |
*Self-employed persons must pay the full amount themselves.
As at: January 1, 2022
Salary deductions in Switzerland: Self-employed persons pay the social insurance contributions themselves
Self-employed persons pay the entire contributions themselves. The following guidelines apply:
- AHV contributions for an annual income below CHF 58,800 are calculated on a sliding contribution scale. The scale has 18 levels and starts with an annual income of CHF 9,800 with a contribution rate of 5.371%. It ends with a regular rate of 10% with an annual income of at least CHF 58,800.
- If annual income is lower than CHF 9,800, the minimum AHV amount of CHF 514 must be paid.
- For an annual income of CHF 2,300 or lower, the payment of AHV contributions is voluntary.
- The compensation offices also charge administrative cost contributions of a maximum of 5% of the contributions on gainful employment income.
Statements of payments from self-employed persons
Statements of payments made by self-employed persons to the social insurance fund are based on the following specifications:
- Settlement takes place according to net income of the tax assessment for the relevant contribution year.
- For the current year, provisional partial invoices (payments on account) are determined every quarter, based on an assumption of predicted income. The compensation office must be informed if the income changes significantly or if the contributions paid are found to be too low when the financial statements are produced. Otherwise, interest on arrears may be charged.
- Once the definitive tax assessment and therefore the definitive net income for a year is available, the final settlement of the AHV contributions takes place.
