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When is the 13th salary paid?

Understanding the 13th Salary and What It Means for Swiss Freelancers

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When Does the 13th Salary Arrive in Switzerland?

In Switzerland, the 13th salary is more than just a bonus—it’s a financial lifeline that typically arrives toward the end of the year, right in time for the holiday season. Whether you’re looking to cover festive expenses or save for a rainy day, this extra payment can be a real boost. But what about freelancers? How can they benefit from something similar?

Let’s dive into when the 13th salary usually arrives, who’s eligible for it, and how freelancers can structure their finances to mirror this extra income.

What Is the 13th Salary?

The 13th salary, or 13. Monatslohn in Switzerland, is an additional payment typically given to employees in December, representing 1/12 of their annual earnings. While some view it as a "bonus," it’s technically part of the overall compensation package.

Here’s how it’s typically structured:

Salary Type Distribution Timing
13th Salary (1/12) Usually one lump sum or in two parts December (or split into June & December)

Key points to remember:

  • Not a bonus: It’s part of the annual salary, divided over 12 months.
  • Widely anticipated: Most salaried employees count on it for year-end expenses.
  • Freelancers beware: This benefit is typically unavailable for those who are self-employed.

Using tools like Magic Heidi can help freelancers organize their finances in a way that mimics the benefits of a 13th salary.

Legal Aspects: Is the 13th Salary Mandatory?

Surprisingly, the 13th salary isn’t required by law. However, many industries governed by Collective Labor Agreements (CLA) include the 13th salary as a mandatory payment. For employees, if the 13th salary is mentioned in their contract or company policies, it becomes enforceable.
For freelancers:

You’re typically not entitled to a 13th salary.

Negotiating higher rates to offset the lack of this extra payment can help.

Structuring your contracts carefully is key to securing financial stability.

Who Is Entitled to the 13th Salary?

To determine who’s entitled to this payment, let’s break it down:

Eligible:

  • Employees with an employment contract that specifies a 13th salary.
  • Employees covered by a CLA, which mandates the extra salary.
  • Long-term employees in companies where the 13th salary has become customary, even if not formally in contracts.

Not Eligible:

  • Freelancers and contractors (unless negotiated in individual agreements).
  • Part-time or temporary employees, unless specified in their contracts.

Freelancers need to carefully plan and budget throughout the year, keeping in mind they won’t receive an automatic financial boost at year-end.

How to Calculate Your 13th Salary

Calculating your 13th salary is pretty straightforward:

  1. Annual salary ÷ 12 = 13th salary
  2. If you’ve worked only part of the year, it’s prorated:
    • (Months worked / 12) x annual salary = prorated 13th salary

Example:

Gross Annual Salary Monthly Salary 13th Salary (1/12)
CHF 96,000 CHF 8,000 CHF 8,000
CHF 60,000 (9 months) CHF 5,000 CHF 5,000 (prorated)

For freelancers, mimicking this system could involve setting aside a portion of your monthly income as a “self-funded” 13th salary.

Tax Implications of the 13th Salary

The 13th salary is taxed like regular income, subject to deductions for:

✔️ Income tax

✔️ AHV (social security) contributions

✔️ Pension and other contributions

For freelancers, managing tax obligations can be more complex. Using accounting software like Magic Heidi will help you stay on top of your taxes, ensuring you’re well-prepared for year-end deductions.

When and How Is the 13th Salary Paid?

Most companies pay the 13th salary in December, while some split it between June and December. As an employee, you can expect this payout in one of these forms.

Common Payment Methods:

  • Lump sum: Paid in full in December.
  • Split payments: Half in June, half in December.

If you’re a freelancer, you can simulate this by setting aside money throughout the year for an end-of-year bonus.

Leaving a Job: What Happens to Your 13th Salary?

If you leave your job mid-year, you’re entitled to a prorated 13th salary based on the number of months you worked. For example, if you leave in September, you’ll get 9/12 of your 13th salary.

Can Employers Withhold or Reduce the 13th Salary?

Employers can only withhold or reduce the 13th salary under specific circumstances, like:

  • Unpaid leave: Your 13th salary might be reduced if you’ve taken significant unpaid leave.
  • Contract terms: If your employment contract clearly outlines conditions for the reduction or withholding of this payment, your employer can act accordingly.

For freelancers, ensure that payment terms are explicitly stated in your contracts to avoid misunderstandings.

Maximizing Your Income as a Freelancer

To make up for the absence of a 13th salary, consider these strategies:

  • Diversify your client base to ensure a steady flow of work.
  • Negotiate retainer agreements to lock in consistent income.
  • Maximize your tax deductions by keeping organized records and claiming all eligible business expenses.

Using a tool like Magic Heidi ensures your financial management is top-notch and helps you stay on top of your business all year round.

FAQ

Conclusion

Securing Your Financial Stability

The 13th salary is a crucial financial tool for many employees in Switzerland, but for freelancers, the responsibility for creating a similar buffer falls squarely on their shoulders. Freelancers should consider raising their rates, negotiating better contract terms, and using financial planning tools like Magic Heidi to ensure their income is steady and well-managed year-round.

By taking proactive steps, you can enjoy the same financial peace of mind as those waiting for their 13th salary to arrive.