The moment your first employee signs is a good moment. And a moment when your admin workload doubles. Because from now on, payroll in Switzerland is part of your job: every month you run payroll, keep AHV, ALV, UVG, KTG and BVG under control, transfer the net salary and report everything to the Ausgleichskasse (compensation fund). One mistake costs money - and sometimes back payments with interest.

The good news: Swiss payroll is not black magic once you understand which contributions apply and which deadlines matter. That is exactly what this guide does. And for the payroll run itself you do not need an expensive all-in-one package - a certified payroll tool or your Treuhänder (fiduciary) handles that, while you keep everything around it lean.

The key facts at a glance

• AHV/IV/EO: 5.3% employer share + 5.3% employee share = 10.6% of gross salary
• ALV: 1.1% per side (2.2% in total), BVG from an annual salary of CHF 22,680.00 (2026 figures)
• Non-wage labour costs sit at roughly 12-20% on top of gross salary, depending on the industry
• Lohnausweis (salary statement) to the tax office by 31 January, payslips kept for 10 years
• Late-paid AHV contributions cost default interest and reminder fees
• Magic Heidi deliberately does not do payroll - instead everything around it: invoices, expenses, VAT (MWST), customer data

What is payroll (Lohnbuchhaltung)?

Payroll means: handling all the financial processes around your employees' salaries cleanly. It starts with registering as an employer with the Ausgleichskasse (compensation fund) and only ends with the retention requirement for payslips. In between sit the monthly salary calculation, the social insurance deductions, the net salary transfer, paying the contributions to the right places and the annual reporting.

Sounds like a lot? At the beginning it is. But it repeats the same way every month. After two or three payroll runs the process becomes routine - provided you set up the basics correctly once.

The legal basis is in the AHVG (SR 831.10): anyone who employs staff must withhold the contributions to AHV, IV and EO with each payroll run and transfer them, together with the employer share, to the compensation fund. This applies from the first franc of salary - even for a 10-hour job. You can find the law on admin.ch.

One important point upfront, because it often causes confusion: payroll is not the same as bookkeeping. Your regular bookkeeping records your company's income and expenses. Payroll is a separate process with its own rules, its own deadlines and its own reporting duties. Some tools can do both, many only one - more on that later.

Swiss payroll: the contributions you need to know

In Switzerland, employers and employees share the social insurance contributions. The employer withholds the employee share directly from the gross salary and pays both shares to the relevant bodies. These five building blocks form the core of every payslip.

AHV/IV/EO - the biggest item

Old-age, survivors' and invalidity insurance together cost 10.6% of gross salary: 5.3% is paid by the employer, 5.3% is deducted from the employee's salary. What counts is the gross salary - including benefits in kind, bonuses, allowances and the (classically underestimated) holiday compensation. There is no lower threshold: every franc of salary is subject to contributions. The responsible body is the Ausgleichskasse (compensation fund) where you registered as an employer.

ALV - unemployment insurance

On the payslip, ALV comes right after AHV: 1.1% employer share, 1.1% employee share, so 2.2% in total. Contributions are collected up to the upper earnings threshold - above it, the ALV rate drops to a reduced rate. ALV also runs through the compensation fund, so you get one combined invoice.

UVG and NBU - accident insurance

Occupational accident insurance is mandatory: every employer must insure their employees against occupational accidents with Suva or a private insurer. Anyone working more than 8 hours per week must also be insured against non-occupational accidents (NBU). Premiums sit roughly between 0.1% and 3% of salary, depending on the industry's risk class - an office job is cheap, a roofer is expensive. The NBU premium is split 50/50 between employer and employee; the premium for occupational accidents is paid by the employer alone.

KTG - daily sickness benefit insurance

When an employee is ill, you must continue paying their salary (more on that under deadlines). So that this risk does not stay with you, many employers take out a collective daily sickness benefit insurance (Krankentaggeldversicherung, KTG). It is only legally mandatory if a generally binding collective labour agreement (GAV) of your industry requires it. What a KTG costs, when it is mandatory and how the daily benefit works - we explain in depth in our guide to daily sickness benefit insurance in Switzerland.

BVG - occupational pension

From an AHV-liable annual salary of CHF 22,680.00 (2026 figure), your employees must be enrolled in the second pillar. Enrollment with the pension fund happens automatically with the first payroll run - you only need to check whether the salary is above the entry threshold and register the employee with your pension fund (or a substitute institution). The contributions depend on age and are split 50/50 or in the ratio of the savings plans - the employer must contribute at least as much as the employee.

Withholding tax - the special case

For employees with a B or L permit, and for cross-border commuters, you withhold tax at the source - so on top of the social deductions you deduct the monthly withholding tax and transfer it to the cantonal tax authority. For that you must register as a withholding-tax employer with your canton's tax office. How the Lohnausweis (salary statement) process works is explained in detail by the ESTV on their website.

Your first employee: step by step through Swiss payroll - and what the salary really costs

Nina is a graphic designer in Bern and has just expanded her studio from solo to two people. Her first employee, a junior designer, earns CHF 4,350.00 gross per month. Before the first payday, Nina has to complete these seven steps:

1. Register with the Ausgleichskasse as an employer. This is done online with your responsible compensation fund - which one is responsible for you, you can find out on ahv.ch. The fund registers your employees and then sends quarterly invoices.
2. Take out UVG accident insurance. Occupational accidents immediately, non-occupational accidents from 8 weekly hours. Nina gets two quotes - Suva and a private insurer - and picks the cheaper offer for her office job.
3. Check BVG and prepare enrollment. At CHF 52,200.00 annual salary, the junior designer is clearly above the entry threshold - Nina registers her with the pension fund. With a clearly part-time workload below the threshold, this step does not apply.
4. Decide on a KTG. No GAV in the design industry - Nina takes out a collective KTG anyway, so that continued salary payments during illness do not come out of her own pocket. For CHF 45.00 a month she is rid of the risk.
5. Clarify withholding tax. Her employee has a Swiss passport, so no withholding tax. If she had a B permit, Nina would have to register with the Bern tax office.
6. Set up payroll. Nina does not run the payroll by hand but with a payroll tool - deductions, employer shares and reports are calculated automatically. More on the options below.
7. Transfer the net salary and pay in the contributions. Transfer by the end of the month, contributions on the compensation fund's invoice.

After half a year, Nina says: "The setup took one afternoon. After that, it runs in 15 minutes a month."

And what comes out of it? Nina's complete payslip:

"I can afford an employee at half time" - often that is only true once you factor in the non-wage labour costs. Here is the complete calculation for Nina's junior designer at CHF 4,350.00 gross per month.

Deductions from gross salary (paid by the employee):

The employer pays on top:

Concretely: Nina's employee does not cost the studio CHF 4,350.00, but CHF 4,903.95 per month - a good 12% more than the gross salary. BVG rates vary with the employee's age and the pension fund's rules, UVG rates with the risk class. As a rough rule of thumb for office jobs, budget 12-15% non-wage labour costs, and in higher-risk industries like construction or hospitality more like 18-20%.

For planning, that means: always budget your first employee at gross plus around 15%. Then the first AHV invoice will not surprise you.

If you are still paying AHV contributions as a self-employed person yourself, it is worth reading our guide to AHV contributions for the self-employed - because from your first employee onwards, you run both roles in parallel: as an employer and as a contributing entrepreneur.

Deadlines and duties: salary statement, record keeping and the AHV payment dates

The monotonous part of payroll is the monthly run. The critical part is the deadlines - because nobody reminds you when you miss them.

Monthly: Pay the net salary on time, ideally by bank transfer with the payment reference "Salary November 2026" or as a QR-invoice - that way both sides have a clean record.

Quarterly: After each quarter, the compensation fund invoices you for the AHV/IV/EO and ALV contributions. That invoice has a payment deadline - usually 30 days from the invoice date. Miss it and it gets expensive, see Marco's story below.

Annually, by 31 January: You must hand every employee a Lohnausweis (salary statement, formerly "salary certificate") for the previous year and report the total salary sum to the tax authority. For employees subject to withholding tax, the report runs alongside. You can find the official forms and details at the ESTV.

For 10 years: Payslips, salary statements and the related records must be kept for ten years. That applies to the records on your side as well as to the copies of your employees' payslips. Digital is fine - a cleanly named folder per year satisfies the law.

Continued salary payment during illness: Under OR Art. 324a you must continue paying the salary during illness - in the first year of service at least three weeks, then longer depending on the cantonal scale (the Bern, Zurich or Basel scale), rising with years of service up to several months. This is exactly why the KTG from the example above is worth it: it reimburses you for the continued salary payments instead of you carrying them yourself.

Marco's story

Marco is a master carpenter in St. Gallen with two employees. In autumn 2025 he misses the payment deadline for the third-quarter AHV invoice - CHF 3,560.00, employer and employee shares of both salaries combined. He simply overlooked the invoice; it had got buried between material orders and client jobs. Only the second reminder from the compensation fund pulls him out of his summer hole. In the end he pays the contributions plus default interest and reminder fees - together around CHF 90.00 more than necessary. No drama, but annoying, because completely avoidable.

Since then, Marco keeps two reminders in his calendar: one at the end of the quarter ("AHV invoice coming soon"), one on the 15th of the following month ("AHV invoice paid?"). The cost: zero francs.

Doing payroll yourself or outsourcing it?

You have three realistic options. None of them is "the right one" in general - it depends on how many people you run payroll for and how much time you want to invest.

Option 1: Payroll software (Swissdec-certified)

Payroll software like the payroll modules of bexio, KLARA or the solutions from Proffix and Abacus calculates salaries, deductions and employer shares automatically, generates payslips and transmits the reports electronically to the compensation funds (the standard for this is called Swissdec). What feeds into these programs differs: some are part of a larger business suite where you buy bookkeeping and payroll together.

Option 2: Treuhänder (fiduciary)

The classic route: your fiduciary runs the complete payroll for a fee. Realistically that is CHF 25.00 to CHF 50.00 per employee and month - we have broken down the details in our guide to the cost of a fiduciary. For one person with simple circumstances, that is money well spent: you get payslips on time, correct deductions and a contact person when a question comes up.

Stefan's story

Stefan runs a small ad agency in Basel with three employees. After a year of Excel payroll and two sleepless nights before every quarter change, he hands payroll over to his fiduciary - for CHF 35.00 per person and month, CHF 105.00 in total. His verdict: "That is CHF 1,260.00 a year. For that I have zero deadline stress and nobody calling me about a wrong AHV report."

Option 3: Payroll outsourced, the rest yourself

The anti-overkill option: you only hand over payroll - to a payroll tool or a fiduciary - and do everything else yourself, with lean software. That is often cheaper than a complete suite with a payroll module if you can handle the remaining processes without complications anyway.

Where Magic Heidi stands - honestly

Magic Heidi does not do payroll. By design. Payslips for employees belong in a specialised, Swissdec-certified tool or with your Treuhänder (fiduciary) - that is the right job for the right specialists, and we do not play along with half-baked features.

What Magic Heidi covers instead is everything around payroll: writing invoices, scanning expenses and assigning them to VAT (MWST), preparing the VAT settlement and maintaining your customer data. That starts at CHF 24.99 a month including VAT - instead of paying CHF 50.00 and more for an all-in-one package when all you really need is clean invoices and expenses. You can find all plans on the pricing page. And if you are eyeing a complete solution, the comparison between Magic Heidi and bexio shows where the price differences really come from.

The five most common payroll mistakes

No matter who runs the numbers - most costs do not come from bad intent but from small slips. These five keep showing up:

• AHV invoice paid late. Default interest and reminder fees are avoidable - set a calendar reminder, ideally two.
• Holiday compensation forgotten. Holiday pay is subject to contributions. With a monthly salary it is usually included in the salary (13 monthly salaries) - with hourly wages or bonus payments you must book the 8.33% holiday compensation separately. What to watch out for is explained in our guide to holiday compensation in Switzerland.
• BVG enrollment missed. As soon as the annual salary is above the entry threshold, the obligation kicks in - retroactively too. Register new employees with the pension fund right away, not only after the probation period ends.
• Withholding tax ignored. For employees with a B or L permit you must withhold the tax at the source and remit it. This duty starts with the first salary, not from the second month.
• NBU threshold overlooked. From 8 weekly hours, non-occupational accident insurance must be in place. At a 50% role with 20 hours that is clearly the case - with a mini-job of 6 hours it is not.

FAQ: common questions about Swiss payroll