Companies advancing their international operations into Switzerland open a wealth of opportunities for expansion throughout Europe and further afield.
Challenges come alongside the potential benefits, however. Payroll management is among those challenges, whether your company is considering moving employees abroad or hiring new staff in-country. Employment laws, payroll and income tax regulations are areas where you cannot afford mistakes.
Foreign companies wanting to hire staff and operate their payroll in Switzerland must establish a legal entity. The typical choices lie between a private limited liability company (Société à Responsabilité Limitée, SARL), or a branch. Companies are regulated by the Swiss Company Act, which operates under the Swiss Code of Obligations.
Taking this step before running payroll in Switzerland requires an in-depth knowledge of company, employment, and taxation laws – and keeping up to date with the changes.
However, there is an alternative and simpler route. Bradford Jacobs’ will navigate around these potential pitfalls effectively and efficiently. We recruit the staff in-country and then put into action our comprehensive knowledge of tax and payroll regulations. As part of our service, Bradford Jacobs files returns, and remits associated payments for tax and social security contributions directly from our payroll system to the relevant authorities.
Outsourcing your payroll in Switzerland will streamline your operations by dealing with the following:
- Obtaining Power of Attorney to act as payroll provider.
- Registering employees with the relevant canton.
- Filing forms for remitting tax with the Federal Tax Administration.
- Registering with the Federal Social Insurance Office (FSIO) and the federal social insurance system (AHV) and the pension fund (BVG).
- The AHV 13-digit number, which is widely used as a Personal Identification Number (PIN) by all federal registers (which was originally the OASI, Old Age and Survivors’ Insurance number).
- Dealing with differing tax rates as they apply federally (at a uniform 11.5%), by 26 cantons (where rates vary greatly up to 40% for the highest incomes), 2,250 municipalities and in some cases the church.
- Assessing liability where all four classifications of taxation apply.
- Withholding taxes due to the state, canton and municipalities at various rates and percentages each month.
- Transferring withheld taxes to the authorities monthly or quarterly as required depending on different regulations between cantons.
- Filing annual tax returns, generally by March 31 for most cantons, with the tax year running from January 1 until December 31.