Social security in Switzerland — made simple

Social security (Sozialversicherung) becomes relevant for a Swiss company the day it pays its first salary — including the founder's own. The system is built on three pillars: the state pension (1st pillar), the occupational pension (2nd pillar) and voluntary private savings (3rd pillar), flanked by unemployment, accident and family-allowance schemes. The employer withholds the employee's share from gross salary, adds its own share and settles with the insurers. Here are the figures and the owner-manager specifics that standard overviews leave out.

Contribution rates 2026 at a glance

All figures as of 1 January 2026. Health insurance (KVG) sits outside the payroll entirely: every resident insures themselves individually and pays their own premiums.

First pillar: AHV, IV and EO

The AHV (old-age and survivors' insurance) is the backbone of the system, financed pay-as-you-go: today's salaries fund today's pensions, and contributions are levied on the entire salary with no upper limit. Together with disability insurance (IV) and the income compensation scheme (EO, covering military service and maternity/paternity leave), the total is 10.6% of gross salary, split equally. The employer additionally pays small administration charges of its compensation office (typically a low single-digit percentage of the AHV contribution, not of salary). Registration with a cantonal or industry compensation office (Ausgleichskasse) is due with the first salary payment, and contributions are settled monthly or quarterly with an annual final statement.

Second pillar: BVG occupational pension

The BVG turns salary into individual retirement capital and is mandatory for every employee earning CHF 22,680 or more per year with one employer (as of 2026). Contributions are calculated on the coordinated salary — gross salary minus the coordination deduction of CHF 26,460 — and rise with age: retirement credits of 7% (age 25–34), 10% (35–44), 15% (45–54) and 18% (55–65). The employer chooses a pension fund, must fund at least half of the contributions, and many fund more as a hiring argument. The second pillar also carries risk coverage for disability and death, which is why affiliation matters even for young teams. Companies that miss the affiliation get retro-billed by the National Substitute Pension Plan — with interest and fees.

Accident and unemployment insurance

UVG accident insurance is the employer's duty from the first employee: occupational accident coverage (BU) is always employer-paid, and employees working eight hours or more per week are additionally covered for non-occupational accidents (NBU), with the NBU premium customarily deducted from the employee's salary. Premiums are risk-based — an office pays a fraction of what a roofing business pays. ALV unemployment insurance runs through the same payroll at 2.2% up to the CHF 148,200 ceiling. A company with staff therefore maintains three standing relationships: compensation office, pension fund, accident insurer — plus the family allowance fund. Payroll administration bundles all of this into one monthly routine; our administration and payroll service exists for exactly this block of duties.

Owner-managers: the cases the brochures skip

How founders themselves are insured depends on the legal form, and the differences are larger than most expect.

• GmbH or AG owner on payroll = employee. The company deducts and pays all contributions on the founder's salary like for any employee, including ALV and BVG. The status is unambiguous — the AHV does not treat shareholding directors of capital companies as self-employed.
• But: no real unemployment protection. Persons in an employer-like position (arbeitgeberähnliche Personen) — shareholder-directors and their working spouses — pay ALV yet cannot draw benefits while they retain their position and influence. Contributions without cover: plan private reserves accordingly.
• Salary versus dividend. Dividends carry no AHV contributions, salaries do — which tempts owners to pay themselves mostly dividends. Compensation offices review the ratio and can reclassify excessive dividends as salary where the declared wage is not market-conform for the work performed. A defensible market salary plus moderate dividends is the durable setup.
• Sole proprietors are self-employed. They pay AHV/IV/EO up to 10% on a sliding scale (minimum CHF 530 per year, as of 2026), have no access to ALV, join a pension fund only voluntarily and must insure accidents privately. The legal-form choice is therefore also a social-insurance choice.

Cross-border constellations add a second layer — which country's system applies is decided by the EU coordination rules, summarised in our guide for cross-border commuter founders.

Employer registration: the checklist

Registering a company — the formation itself — is step one; registering as an employer is the separate step two that triggers the system above. Concretely, with the first hire (or the founder's first salary): report to the compensation office for AHV/ALV/FAK, conclude a UVG policy with an accident insurer, and affiliate with a BVG pension fund if any salary reaches the threshold. Withhold the employee shares each month, keep wage records, and file the annual salary declaration in January. Done in the right order, the whole setup is a week's paperwork; done late, it becomes retroactive contributions, default interest and — in the BVG case — compulsory affiliation. Timing beats optimisation here, and both are easier before the first payroll run than after.