How to pay salaries? Swiss SMEs and startups: THE complete guide 📚🇨🇭

Introduction 📝

Starting your journey as an SME or startup in Switzerland and setting up your payroll can be a daunting task. However, once equipped with the right information, the process can become much less daunting. We're here to guide you every step of the way. From distinguishing between different salary types for each employee to translating insurance policies into payroll software rates, we've got you covered.

If you'd like to understand the different salary types, stay tuned for our next article "Am I selecting the right salary type for payroll?".

Your 7-step guide to setting up your payroll 🗂️🔐

Here's a complete step-by-step guide to setting up your own payroll and managing it on a monthly basis:

1. Company information: your company's UID, legal form, address and more.
2. Accident insurance policies: Covers your employees for occupational and non-occupational accidents.
3. Daily health insurance policies: Insurance coverage for employee sickness absence.
4. Additional insurance policy (optional): Additional coverage beyond standard insurance policies.
5. Retirement policy: Ensuring long-term financial stability for your employees.
6. Employee information: Collection of personal data required for payroll processing.
7. Company policies: Establishing standard working conditions and benefits for your employees.

Laying the foundations with company information 🏢

The first step in setting up your payroll is to gather basic information about your company. This includes UID, legal form, address and other information that every Swiss SME or startup has at its fingertips. These details will form the basis of your payroll system and are essential for a smooth payroll setup.

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Protect your team with accident insurance 🩹

In Switzerland, every company is required to take out two forms of accident insurance: occupational accident insurance and non-occupational accident insurance. These insurances protect your employees in the event of injury, whether at work or elsewhere. Understanding how to correctly incorporate these insurance rates into your payroll software is essential for compliance and peace of mind for your employees.

In the example above, the SME may think that the rate for occupational accidents is 0.81% and the rate for non-occupational accidents is 11.68%, but in reality, the rates are given in per thousand, meaning that they must be divided by 10 to be converted into a percentage. Consequently, the rate for occupational accidents is 0.081% and the rate for non-occupational accidents is 1.168%. This is important because it's the rate you'll need to enter into your payroll software.

Stay prepared with daily health insurance 🌡️

Next, the daily health insurance comes into play. This insurance covers 80% of an employee's salary in the event of illness. The rules can be complex, and it's essential to understand how to calculate these rates correctly for your payroll software. What's more, it's also important to separate the rates according to gender for this particular insurance.

Go further with additional insurance 📝

Supplementary insurance can provide additional coverage if you wish to exceed the maximums for daily health and accident insurance. For example, if an SME wants its insurance company to pay more than the usual maximum, it can opt for supplementary insurance.

Ensuring a secure future with a retirement policy 🏦

Setting up a retirement policy is essential for every Swiss SME. Choosing a pension provider and a pension fund is a crucial step. These contracts are generally provided in the form of a fixed monthly amount deducted from the employee's salary. The rules may change each year depending on the employee's age bracket or changes in salary, making this another essential aspect of setting up your payroll.

Better understand your employees 👥

To manage your employees' payroll, you'll need to collect certain personal information. This may include details such as their AVS number, home address, marital status, child information, IBAN number, immigration status, and more. These details are not only important for compliance, but are also crucial for calculating local and cantonal tax rates.

Establish ground rules with company policies ⏱️

A set of company policies makes it easy to manage your payroll. These policies typically define your employees' working hours, paid leave, unpaid leave, overtime rules, bonus rules, and more. These policies not only simplify your payroll management, but also ensure that all employees are treated fairly.

The Earny advantage: Simplify payroll management 🤝

Setting up and managing payroll can seem like a daunting task. However, with the right guidance and a thorough understanding of the process, it can be simplified. At Earny, we're committed to providing the tools and advice needed to make the payroll process smooth and straightforward. Join us in the payroll revolution and ensure that your journey as a Swiss SME or startup runs smoothly.