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 you have the right information, the process can become much less intimidating. We are here to guide you every step of the way. From distinguishing between different types of salaries for each employee to translating insurance policies into payroll software rates, we have everything covered.

If you want to understand the different types of salary, stay tuned for our next article, "Am I selecting the right type of salary for payroll?"

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

Here is a comprehensive step-by-step guide to help you set up your own payroll and manage it monthly:

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

Laying the groundwork with company information 🏢

The first step in setting up your payroll is to gather your company's basic information. This includes the 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 must take out two types of accident insurance: occupational accident insurance and non-occupational accident insurance. These insurances protect your employees in the event of injury, whether it occurs 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 mille, which means they must be divided by 10 to be converted into percentages. Therefore, the rate for work-related accidents is 0.081% and the rate for non-work-related accidents is 1.168%. This is important because it is the rate you will need to enter into your payroll software.

Stay prepared with daily health insurance 🌡️

Next, 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 is essential to understand how to calculate these rates correctly for your payroll software. In addition, it is also important to separate the rates by gender for this particular insurance.

Go further with additional insurance 📝

Supplementary insurance can provide additional coverage if you want to exceed the daily health insurance and accident insurance maximums. 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 🏦

Implementing a retirement policy is essential for every Swiss SME. Choosing a retirement provider and pension fund is a crucial step. These contracts are usually 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 salary changes, making this another essential aspect of your payroll setup.

Gain a deeper understanding of your employees 👥

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

Establish ground rules with company policies ⏱️

A set of company policies makes it easier 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 payroll management, but also ensure fair treatment for all employees.

The Earny advantage Earny Simplifying 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 are committed to providing the tools and guidance necessary to make the payroll management process smooth and simple. Join us in the payroll management revolution and ensure that your journey as a Swiss SME or startup runs smoothly.