Hiring your first employee in Switzerland without opening a local entity is possible, but Swiss employment law leaves little room for improvisation. Written contracts, statutory notice periods, and mandatory social contributions apply from day one, regardless of where your company is headquartered. An employer of record (EOR) acts as the legal employer on your behalf, handling the Swiss payroll, pension, and compliance stack while you keep day-to-day management of the employee.
This guide walks you through what an EOR actually does in Switzerland, what a compliant employment contract must contain, how notice periods work under the Swiss Code of Obligations, what social contributions really cost, and how to run a hire step by step. The goal: give you a clear decision basis before you sign anything.
Direct answer: An employer of record lets a foreign company hire in Switzerland without a local entity by becoming the legal employer of the Swiss worker, issuing a Code of Obligations–compliant contract, running payroll with AHV/IV/EO and BVG contributions, and managing notice periods and terminations.
Hiring in Switzerland via an EOR: key points
- The EOR is the legal employer; you keep operational direction of the employee.
- Swiss contracts must respect the Code of Obligations, including the written information duty under art. 330b CO.
- Statutory notice is 1 month in the first year, 2 months from year 2 to 9, 3 months from year 10 (art. 335c CO).
- Employer AHV/IV/EO contributions amount to 5.30% of gross salary; BVG, UVG, family allowances and ALV come on top.
- Hiring foreign nationals may require a work permit, which the EOR should coordinate.
What is an employer of record in Switzerland?
An employer of record is a Swiss-based company that becomes the legal employer of a worker on behalf of your foreign business. You select the candidate, define the role, the salary, and the day-to-day priorities. The EOR signs the Swiss employment contract, runs payroll, declares social contributions, and takes on the legal obligations of the employer under Swiss law.
For a foreign company that does not want to incorporate a subsidiary or branch, this model allows a compliant hire in Switzerland within a few days instead of several months. Using an employer of record in Switzerland transfers the administrative and legal employer burden to a local specialist while you keep the commercial relationship with your employee.
It is important not to confuse an EOR with two neighbouring models. A temporary work agency (agence de placement) places staff for short, flexible assignments, usually under the Swiss federal law on employment services and the hiring of services (LSE). Pure subcontracting of workforce, where another company sells you people without taking on the employer role for your project, carries a different legal risk profile. The EOR sits in between: a long-term, dedicated legal employer for a worker who operationally reports to you.
Cas pratique
A German SaaS company wants to hire a senior account executive based in Zurich to cover the Swiss market. Creating a local GmbH would take several months and require ongoing accounting and tax filings. By contracting an EOR, the company issues a compliant Swiss employment contract within days, with payroll, AHV/IV/EO and BVG contributions handled locally, while the sales director in Munich keeps full operational management of the new hire.
Swiss employment contracts: mandatory terms and legal requirements
Swiss law recognises several forms of employment contract: open-ended (contrat de durée indéterminée), fixed-term, apprenticeship, and a probation period that frames the start of most relationships. The individual employment contract is governed by the Swiss Code of Obligations (CO), and even when a contract is concluded orally, the employer must still comply with the written information duty for any relationship exceeding one month.
According to the Secrétariat d’État à l’économie, art. 330b CO on the employer’s duty to inform requires the employer to give the worker written information about the key terms of an open-ended or multi-month contract. The elements to communicate include the names of the parties, the start date of the employment relationship, the function, the salary and allowances, and the weekly working time. Any later change to these elements must be notified in writing within one month of taking effect.
Some clauses are only valid if they are set out in writing. This is the case for a fixed-term contract longer than certain durations, for a non-competition clause, and generally for any clause that departs from the default rules of the Code of Obligations to the employee’s detriment. The probation period deserves particular attention: by default it lasts one month and can be extended by written agreement up to a maximum of three months, with a shorter notice period during that time.
Typical mandatory elements of a compliant Swiss contract:
- Identification of employer and employee.
- Start date and, where relevant, end date of the relationship.
- Job title and main duties.
- Gross salary, 13th month if applicable, and allowances.
- Weekly working time and holiday entitlement.
- Probation period and applicable notice periods.
- Written non-competition and confidentiality clauses, where used.
Watch out for the written form: a non-competition clause agreed only verbally has no legal effect. Even a well-drafted clause can be void if the written form or the limits set by the Code of Obligations on scope, duration and geography are not respected.
How do notice periods work in Switzerland?
Notice periods in Switzerland are set by the Code of Obligations and are not left to the parties’ free will. After the probation period, the statutory notice period for an open-ended contract is one month during the first year of service, two months from the second to the ninth year, and three months from the tenth year onwards. Termination normally takes effect at the end of a calendar month.
These durations come directly from art. 335c CO on statutory notice periods, as updated in the Code of Obligations. The parties can agree in writing on different notice periods, but they must be the same for employer and employee and cannot generally be shorter than one month after the first year. During the probation period, notice is typically seven days.
Swiss law also provides for protection periods during which the employer cannot validly terminate the contract. These cover, in particular, non-fault illness or accident, pregnancy and the weeks following childbirth, and compulsory military or civil service. If a termination is notified during such a period, it is void; if the employee becomes incapacitated during the notice period, the notice is suspended and resumes once the protection period ends.
Swiss employers are not required to give a formal reason for a termination, but a termination that is abusive within the meaning of the Code of Obligations can lead to compensation of up to six months of salary. The written form is strongly recommended for every termination letter, especially for an EOR managing documentation on behalf of a foreign client.
Cas pratique
An employee in his third year of service receives a termination letter on 15 March with a two-month notice period ending 31 May. On 10 April, he is signed off work for a serious illness that lasts three weeks. The notice period is suspended during the incapacity and resumes when he recovers; the termination date is pushed back accordingly, and the contract ends at the end of the following full month.
Social contributions and pension: the real cost of employing in Switzerland
Beyond the gross salary, several mandatory contributions shape the real cost of a Swiss hire. The first pillar covers old-age and survivors’ insurance (AVS/AHV), disability insurance (AI/IV) and loss-of-earnings allowances (APG/EO). According to the CIAM AVS contribution rates for 2026, the total AVS/AI/APG rate is 10.60 % of gross salary, split equally between employer and employee, i.e. 5.30% each.
On top of this first pillar, Swiss employers must contribute to the occupational pension scheme (BVG/LPP), known as the second pillar. BVG contribution rates vary with the employee’s age and the coordinated salary, and the employer must pay at least 50% of the total BVG premium. Rates typically rise with age brackets, which means that hiring a senior profile usually costs more in pension contributions than hiring a junior one on the same gross salary.
Several additional charges complete the picture. Accident insurance (UVG/LAA) covers occupational accidents and, above a working-hours threshold, non-occupational accidents. Family allowances are financed by employer contributions whose rate varies by canton. Unemployment insurance (ALV) applies up to a capped salary and is split between employer and employee. Collective labour agreements and some cantons may add further contributions, for example to early-retirement schemes in construction.
5.30%of gross salary
Employer share of the paritary AVS/AI/APG contributions in Switzerland, applicable from 1 January 2026 (CIAM AVS).
A simple way to anticipate the real cost is to add estimated employer charges to the gross salary when budgeting a Swiss hire. The exact total depends on BVG age bracket, canton, insurance choices and the EOR’s own service fee, but the gross salary should never be read as the final employer cost.
| Contribution | Employer share | Comment |
|---|---|---|
| AVS/AI/APG | 5.30% of gross salary | Rate applicable from 1 January 2026 (CIAM AVS) |
| BVG (2nd pillar) | At least 50% of total premium | Rate varies by age bracket and coordinated salary |
| UVG/LAA, ALV, family allowances | Variable | Depends on canton, salary cap and risk class |
Steps to hire Swiss employees without a local entity
Hiring in Switzerland through an EOR follows a structured path. Each step reduces compliance risk and gives you better visibility on the real employer cost before you commit.
- Define the role and the gross salaryBenchmark the position against the Swiss market, taking into account the canton, the sector and any applicable collective labour agreement.
- Select an EOR with proven Swiss expertiseCheck that the provider masters the Code of Obligations, cantonal specificities, AVS/AI/APG and BVG filings, and work permit procedures.
- Validate the Swiss employment contractReview mandatory clauses, probation period, notice periods, non-competition clause and written information required by art. 330b CO.
- Check work authorisation if applicableEU/EFTA nationals benefit from the free movement regime, while third-country nationals usually require a specific work and residence permit.
- Launch onboarding and payrollRegister the employee with social security bodies, set up BVG affiliation and the first payroll run with the correct contribution deductions.
EOR vs local subsidiary: quick comparison
- Hiring possible in a few days without creating a legal entity.
- Payroll, AVS/AI/APG, BVG and insurances handled by a Swiss specialist.
- Flexible exit if the Swiss project does not scale as expected.
- Predictable monthly service fee on top of employer charges.
- EOR service fee adds to the gross salary and social contributions.
- Less suited when hiring a large Swiss team over the long term.
- Commercial activity through the employee may still raise tax or permanent-establishment questions.
- Quality varies between providers; Swiss-law expertise must be verified.
Work authorisations deserve particular attention. Nationals of EU/EFTA states benefit from the free movement of persons and can usually be registered quickly. Third-country nationals must obtain a work and residence permit, with cantonal quotas and labour-market tests. A seasoned EOR will coordinate the application with the cantonal migration authority and ensure that the contract start date is aligned with the permit.
If you are weighing options for a first Swiss hire, a short discussion with a Swiss payroll and EOR specialist will help you stress-test your budget and your contract draft.
Can I hire someone in Switzerland without opening a subsidiary?
Yes. An employer of record becomes the legal employer of your Swiss worker, issues a compliant contract, runs payroll and manages social contributions. You keep operational direction without creating a local entity.
Is an employer of record compliant with Swiss employment law?
An EOR is compliant when it applies the Code of Obligations, the written information duty under art. 330b CO, statutory notice periods under art. 335c CO, and the mandatory social contributions (AVS/AI/APG, BVG, UVG, ALV, family allowances). Verify the provider’s Swiss expertise and operating licences before signing.
How much do social contributions add to a Swiss gross salary?
The employer share of AVS/AI/APG alone is 5.30% of gross salary from 1 January 2026. BVG, UVG, family allowances and ALV come on top, with rates depending on age, canton and salary. A realistic employer-cost estimate is always higher than the gross salary.
How do I terminate a Swiss employee legally?
Send a written termination letter respecting the statutory notice period (1 month in year 1, 2 months in years 2 to 9, 3 months from year 10, art. 335c CO) and the end-of-month rule. Make sure no protection period applies (illness, accident, pregnancy, military service) and avoid grounds that could qualify as abusive termination.
The content above gives a general overview of Swiss employment rules relevant when hiring through an EOR; it does not replace advice from a Swiss lawyer or tax expert on your specific contract, canton, or sector. With a well-drafted Code of Obligations–compliant contract, correctly declared AVS/AI/APG and BVG contributions, and a clear view of notice periods, a foreign company can enter the Swiss market quickly without carrying the full compliance burden alone.