New social security rates announced

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Social security contribution rates are generally adjusted every other year in line with the economic situation and salary trends. The latest amendments came into force on 1 January 2013.

Social insurance contributions 2013

Social insurance sector	Contributions as percentage of earned income				Contributions by insured not in gainful employment
	Contributions in favour of the employee			Contributions by the self-employed	in CHF per year
	Employee	Employer	Total		Minimum	Maximum
OASI	4.20%	4.20%	8.40%	4.200% - 7.800%1	392	19,350
IV	0.70%	0.70%	1.40%	0.754% - 1.400%1	65	3,250
EO	0.25%	0.25%	0.50%	0.269% - 0.500%1	23	1,150
ALV2	1.10%	1.10%	2.20%	-	-	-
BUV2	-	0.84%	0.84%	3	-	-
NBUV2, 4	1.49%	-	1.49%	3	-	-
BV5	7.8%	10.30%	18.10%	3	-	-
FZ6	-7	between 0.1% and 4.0%6	between 0.1% and 4.0%6	6	-	-

1. The contribution rate depends on the level of earned income. The first rate applies to an income level up to and including CHF 9,400, the second for an income of at least CHF 56,200 (a "degressive contribution scale" is applied to intermediate income levels).
2. Max. insured income: CHF 126,000 per annum. UI: A UI contribution of 1.0% is applied to salary incomes between CHF 126,000 and CHF 315,000. OA; NOA: average gross premium rate (2010). Premiums calculated acco rding to the risk. Separate rules apply to part-time workers.
3. The self-employed may also contribute to this voluntary insurance scheme.
4. Individuals who are employed for less than 8 hours per week are not insured against non-occupational accidents. For the unemployed, the contribution rate is 2.63%.
5. Estimated (pension fund statistics, 2010) in % of the insured salary (max. CHF 835,200). Contributions are set by the insurance funds.
6. Regulations vary across cantons.
7. Valais is the only canton where it is compulsory for employees to pay 0.3% (since 1st January 2002).

Source: Federal Social Insurance Office

Mandatory Social Security Contributions

Employers are subject to the following mandatory social security contributions: 1. Old-age and surviving dependents, disability and loss of income fund and maternity insurance (OASI, DI and EO) 10.3% of employment income (salary and other payments and benefits). 2. Unemployment insurance (UI) The employer must pay into the mandatory unemployment insurance (ALV) for each employee, 2.2% of employment income up to a maximum of CHF 126'000 per annum and 1% of employment income between CHF 126'000 and CHF 315'000 3. Mandatory accident insurance (OA and NOA) The employer is solely liable for the insurance premiums covering occupational accidents and diseases and cannot make any deductions from the employees' salaries to cover these. The premiums covering non-occupational accidents are paid by the employee. The maximum amount of income that can be insured is CHF 126'000 per annum. 4. Family allowances (FA) The employer is required to pay between 0.1 and 4% of employment income in respect of family allowance (FZ). Again, the employer cannot make any deductions from employees' salaries. 5. Occupational benefit plan (PP) Both the employer and the employee contribute to the occupational benefit plan (pension scheme). The employer's contribution must at least equal the contribution paid by the employee. All employees with an annual salary in excess of CHF 21'060 must be insured under the occupational benefit plan. The amount of annual salary between CHF 24'570 and CHF 84'240 must be insured. This part of the salary is referred to as the "coordinated salary". The minimum coordinated salary is CHF 3'510. The employer must be affiliated to an approved pensions provider. Each provider sets its own contribution rates.

Registration

The employer is required to register newly hired employees with the cantonal Compensation Office within one month of their start date. Where it is unclear whether a contractual relationship is based on self-employment or employment, the employer should contact the local Compensation Office for clarification.

Sources

Federal Social Insurance Office AHV For further information or to discuss any of the issues raised, please contact Stefanie Monge or Eva Scheifele on +41 44 220 12 12 at Poledna Boss Kurer, Zurich. Disclaimer Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here. Circular 230 disclosure To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Copying If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.