Spotlight on Switzerland – A guide to implementing employee benefits technology

Switzerland’s employee benefits landscape offers fewer options compared to other countries in the region, but it also presents a unique set of challenges.  

One key consideration is that eligibility criteria vary between cantons (administrative regions that make up the country – similar to states in the US), due to differing local regulations and benefit structures.  Another layer of complexity arises with cross-border employees – those living in neighbouring countries and commuting to Switzerland for work.  

Employers with a dynamic workforce who are looking to successfully attract and retain top talent in this region, need to tailor their benefit approaches to address these differing eligibility criteria and ensure that their programmes meet employee expectations. 

An overview of the employee benefits landscape in Switzerland

Mandatory benefits 

Switzerland’s labour laws ensure employee security and long-term welfare through several mandatory benefits. 

Retirement benefits and the three-pillar system 

Switzerland’s retirement benefits are governed by a three-pillar system:   

• Pillar 1: Old Age and Survivors Insurance (AHV/AVS) provides benefits funded through employer and employee contributions, each contributing 4.35% of total employee pensionable salary.   

• Pillar 2: Occupational Pension Plans (BVG/LPP) require employer contributions that vary by age, typically between 7% and 18% of the insured salary. Employees contribute between 5% and 7%.   

• Pillar 3: Voluntary Private Savings Plans are incentivised through tax benefits and allow employees to contribute at their discretion. 

Additional mandatory contributions 

• Invalidity insurance (IV): Employers contribute 0.7% of salary. 

• Accident insurance (UVG): Employers cover 100% of premiums for occupational accidents and diseases, while employees pay for non-occupational accident premiums.  

• Unemployment insurance: Both employers and employees contribute 1.1%, up to an annual salary cap of CHF 148,200.   

Core benefits in Switzerland   

Beyond mandatory protections, many Swiss employers provide additional benefits to support employee wellbeing and job satisfaction. Key areas include: 

Health insurance  

Basic health insurance, known as Lamal, is obligatory for all Swiss residents. However, company schemes are not mandatory; employees can choose their plan and receive a reimbursement or allowance. Employees can also opt into a group scheme offered by their employer, which typically includes beneficial group tariffs and additional benefits, while simplifying administration. 

Many employers offset premiums by providing allowances or covering additional services such as dental care, vision care, and mental health support.  

Life and disability insurance   

Many companies provide supplementary life and disability insurance, typically covering 1.5 to 3 times the employee’s annual salary. These plans often cover death benefits, a lump sum disability payment, and an income replacement style disability plan to cover employees unable to work due to medical reasons. 

Supplementary pension contributions   

In addition to the social security provision, many companies provide a supplementary pension plan (noted as Pillar 2 above), offering benefits like: 

• Death in Service Survivor 

• Death After Retirement  

• Disability pensions for dependants, including children 

Contributions for both employer and employee vary depending on age and salary, with some companies combining pensions with life and disability insurance into a single package for simplicity. 

Guarantee fund 

The Swiss Guarantee Fund (“fonds de garantie”) is financed by contributions from all pension funds and serves two key purposes: 

• Subsidising pension funds with an unfavourable age structure when old age bonuses exceed 14 % of coordinated salaries 

• Guaranteeing statutory benefits in case of pension fund insolvency, up to the amount of CHF 129’060 until 2022, CHF 132’300 until 2024 and CHF 136’080 from 2025 

1e pension plans 

Since 2017, 1e plans have gained popularity for offering flexibility to Swiss pension funds, insured members, and employers within the second pillar. These plans cater to high earners whose salaries exceed the statutory threshold (as above), providing greater control over retirement investments. 

What sets the 1e plan apart: 

• Shifting from annuities to lump sum payments 

• Aligning investment strategies with individual risk tolerance versus regular mandatory Swiss pension plans 

Popular benefits in Switzerland   

Wellness benefits and allowances   

Swiss companies increasingly prioritise employee wellness, with many offering fitness subsidies, mental health support programmes, and health screenings. Additionally, allowances for meditation classes and ergonomic home office equipment are gaining traction. 

In addition to the above, wellbeing allowances are increasingly common, replacing gym membership and discounts, and giving employees more flexibility to prioritise their health. 

Transport and mobility benefits   

Switzerland’s extensive public transport network makes commuting allowances and subsidised travel cards common among employers.

Additionally, electric vehicle subsidies and cycling allowances are popular, aligning with the country’s sustainability goals. Providing company cars to executive employees is becoming less common due to tax inefficiency; instead, monthly transportation allowances or fixed cash benefits are becoming more common. 

Tech benefits   

As hybrid work models gain traction, Swiss employees value technology-driven perks, such as home office stipends, IT equipment allowances, and mobile phone subsidies. These benefits are now standard offering for many employers. 

Family and childcare benefits   

Family-friendly benefits are increasingly essential in Switzerland. Employers are offering childcare allowances and contributions toward private schooling or daycare, extended parental leave options, as well as flexible working hours and remote work options to further support working parents.  

Holiday buy schemes and discount portals have also gained popularity in recent years, with more companies adopting these benefits. 

Meal subsidies 

Meal subsidies remain a staple benefit provided by multinational and leading local employers, ensuring all employees have access to affordable meals. 

Key considerations for implementing employee benefits in Switzerland   

1. 13th month salary. While not legally mandated, offering a 13th-month salary is customary in Switzerland. This additional payment, often delivered as a year-end bonus, is widely expected by employees and plays a key role in enhancing loyalty and retention.  

2. Benefits tech. Employee benefits platforms, like OneHub, can manage the diverse language needs of Switzerland’s workforce. We often see Swiss employers provide access to their benefits platform in English, French and German, ensuring inclusivity and ease of use. 

3. Costs. Switzerland has some of the highest employee benefit costs in the EMEA region. To maximise the perceived value of these investments, it’s important to provide employees with full visibility into all their benefits. This includes both actively selected benefits and those automatically provided, such as accident insurance.   

To learn more about how a global benefits platform can help you deliver a seamless employee experience in Switzerland, and around the globe, download ‘Your guide to global benefits tech’, or speak to one of our benefits experts.