Salary deductions in Switzerland 2026

What are salary deductions?

Salary deductions are amounts that are deducted from an employee's gross salary before the net salary is paid out. In Switzerland, many of these deductions are required by law and include:

• Old-Age and Survivors' Insurance (AHV)
• Disability Insurance (IV)
• Income Compensation Scheme (EO)
• Unemployment Insurance (ALV)

These deductions serve as social security in old age, in the event of disability or loss of earnings. In addition to mandatory deductions, there are voluntary deductions such as contributions to the pillar 3a or daily sickness benefits insurance.

For employers, it is crucial to make all deductions correctly and to show them transparently on the payslip.

Current changes and key information for 2026

AHV 21 reform: Standard retirement age and flexible pension withdrawals

The reform of Old-Age and Survivors' Insurance (AHV) 21 introduced a standard retirement age of 65 for men and women. This change is being implemented gradually:

• Women born in 1961 or later will retire three months later each year.
• Flexible retirement between 63 and 70 years.

This adjustment also affects the occupational pension scheme (BVG), as the new reference age of 65 also applies here.

Contribution rates 2026: No changes

The contribution rates for AHV, IV and EO remain unchanged at 10.6%, which are equally shared by employer and employee.
The contribution rate for Unemployment Insurance (ALV) also remains stable at 2.2% for income up to CHF 148,200.

Key figures for 2026:

• Maximum annual salary for ALV and UVG: CHF 148,200
• Pillar 3a tax-deductible:
  • With BVG: CHF 7,056
  • Without BVG: CHF 35,280

Mandatory social security contributions in Switzerland

In Switzerland, most salary deductions are required by law and cover various social insurances. Employers and employees share these costs.

Old-Age and Survivors' Insurance (AHV)

• Mandatory for all employed persons from the age of 17.
• Contribution rate: 8.7% of the gross salary (employer and employee each 4.35%).
• Example:
  • Gross salary: CHF 5,000
  • AHV deduction: CHF 217.50 (4.35%) for the employee

Disability Insurance (IV) and Income Compensation Scheme (EO)

• IV contribution rate: 1.4% (shared between employer and employee)
• EO contribution rate: 0.5% (shared between employer and employee)

Unemployment Insurance (ALV)

• Contribution rate: 2.2% up to an annual salary of CHF 148,200.
• Example:
  • Gross salary: CHF 5,000
  • ALV deduction: CHF 55 (1.1%) for the employee

Occupational pension scheme (BVG)

• Mandatory from an annual salary of CHF 22,050.
• The salary is insured after deduction of the coordination deduction (2024: CHF 25,725).
• Maximum insured salary: CHF 88,200.
• Contributions vary depending on the age group.

Accident Insurance (UVG)

Occupational accident insurance (BUV)

• Covers occupational accidents and occupational diseases.
• Paid entirely by the employer.

Non-occupational accident insurance (NBUV)

• Covers accidents outside working hours.
• Premiums can be borne by the employee.

Daily sickness benefits insurance (KTGV)

• No legal requirement, but recommended.
• Secures income in the event of prolonged illness.
• Contribution sharing between employer and employee is possible.

Special case: Withholding tax

Applies to foreign employees without a C permit.
Depending on:

• Salary level
• Marital status
• Number of children
• Employment situation of the partner

Additional voluntary pension provision

Pillar 3a: Private pension provision

• Tax-deductible.
• Maximum deductible amount 2024:
  • With BVG: CHF 7,056
  • Without BVG: CHF 35,280

Example of a payslip

Self-employed and non-employed persons

• Self-employed persons pay social insurance contributions themselves, depending on their income.
• Pillar 3a as a pension option is particularly attractive.

Practical tips for companies

1. Updating contribution rates

• Take into account legal changes such as AHV 21.
• Consider changes to BVG and ALV.

2. Use of software solutions

• Automate payroll accounting with payroll software.

3. Documentation and transparency

• Accurate recording of all deductions (AHV, IV, EO, ALV).
• Consideration of voluntary deductions (e.g. pillar 3a).

4. Preparation for audits

• Document correct payslips.
• Ensure compliance with legal requirements.

Conclusion

For companies, the correct calculation and payment of salary deductions is crucial to meet legal requirements and avoid financial risks. Digital solutions and regular updates help minimize errors and ensure transparency.