Why absences erode margins even when salary is "covered"
In a Swiss SME with few employees, every day of absence weighs on operational results more than the simple cost of salary suggests. An absent technician misses a service call, a project manager stalls progress, a sales rep misses an appointment. If you don't plan for the total cost — continued salary, replacement, overtime, delays — margins shrink without accounting immediately showing the cause.
Absences are not an exceptional event: they are a recurring business variable. According to federal labour statistics (FSO/SAKE), in 2024 an average of around 8.5 days of absence due to sickness and injury per full-time position is recorded; to these must be added paid leave, family leave, military or civilian service and other statutory absences. In a team of fifteen people, even just two weeks of unplanned absence can equate to an entire month of lost productive capacity.
This guide explains how to quantify the real cost of absences in the Swiss context, how to integrate it into the personnel budget and how to use accounting tools — such as Accountex — to monitor the impact on margins month after month, without treating absence as "zero cost".
Types of absence and economic impact
Not all absences have the same cost structure. Before budgeting for them, it is worth classifying them to understand who pays what and when:
| Type of absence | Legal basis / practice | Who bears the salary | Typical indirect costs |
|---|---|---|---|
| Sickness | Art. 324a CO (continuation of salary) | Employer for the statutory period; then KTG if insured | Replacement, overtime, delivery delays |
| Non-occupational accident | Art. 324a CO + LAI | Employer (continuation), then AI benefits | Same as sickness; possible job reassignment |
| Occupational accident | LAINF | Accident insurance (daily allowance) | Reduced if covered by insurance; reorganisation costs |
| Vacation / rest | Art. 329a CO (min. 4 weeks/year; 5 if < 20 years old) | Employer (salary + contributions) | Plannable; opportunity cost if workload not redistributed |
| Maternity | EOA and art. 329f CO (14 weeks; possible extension in case of prolonged hospitalisation of the newborn) | EO compensation (80%, max. CHF 220/day); possible insurance top-up | Long-term replacement, training |
| Paternity / family leave | EOA (2 federal weeks); family/cantonal leave where provided | EO or cantonal compensation | Short but concentrated; impact on small teams |
| Military / civil protection service | MSA; service allowance and partial reimbursement to employer | Employer tops up difference; State reimburses part | Recurring and predictable absences over time |
The most common mistake in SMEs is to consider only the salary line visible in accounting as "covered", overlooking the productivity gap and replacement costs. A credible absence budget must include both components.
Continuation of salary: the obligation many underestimate
In the absence of a contractual clause or more favourable KTG insurance, Article 324a of the Code of Obligations requires the employer to continue paying salary in case of sickness or non-occupational accident. The duration depends on years of service and the reference scales established in case law:
Reference scales (example)
The Bern, Basel, Zurich and Zug scales are the most widely adopted in practice. For an employee with few years of seniority, continuation covers for example three weeks at 100% (Bern scale in year 1); duration increases with seniority up to several months over the course of the year, as a rule at full salary unless otherwise agreed contractually or covered by KTG.
Check in the employment contract which scale applies and whether there is daily sickness allowance insurance (KTG) that modifies the split between employer and insurer.
After the statutory continuation period
Once the continuation of salary period has elapsed, the employer's KTG insurance normally takes over, if subscribed: coverage and waiting period depend on the policy. AI pays daily sickness benefits only in situations of prolonged incapacity (statutory waiting period of 360 days), not for short absences; for non-occupational accidents, however, AI intervenes after 3 days with approximately 80% of the insured salary.
If you have subscribed to KTG, the insurer may take over earlier or top up benefits. Mapping these transitions avoids coverage gaps and double counting in accounting.
How to calculate the real cost of an absence
"Payroll cost" is only the base. For an operational estimate use this simplified formula, adaptable to your sector:
Absence cost = Daily gross salary + social charges (OASI/DI/EO/ALV, LPP, LAA, possible KTG) + replacement or overtime cost + lost revenue or delay
Numerical example: a technician with an annual salary of CHF 78,000 has an estimated employer cost (including charges) of around CHF 95,000, equal to CHF 365 per working day. If they are sick for ten days and a colleague works overtime for CHF 1,200 to cover the service calls, the direct cost exceeds CHF 4,800 — without counting any contractual penalties or dissatisfied clients.
For vacation, the salary cost exists anyway (the employee receives their pay), but the economic cost emerges if you have not redistributed the workload: a project manager on vacation during a project closure can cause delays that cost more than their weekly salary.
Absence rate to budget for
In the absence of internal historical data, many Swiss SMEs use a prudent coefficient of 4–8% of annual gross payroll to cover sickness, replacements and related inefficiencies. With data from your attendance register, calculate the actual rate instead:
Absence rate (%) = (Total absence days ÷ Theoretical working days) × 100
Monitor the rate by department and by quarter: winter peaks, concentrated summer absences and sickness clusters in small teams are signals to adjust the budget or strengthen insurance coverage.
Internal, temporary or external replacements: choosing without burning margins
When an absence exceeds a few days, the question is not only "who pays the salary" but "who does the work". The options have different cost profiles:
Internal redistribution
Colleagues absorb the workload. Low direct cost, but risk of overtime, errors and burnout. Suitable for short absences and overlapping skills.
Temporary / agency staff
Agency or fixed-term contract. Higher hourly cost (often +30–50% compared to internal salary), but immediate capacity. Useful for critical roles or long absences.
Deferral / service reduction
No immediate replacement cost, but loss of revenue or delay. Often the most expensive choice for service-oriented companies with delivery penalties.
Document in the continuity plan who covers which critical processes (invoicing, approvals, key client contacts). In teams under ten people, a single prolonged absence in the back office can slow collections and accounting closings: an indirect cost that shows up weeks later.
Insurance and pension: what you recover and what remains the company's responsibility
Proper insurance coverage reduces the employer's exposure, but does not eliminate indirect costs. Here is a map of the main recovery sources:
| Instrument | What it covers | Typical limit |
|---|---|---|
| KTG (Krankentaggeld) | Employer's daily sickness allowance after agreed waiting period | 80–100% salary, variable duration (often up to 720 days in 900) |
| AI (Disability insurance) | Benefits for prolonged incapacity; non-occupational accident after 3 days | Approx. 80% of insured salary, annual cap; 360-day waiting period for sickness |
| LAINF | Occupational accidents and occupational diseases | Daily allowance (80% from day 3) + treatment coverage |
| Maternity insurance | Top-up or replacement of EO compensation | Depends on policy and CLA / contract |
| LPP (2nd pillar) | Disability benefits or insured salary continuation (if provided by the fund regulations) | Defined by fund regulations |
Record separately in accounting the costs of absent staff, benefits received and insurance premiums. This way the income statement reflects the net cost of absence and you can assess whether the current KTG policy is still adequate for the team's risk profile.
Integrating absences into the personnel budget
Treat absences as a standalone budget line, not as an unforeseen event. Recommended five-step procedure:
- Gather history: extract from the attendance register or payroll software the last 24 months of absences by cause (sickness, vacation, other).
- Calculate the average daily cost per role category: salary + charges, not just the net amount received by the employee.
- Estimate the indirect component: use a fixed percentage (e.g. 15–25% of direct cost) or recorded actual replacement costs.
- Plan vacation: distribute statutory and contractual vacation in the operational calendar to avoid critical overlaps during quarterly closings or peak season.
- Compare budget vs. actual every month: recurring variances signal a need for insurance coverage, hiring or process reorganisation.
Recommended provision
Some SMEs create an internal provision equal to 5–7% of gross payroll, credited monthly and used to absorb absence and replacement peaks. It is not mandatory from an accounting perspective, but it helps smooth the impact on margins and avoid cutting investments when a cluster of sickness cases arrives.
Accounting and control with Accountex
To manage absences without surprises, you need consistent data between payroll, attendance and accounting. Here is how to structure the entries:
Accounts and cost centres
- • Sickness absence salaries → personnel cost account (sub-item "continuation of salary")
- • KTG / AI benefits received → other operating income or reduction of personnel cost
- • Temporary and overtime costs → same cost centre as the department covered
- • KTG premiums → recurring personnel cost, allocated across FTEs
KPIs to monitor
- • Absence rate by department (monthly / quarterly)
- • Net absence cost / revenue (%)
- • Days lost due to uncovered replacement
- • Absence budget vs. actual variance
- • Margin per project net of assigned team absences
By linking payroll data, bank entries for insurance benefits and cost centres per project in Accountex, you get a clear view of how much absences affect results per client or job — decisive information for pricing, quotes and resource planning.
Reducing the impact: measures that cost less than a long absence
Financial planning goes hand in hand with operational prevention. Targeted investments often have a return greater than the cost of a single emergency replacement:
- Cross-documentation: every critical role has a "deputy" who knows essential procedures and access.
- Shared vacation calendar: block vacation during peak operational periods or tax deadlines.
- Clear sickness policy: medical certificate according to cantonal practice and CO, without creating an atmosphere of excessive control.
- Gradual return: for long absences, agreeing a reintegration plan with the doctor and employee reduces the risk of relapse.
- Annual policy review: align KTG and LPP coverage with average salary and team composition.
Operational checklist for management
Have I verified which continuation of salary scale (324a CO) applies to my employment contracts?
Do I know the waiting periods and coverage of the team's KTG, LAINF and LPP policies?
Have I calculated the actual absence rate over the last 24 months and translated it into an annual budget?
Is there a replacement plan for roles that, if absent, block invoicing or production?
In accounting, do I distinguish absence costs, insurance benefits and replacement costs to analyse net margin?
Is the vacation calendar aligned with the company's operational and tax deadlines?
Conclusion: absences are a management cost, not an unforeseen event
Sickness, vacation and leave are part of the normal operational cycle of every Swiss SME. Treating them as a budget line — with total cost calculation, adequate insurance coverage and accounting monitoring — prevents margins from eroding silently over the course of the year.
Start with the data you already have: attendance register, payslips and insurance policies. Quantify the actual absence rate, estimate indirect costs prudently and integrate the result into the personnel plan. With an integrated accounting tool like Accountex, you can link absences, costs and revenue per job and make decisions on hiring, pricing and insurance coverage based on concrete numbers — not assumptions.