From self-employed to employer
Hiring your first employee is one of the most significant milestones in a growing Swiss sole proprietorship. Until that moment, administrative management is relatively straightforward: personal OASI, basic bookkeeping, VAT returns. With the arrival of an employee, however, legal, contribution and insurance obligations kick in that radically transform the administrative burden.
The transition from solo entrepreneur to employer is governed by the Code of Obligations (CO, art. 319–362), the Federal Act on OASI (AHVG), the Federal Act on Occupational Pension Plans (BVG) and the Federal Act on Accident Insurance (UVG). Underestimating these requirements can lead to penalties, back-contributions with interest and problems with compensation offices.
The good news is that digital tools now automate much of this: from calculating social contributions to generating payslips, from withholding tax returns to electronic data transmission to OASI offices. This guide walks you through everything you need to know — and do — when hiring your first employee.
When it's time to hire
It's not always easy to tell when the workload justifies hiring. Here are five concrete signs that the time has come:
You consistently work over 50 hours per week
If for months you have been regularly exceeding 50 hours per week, work quality and your health suffer. An employee lets you delegate operational tasks and focus on strategy and business development.
You turn down clients or jobs due to lack of time
Every declined client is lost revenue. If you regularly find yourself turning down requests because you cannot handle them, the opportunity cost likely exceeds the cost of an employee.
Deadlines are systematically missed
Delivery delays, late VAT filings, invoices sent weeks late: these are all symptoms of overload. A team member dedicated to operations eliminates these bottlenecks.
You spend more time on admin than on core business
If bookkeeping, invoicing, emails and bureaucracy absorb more than 40% of your time, you are diverting resources from value-generating work. An employee — even part-time — can free up precious hours.
Revenue covers the total cost of an employee
Calculate the gross annual cost (salary + social contributions + insurance: approximately 115–120% of net salary). If current revenue or pipeline contracts comfortably cover this cost, hiring is financially sustainable.
New legal obligations for employers
When you hire your first employee, a series of legal obligations come into effect that previously did not apply to you. Here are the main ones:
Registration as OASI/DI/APG employer
You must register with the cantonal OASI compensation office as an employer within 30 days of the start of employment. From that point you are responsible for withholding and paying OASI/DI/APG contributions for all employees (art. 12 AHVG).
BVG affiliation (occupational pension)
If the employee's annual salary exceeds the BVG entry threshold (CHF 22,050 in 2026), you are required to affiliate the employee with an occupational pension institution within the legal deadlines. Contributions are shared equally: at least 50% paid by the employer.
Mandatory accident insurance (UVG)
Every employee — including part-time — must be insured against occupational accidents (UVG) from the first day of work. Occupational accident insurance (BU) is entirely at the employer's expense. For employees working at least 8 hours/week, non-occupational accident insurance (NBU) is also mandatory.
Withholding tax (Quellensteuer)
If the employee does not hold a C permit or Swiss citizenship, you are required to withhold tax at source from the salary and remit it to the cantonal tax authority. Rates vary by canton, marital status and number of children. Calculation is monthly and reporting is quarterly.
Work permits for foreign nationals
If you hire a non-EU/EFTA citizen, you must obtain a work permit before employment begins. For EU/EFTA citizens, the procedure is simplified but notification to the cantonal migration authorities remains mandatory.
Salary documentation retention
The employer must retain all salary-related documentation, paid contributions and salary certificates for at least 10 years (art. 958f CO). Annual salary certificates must be transmitted to the tax authority.
Mandatory employer insurances
Beyond social contributions, hiring your first employee requires taking out specific insurances:
UVG — Occupational accident insurance
Mandatory for all employees from the first day of work. Covers workplace accidents and occupational diseases. The premium is entirely at the employer's expense and varies by industry sector and risk class (from 0.04% to over 10% for high-risk sectors).
BVG — Occupational pension (2nd pillar)
Mandatory if the annual salary exceeds CHF 22,050 (2026 threshold). The employer must affiliate the employee with a BVG foundation and pay at least 50% of contributions. Old-age credits range from 7% (age 25–34) to 18% (age 55–65) of the coordinated salary.
Daily sickness benefits insurance
Not mandatory under federal law, but strongly recommended and required by most collective labour agreements (CLA). Without this insurance, the employer is obliged to continue paying salary during illness according to the Bern/Zurich scale (3 weeks in the first year of service).
UVG — Non-occupational accident insurance (NBU)
Mandatory for employees working at least 8 hours per week for the same employer. The premium is borne by the employee, but the employer is responsible for arranging the policy and making the salary deduction.
Warning: failure to arrange UVG insurance is a criminal offence. If an employee suffers an accident without coverage, the employer is personally liable for all costs and may face criminal penalties. Register with SUVA or an authorised private insurer before employment begins.
How to draft the employment contract
The individual employment contract (art. 319–343 CO) does not require written form to be valid, but putting it in writing is strongly recommended. Here are the steps for a compliant contract:
Define the type of employment relationship
Permanent or fixed-term? Full-time or part-time? The contract type determines rules on termination, probation and contributions. For a first hire, an open-ended contract with a 1–3 month probation period (art. 335b CO) is the most common choice.
Specify the essential conditions
The contract should state: start date, role/duties, place of work, weekly hours, gross salary (monthly or hourly), 13th salary (if applicable), holiday entitlement (minimum 4 weeks/year by law, 5 weeks until age 20), probation period and notice terms.
Include mandatory and recommended clauses
Clauses required by law: expense reimbursement (art. 327a CO), continued salary payment during illness. Recommended clauses: confidentiality, non-competition (art. 340 CO), intellectual property, company regulations, jurisdiction.
Check the collective labour agreement (CLA)
If your business falls within a sector with a mandatory CLA (construction, hospitality, cleaning, etc.), the CLA minimum conditions override the individual contract. Check at www.service-cct.ch whether an applicable CLA exists.
Sign and retain the contract
Have two original copies signed (one for the employer, one for the employee). Retain your copy for at least 10 years after the employment relationship ends. Document management software lets you archive the contract digitally in a compliant manner.
Setting up payroll from the first employee
Payroll management is probably the most complex aspect for first-time employers. Here is how AccountEX simplifies the process from day one:
Automatic contribution calculation
The software automatically calculates OASI/DI/APG, ALV, UVG, BVG and family allowances based on gross salary, employee age and canton. No more Excel spreadsheets or error-prone manual calculations.
Automatic withholding tax
For employees subject to Quellensteuer, the system automatically applies the correct cantonal tax scale based on marital status, children and confession. The quarterly return is generated and can be submitted electronically.
Compliant payslip generation
Each month the software generates detailed payslips with all contributions, deductions and net pay. Payslips comply with Swiss standards and are digitally archived.
Annual salary certificate
At year-end, AccountEX automatically generates the salary certificate (Lohnausweis) for each employee, completed according to the official Federal Tax Administration form.
Electronic transmission to OASI offices
Salary data can be electronically transmitted to the OASI compensation office via the standard ELM format (Einheitliches Lohnmeldeverfahren), eliminating manual completion of annual forms.
Personnel cost dashboard
A dedicated dashboard displays total personnel costs in real time, including social contributions and insurances, allowing you to monitor the financial impact of hiring month by month.
AccountEX automatically handles OASI, UVG and FAK rate updates at each year-start. You do not need to manually update tables or percentages: the software is always aligned with current federal and cantonal rates.
Practical tips for your first hire
- Register the employment with the OASI compensation office within 30 days of the start of employment — delays generate late-payment interest and possible penalties
- Arrange UVG insurance before the employee's first working day: without coverage, you risk personal liability for any accident
- Budget for the total cost of the employee (salary + contributions + insurance): the actual employer cost is approximately 15–20% above gross salary
- Put the employment contract in writing even though the law does not require it: in case of dispute, a written contract is your best protection
- Check whether a mandatory CLA applies to your sector — CLA minimum conditions override the individual contract
- Retain all salary documentation for at least 10 years: payslips, salary certificates, contribution statements and payment confirmations
- Use AccountEX to automate payroll, contributions and withholding tax from your very first employee — save time, eliminate errors and stay compliant
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Social contributions for employers
As an employer, you are responsible for withholding the employee's share and paying both the employee's and your own share. Here is the breakdown for 2026, calculated on a gross annual salary of CHF 60,000:
BVG rates depend on the employee's age and the pension institution chosen. UVG rates vary by the activity's risk class. Family allowance (FAK) rates differ by canton. Use an up-to-date payroll software for precise calculations.