Hiring Your First Employee in Switzerland: The AHV Setup to Do Before Payday One

Your first hire turns you into a small social-security department. Here's what to register, what to deduct and what to pay, with 2026 rates.

You hired your first employee. Congratulations.

You now also run a small social-security department.

That sounds worse than it is. Swiss payroll has a handful of moving parts, and once they're set up, they repeat every month. The trouble only starts when you pay the first salary before setting them up.

This guide covers what to register, what to deduct, what to pay, and the 2026 rates, with a sample payslip using hypothetical numbers.

The building blocks of a Swiss payslip

Think of Swiss payroll as five layers:

AHV/IV/EO: the first pillar (old-age and survivors', disability, and loss-of-earnings insurance).
ALV: unemployment insurance.
FAK: family allowances.
UVG: accident insurance.
BVG: the second pillar (occupational pension).

The first three usually run through the same office, your compensation office (Ausgleichskasse / caisse de compensation). UVG runs through an accident insurer. BVG runs through a pension fund.

Step 1: Register with a compensation office

Before the first salary, register your company as an employer with a compensation office. That's usually the cantonal office, or the compensation office of a professional association if you're a member.

You'll register each employee using their AHV number (the 13-digit social security number starting with 756).

From then on, the rhythm is typically:

During the year: the office bills you advance contributions based on your expected payroll.
After year-end: you declare the actual salaries paid by 30 January (AHVV Art. 36), and the office settles the difference.

Ask your compensation office for its payment schedule. Filing or paying late can trigger late-payment interest.

Step 2: Know the 2026 rates

These rates come from the Federal Social Insurance Office (BSV) for 2026.

AHV/IV/EO: 10.6% of salary

5.3% paid by the employer.
5.3% deducted from the employee's salary.

There's no upper salary limit for AHV/IV/EO contributions.

On top of this, compensation offices charge the employer an administrative-cost contribution. It's capped at 5% of the AHV/IV/EO contributions, and each office sets its own scale.

ALV: 2.2% of salary up to CHF 148,200

1.1% employer, 1.1% employee.
Only on salary up to CHF 148,200 a year. Since 2023 there's no extra solidarity contribution on salary above that.

FAK: family allowances (canton-specific)

Family allowances (child and education allowances) are mainly financed by employer contributions (in Valais, employees also contribute). The contribution rate and the allowance amounts vary by canton and by family compensation fund. Your compensation office will tell you the rate that applies to you.

UVG: accident insurance (compulsory)

Every employer has to insure employees against accidents under the Accident Insurance Act (UVG). In broad terms:

Occupational accidents (at work) are paid for by the employer.
Non-occupational accidents (outside work) are also covered for employees who work at least 8 hours a week for you (UVV Art. 13), and that premium can usually be deducted from the employee's salary.

Premium rates depend on your insurer and your industry risk class.

BVG: the second pillar

Employees earning at least CHF 22,680 a year (2026 entry threshold) must be insured with a pension fund. The coordination deduction is CHF 26,460, and the upper limit of salary covered by mandatory BVG is CHF 90,720. The employer pays at least half of the contributions.

BVG has its own logic, so it gets its own article: Do I Need a Pension Fund for My GmbH? BVG for Small Employers, Explained.

A sample payslip (hypothetical)

All amounts are made up to show the structure. Your UVG, FAK and BVG figures depend on your insurer, canton and pension plan.

Employee: monthly gross salary CHF 6,000.

AHV/IV/EO (5.3% each) — Employee pays: CHF 318.00; Employer pays: CHF 318.00
ALV (1.1% each) — Employee pays: CHF 66.00; Employer pays: CHF 66.00
FAK — Employee pays: – (except in Valais); Employer pays: canton rate × salary
UVG occupational accidents — Employee pays: –; Employer pays: insurer's rate
UVG non-occupational accidents — Employee pays: insurer's rate (if deducted); Employer pays: –
BVG — Employee pays: per pension plan; Employer pays: at least the employee's share
Compensation office admin costs — Employee pays: –; Employer pays: office's rate

So the employee's net salary is CHF 6,000 minus CHF 384 (AHV and ALV), minus their non-occupational accident and BVG shares.

And your cost as employer is CHF 6,000 plus CHF 384, plus FAK, the accident premium, your BVG share and admin costs.

The lesson: budget for your first hire at more than the gross salary. Ask your compensation office, insurer and pension fund for real numbers before you sign the contract.

Step 3: Set up the other insurers

Before the first payslip:

Accident insurance (UVG): take out a policy. This is compulsory.
Pension fund (BVG): affiliate with a pension fund if anyone earns above the entry threshold, which most full-time employees do.
Optional, but common: daily sickness allowance insurance (Krankentaggeld), which covers salary during longer illness. It isn't compulsory under federal law, but employment contracts and collective agreements often require it. Without it, you as employer must keep paying salary for a limited time if an employee is ill (OR Art. 324a).

Step 4: Pay salaries and contributions on time

Every month:

Calculate gross salary, deductions and net salary.
Pay net salaries to employees.
Pay the compensation office, insurer and pension fund according to their schedules.
File the payslips and payment confirmations. Your Treuhänder will want them (see The Month-End Pack Your Treuhänder Actually Wants).

Every year:

Declare the year's actual salaries to the compensation office by 30 January.
Give each employee a salary certificate (Lohnausweis) for their tax return.

Special cases to ask about

These depend on the person and the canton. Check them with your Treuhänder or compensation office:

Withholding tax at source (Quellensteuer): applies to foreign employees resident in Switzerland without a C permit (unless they're married to a Swiss citizen or C-permit holder) and to employees living abroad. The employer deducts it and pays it to the canton.
Very small salaries: salaries up to CHF 2,500 a year per employer are exempt from AHV contributions unless the employee asks for them to be paid. This exemption never applies to household staff or the arts and culture sector.
Employees above the AHV reference age still pay contributions, but only on salary above an allowance of CHF 16,800 a year (CHF 1,400 a month).
Cross-border employees (living abroad) may fall under another country's social security. Ask your adviser.

Founders: you're on the payslip too

If you're a founder-director and pay yourself a salary from your own GmbH or AG, the same rules apply to you, even if you're the sole owner.

One trap: if you pay yourself a very low salary and high dividends, the AHV office may requalify part of the dividends as salary. Agree a sensible salary/dividend mix with your Treuhänder. See also 7 Money Mistakes Swiss Founders Make in Year One.

The first-hire checklist

Registered as an employer with a compensation office
Employee registered (AHV number)
UVG accident insurance in place
BVG pension fund affiliation (if salary ≥ CHF 22,680)
FAK rate known for your canton
Withholding tax checked (if applicable)
Payroll set up with all deductions
Payment schedule for every office and insurer in your calendar

Bottom line

Swiss payroll isn't hard. It's just unforgiving if you start late.

Set up the five layers before the first salary, budget above gross, and let the monthly rhythm run.

FAQ

What are the AHV/IV/EO contribution rates in 2026?

10.6% of salary, split 5.3% employer and 5.3% employee, with no upper salary limit. Compensation offices usually add an administrative-cost contribution for the employer.

What is the ALV rate in 2026?

2.2% (1.1% employer, 1.1% employee) on salary up to CHF 148,200 a year. Since 2023 there's no solidarity contribution above that.

Do I have to register my first employee with AHV?

Yes. Employers register with a compensation office and pay AHV/IV/EO, ALV and FAK contributions on salaries.

Is accident insurance compulsory for employers in Switzerland?

Yes. Employees must be insured under the UVG. The employer pays the premium for occupational accidents.

Do the same rules apply if I'm the only employee of my own GmbH?

Yes. Founder-directors who draw a salary, including sole owners, are covered by the same social insurance rules.

Pay salaries and social-insurance bills from one account

Keep the calculations with your payroll tool or Treuhänder, then pay everything from one multi-currency Firma account: net salaries by SIC (or SEPA for euro salaries), and your compensation office, pension fund and accident insurer bills by Swiss QR-bill. Email a QR-bill or snap a photo, approve with one click, and it's paid. Verification takes about two days, and if we can't verify your company, there's nothing to pay.

Open your Firma account →

New company? Start with How to Open a Swiss Business Account in Days, Not Weeks. Paying contractors abroad as well? See How to Pay EU Suppliers from a Swiss GmbH (SEPA vs SWIFT).

This article is general information, not legal, tax, or investment advice. Talk to a qualified adviser about your situation.

Firma is a regulated financial technology company, not a bank. Banking services are provided through banking partners. Balances are digital stablecoin tokens, not bank deposits, and are not covered by esisuisse.

Sources: Federal Social Insurance Office, amounts valid from 1 January 2026; AHV/IV information centre; Accident Insurance Act (UVG); Federal Compensation Office, salary declaration; AHV/IV info sheet 2.01, contributions; ESTV, withholding tax; Firma.