“My little startup is growing and growing. In order to regularly provide content for you and to stay up to date, I've got energetic support. Now I've made the step from being a sole trader to being an employer, my next step towards professionalism. Yeah! In addition to the familiarization, I now also have the administrative responsibilities for proper registration and billing. These include an employment contract, payroll and social insurance contributions.”
1. Working conditions
First, you need to clarify whether you want to hire someone for a certain
period of time, that is, for a certain project duration or for an indefinite period,
and whether an hourly or monthly wage is to be paid. A monthly salary is
certainly the simplest solution because from the moment you enter
everything it runs almost automatically as you can instruc the bank to make it a
permanent order. In the case of irregular assignments or a manageable stint,
however, the hourly wage seems the right choice.
2. The employment contract
I would strongly recommend an employment contract because here, both parties
can clearly define the framework conditions of the cooperation beforehand. In the
specialist jargon, this means the rights and obligations of employees and employers.
An employment contract is not subject to any formal requirements and can be concluded
verbally, with the exception of a teaching contract. However, it is fruitful for both parties
to create a written contract. Typical contracts are: contract and job description, job posting,
duties of the employee (for example employment, place of work and time, fiduciary duties,
etc.), obligations of the employer (financial compensation, personal insurance) and termination.
3. Employment Regulations
While the employment contract is based on the relationship between the individual
employee and the employer, it can differ in content depending on the employee and the
personnel regulations contain general requirements that apply equally to all employees.
These include regulations about illness, leave, military service, overtime, etc. The staff
regulations can be drawn up as a supplementary document to the employment contract,
or can be included directly. And I have also experienced in odd jobs again and again,
it makes the workflow much easier as soon as there are clear rules and you do not have to renegotiate all the time. But, of course, this does not happen from one day to the next, but must grow with the company and reflect its "DNA".
4. Social insurance
As soon as you hire a new employee, you must register them within 30 days with
the relevant social insurance companies. Under the umbrella term "social insurance",
various social institutions are combined in the areas of age, disability, death,
unemployment, accident and illness, as well as support for families. For you as an
employer, there are four relevant insurance companies:
- Compensation Fund (AHV)
- Occupational Pension Plan (PK)
- Accident insurance (UVG)
- Health insurance (KTG)
You must report the calculated wage sum per month or year, and the final payroll
will be made at the end of the year. The pension fund is an exception. The reported
salary is the basis for the insurance benefits and only in exceptional cases, at the
end of the year, there is an adjustment to the actual paid wage. At the pension fund,
there is a minimum wage which must be earned in order to be obliged to become
insured at all. As a rule, 10% - 12% of the gross salary is deducted by the employer
for these social insurance schemes, for any employee over 25 years of age. Depending
on the situation, however, other deductions may also be made (for example withholding taxes).
5. How do I perform simple payroll accounting?
For the sake of simplicity, I distinguish between manual payroll accounting (for
example with Excel) or billing with a professional payroll program. If you choose
a professional salary program, you should pay attention to Swissdec certification.
It is worthwhile to use a professional salary program with at least 10 employees.
6. Notice periods
If no termination periods are stipulated in the employment contract, the contracting
law (OR) applies: Termination periods during the probation period are 7 days, one
month during the first year of employment, and two months for a multi-year employment
relationship. For a period of more than nine years, 3 months until company exit
is required by law.
7. Checklist Employees
If employees are recruited or the holder is an employee, the following applies:
1. Registration of compensation fund (Kantonale Ausgleichskasse or Verbandsausgleichskasse)
2. Registration for the pension fund (entry threshold from CHF 21'150 p.a. Effective 2016)
3. Registration for accident insurance
4. Registration for sick leave
5. Create an employment contract (at most in combination with personnel and
6. Ensure processing of salary payment
7. Ensure working time recording
8. Any further questions or material needed?
Are you looking for a template for a small payroll on Excel? Write me an email and I will get in touch with you.