Swiss Social Insurance: AHV, IV, EO, ALV, BVG, and UVG for Swiss Companies

Switzerland's social insurance system is a mandatory multi-pillar framework that every Swiss AG and GmbH must navigate when hiring employees. Registration with the cantonal AHV compensation office is required before the first salary is paid. This guide covers all mandatory social insurance branches, their contribution rates, registration requirements, and the payroll obligations that arise from Swiss employment.

Overview: the three pillars

Swiss social security is structured around three pillars, each addressing a different aspect of financial protection:

• �First pillar (AHV/IV/EO): State pension (Alters- und Hinterlassenenversicherung), disability insurance (Invalidenversicherung), and income compensation (Erwerbsersatzordnung). Mandatory for all persons working or residing in Switzerland.
• �Second pillar (BVG): Occupational pension (Berufliche Vorsorge). Mandatory for employees earning above the BVG entry threshold. Employer and employee each contribute to an individual pension account.
• �Third pillar (3a/3b): Voluntary private savings (Saule 3a/3b). Tax-deductible within limits. Not an employer obligation.

AHV / IV / EO — first pillar contributions

The combined AHV/IV/EO contribution rate is 10.6% of gross salary, split equally between employer and employee (5.3% each). There is no salary ceiling for AHV/IV/EO — the rate applies to the entire gross salary regardless of amount.

Registration

Every company must register with the cantonal AHV compensation office (Ausgleichskasse) before paying the first salary. In Zug, this is the SVA Zug (Sozialversicherungsanstalt des Kantons Zug). Registration is straightforward — the company submits its Handelsregister extract and details of anticipated payroll. The compensation office assigns an employer number and sets the payment schedule (monthly or quarterly advance payments, with annual reconciliation via the Lohnbescheinigung salary certificate).

ALV — unemployment insurance

Unemployment insurance (Arbeitslosenversicherung) is administered at the federal level under the AVIG (Arbeitslosenversicherungsgesetz). The contribution rate is 2.2% of gross salary up to the ALV maximum annual salary (CHF 148,200 for 2026), split equally at 1.1% employer and 1.1% employee. On salary above CHF 148,200, a solidarity contribution of 1% applies (split equally at 0.5% each) — this contribution does not generate additional insurance entitlement.

BVG — occupational pension (second pillar)

The BVG (Bundesgesetz uber die berufliche Alters-, Hinterlassenen- und Invalidenvorsorge) creates mandatory occupational pension coverage for employees earning above the entry threshold. Employer and employee each contribute to the employee's individual pension account, which accumulates savings over the working career.

BVG thresholds (2026)

• �Entry threshold (Eintrittsschwelle): Employees earning above CHF 22,680 per year are subject to mandatory BVG insurance.
• �Coordination deduction (Koordinationsabzug): CHF 25,725 per year is deducted from the salary to calculate the BVG-insured salary (the AHV pension covers this portion). Insured salary (Koordinierter Lohn) = gross salary ? CHF 25,725.
• �BVG maximum insured salary: CHF 90,720 per year. Salary above this is not mandatorily insured under the BVG minimum (but can be insured on a voluntary basis via a supra-mandatory plan).
• �Risk insurance from age 17: Death and disability coverage begins at age 17; savings accumulation begins at age 25.

Contribution rates

BVG contribution rates (Altersgutschriften) are set by statute and depend on age:

The employer must contribute at least 50% of the total BVG premium (risk + savings). Most employers contribute 50/50, but some pension plans require or offer higher employer contributions. The company must affiliate with a certified BVG pension fund (Vorsorgeeinrichtung) before hiring the first employee who meets the threshold.

UVG — accident insurance

Accident insurance (Unfallversicherung) is mandatory under the UVG (Bundesgesetz uber die Unfallversicherung) for all employees working at least 8 hours per week. The insurer is either SUVA (for certain sectors: construction, forestry, metalworking) or a private insurer approved by FINMA.

• �Occupational accidents (BU): Employer pays the full premium. Rate varies by industry and risk category (typically 0.1%–2% of salary).
• �Non-occupational accidents (NBU): Employee pays the full premium (deducted from salary). Rate: approximately 2.5% on the first CHF 148,200 of salary. Applies only to employees working ?8 hours per week for the employer.
• �Part-time employees (fewer than 8 hours/week): Only occupational accident coverage is mandatory; non-occupational accident coverage is through the employee's health insurer.

KTG — sick pay insurance

Daily sickness benefit insurance (Krankentaggeldversicherung) is not mandated by federal law for employers, but the OR (Art. 324a/324b) requires employers to continue paying salary for a limited period when an employee is sick. To avoid unlimited employer liability, most companies take out a KTG group policy that covers 80% of salary for up to 720 or 730 days after a 30-day waiting period. The premium is typically shared 50/50 between employer and employee.

Total employer social security cost — illustrative example

For a company paying a gross monthly salary of CHF 10,000, the total monthly employment cost to the employer is approximately CHF 11,700–12,100 including all social insurance contributions. This is a key budgeting input for Swiss AG and GmbH founders planning their first hire.

Family allowances (Familienzulagen)

Family allowances (FAK — Familienausgleichskasse) are mandatory monthly payments to employees with dependent children. The minimum amounts under the FamZG (Familienzulagengesetz) are CHF 215 per month per child (child allowance) and CHF 268 per month during secondary and tertiary education. Some cantons (including Zug) set higher minimum rates. The employer pays these allowances from the cantonal FAK fund to which it contributes (typically 1.5–2.5% of payroll, employer-only).

Payroll registration sequence for a new Swiss company

• �Register with cantonal AHV compensation office (SVA Zug) before first salary payment
• �Affiliate with a BVG-certified pension fund before hiring employees meeting the BVG threshold
• �Register with UVG insurer (SUVA or private insurer) for accident insurance
• �Obtain KTG group sick pay policy from insurer
• �Register with cantonal FAK for family allowances
• �Set up payroll accounting (monthly salary slips, AHV deductions, year-end Lohnausweis)

Further reading

• >Swiss accounting & payroll — outsourced compliance for AG and GmbH
• >Swiss company formation — setting up before your first hire
• >Zug tax rate — corporate and personal tax context