Managing social insurance contributions is one of the core obligations of any employer in Switzerland. Every time a salary is paid, the company has to deduct and pass on the various contributions that fund the mandatory social insurance schemes. These contributions guarantee financial protection to workers throughout their working life and in particular situations such as retirement, disability, the birth of a child or involuntary loss of employment.
Whether you run a Swiss SME, a foreign company hiring staff in the country, a recruitment agency, or you use an Employer of Record (EOR) solution, understanding how AVS, AI, APG and AC contributions work is essential. Calculating, declaring and paying them follows precise rules, and getting them right is part of running compliant payroll in Switzerland.
What Are AVS, AI, APG and AC Contributions?
AVS, AI, APG and AC contributions are the main social charges deducted from salaries in Switzerland. They fund an essential part of the Swiss social protection system, covering in particular the risks tied to old age, disability, temporary loss of income and unemployment.
AVS, AI and APG contributions belong to the first pillar and are split equally between employers and employees. Unemployment insurance (AC), although it is also funded on an equal-share basis, follows its own specific calculation rules.
In practice, the employer deducts the employee's share directly from gross salary, then pays it over to the compensation fund together with its own share. This mechanism funds the mandatory social insurance schemes collectively while guaranteeing protection to everyone covered.
Old-Age and Survivors' Insurance (AVS)
Old-age and survivors' insurance (AVS) is the foundation of the Swiss pension system. Its main purpose is to provide an income to people reaching retirement age so that they can cover their essential needs.
It also protects the insured person's family in the event of death, through pensions paid in particular to a surviving spouse or to orphans.
AVS funding rests on solidarity between generations: the contributions paid by today's working population fund the benefits received by today's beneficiaries.
In 2026, a full individual pension ranges from CHF 1,260 to CHF 2,520 per month. Those figures assume a complete contribution record of 44 years; gaps in that record produce a partial pension below the minimum. For married couples, the combined amount of the two individual pensions cannot exceed CHF 3,780 per month. Since 2026, recipients of an AVS old-age pension also receive a 13th pension, paid in December. AI pensions continue to be paid twelve times a year.
Disability Insurance (AI)
Disability insurance (AI) steps in when a person's capacity to work is durably reduced following an illness, an accident or a congenital condition.
Its first mission is to help people stay in or return to work. It funds occupational reintegration measures, training and workplace adaptations, so that reintegration comes before compensation.
Where those measures do not allow a durable return to work, AI can grant a disability pension. In 2026, the minimum and maximum amounts match those of the AVS, meaning between CHF 1,260 and CHF 2,520 per month.
Loss of Earnings Compensation (APG)
Loss of earnings compensation (APG) temporarily makes up for a drop in income when certain situations prevent an employee from working.
Originally intended for people doing military service, civilian service or civil protection service, it now also covers maternity leave, the allowance paid to the other parent after a birth, adoption leave and certain leave taken to care for a child with a serious health condition.
APG therefore plays an essential role in maintaining workers' income during these interruptions provided for by Swiss law.
Unemployment Insurance (AC)
Unemployment insurance (AC) completes the protection offered by the first pillar by providing financial support to employees who involuntarily lose their job.
It also covers certain specific situations, such as temporary reductions in working hours, weather-related interruptions in some sectors, and employer insolvency.
Beyond paying benefits, AC also funds various measures designed to help people back into work, including training, retraining programs and other support schemes offered by the public employment services.
How Are AVS, AI, APG and AC Contributions Calculated?
Calculating Swiss social insurance contributions rests on two essential elements: the rates set by law and the salary used as the calculation base. The general principle is simple (apply a percentage to remuneration subject to social insurance), but the administrative reality demands care. Some contributions apply to the entire determining income, while others are capped by a statutory ceiling. Distinguishing the rules clearly is therefore essential to compliant payroll.
What Are the AVS, AI, APG and AC Contribution Rates?
AVS, AI, APG and AC contributions are calculated according to rates set at federal level. For employees, they rest on equal-share funding: the employer and the employee each cover part of the contributions due.
The rates applicable in 2026 are as follows:
AVS, AI and APG contributions are usually grouped on a single payslip line. Their combined rate comes to 10.6%, split equally between employer and employee, so each side carries 5.3% of the determining salary.
Unemployment insurance follows the same equal-share principle, with a total contribution of 2.2%, meaning 1.1% payable by the employee and 1.1% by the company, within the ceiling set by the regulations.
For the employer, these rates are a significant component of the total cost of employment. Applying them correctly is what makes payslips reliable and avoids later adjustments with the compensation funds.
Why Do the Rules Differ Between AVS, AI, APG and AC?
Although AVS, AI, APG and AC contributions appear together in day-to-day payroll, they do not rest on exactly the same calculation rules.
The main difference concerns whether or not a contribution ceiling applies.
AVS, AI and APG: Contributions With No Ceiling
AVS, AI and APG contributions are calculated on the entire determining salary. No maximum remuneration is set to limit the calculation base.
This means the combined rate of 10.6% applies to all income subject to social insurance, whatever the employee's salary level.
For example, an employee earning CHF 80,000 a year and a senior manager on CHF 250,000 will both pay AVS, AI and APG contributions on the whole of their determining salary.
This absence of a ceiling reflects the solidarity principle of the Swiss first pillar: everyone contributes according to their income, while benefits remain capped by maximum amounts set in law.
AC: A Contribution Capped by a Salary Ceiling
Unemployment insurance follows a different logic. The 2.2% contribution applies only up to the maximum insured earnings figure set by the Confederation.
In 2026, that ceiling is CHF 148,200 per year, or CHF 12,350 per month.
In practice, an employee whose monthly salary is below that limit contributes on their entire remuneration.
Where an employee earns CHF 16,000 a month, by contrast, only the first CHF 12,350 counts toward the AC calculation. The part of the salary above that amount is not subject to this contribution.
This difference in treatment is why social charges have to be calculated insurance by insurance, rather than by applying a single overall rate to all remuneration.
Which Salary Are Contributions Calculated On?
Applying Swiss social contribution rates first requires determining the base they apply to. In Switzerland, that base is known as the determining salary.
It covers all elements of remuneration regarded as consideration for the work performed by the employee. The concept is broader than fixed monthly pay and needs to be analyzed precisely when payroll is produced.
What the Determining Salary Includes
The determining salary includes, among other things:
- base monthly salary;
- the 13th month salary;
- performance-related bonuses;
- commissions;
- gratuities;
- compensation paid for untaken vacation;
- certain allowances and benefits granted by the employer.
Benefits in kind must also be taken into account where they represent an economic advantage for the employee.
A company car used privately is a typical case. Where the company provides an employee with a vehicle and covers the associated costs, private use is an element of remuneration subject to social insurance contributions.
For a company car, the private share is generally assessed on a flat-rate basis at 0.9% of the vehicle's purchase price (excluding VAT) per month, with a minimum of CHF 150 per month where that calculation gives a lower figure. This value is added to the determining salary for the contribution calculation.
Correctly identifying every element subject to contributions is therefore essential. An omission can lead to corrected social insurance filings and financial adjustments with the relevant bodies.
Exempt Amounts and Special Situations
Swiss law also provides for certain exempt amounts, so that the obligation to contribute fits specific situations.
Annual income of no more than CHF 2,500 per employer, for instance, is treated as a salary of minor importance. This is not an exemption: contributions on such salaries are levied only if the employee asks for them, which they are entitled to do. The rule also has exceptions where contributions are due from the very first franc, in private households and in a list of cultural and media sectors. That list was widened on January 1, 2026, with the addition of choirs, design companies, museums, and electronic and print media, alongside the sectors already covered such as dance, theater, orchestras, radio and television.
Specific rules also apply to people who keep working after reaching the reference retirement age.
In 2026, the employees concerned benefit from an exempt amount of CHF 1,400 per month, or CHF 16,800 per year. AVS, AI and APG contributions are then deducted only on the part of the salary above that limit. Employees may nevertheless waive this exemption and contribute on their entire income. Contributions paid after the reference age can, under certain conditions, be taken into account in a recalculation of the pension.
These working pensioners are also no longer subject to unemployment insurance, which changes the social deductions applied to their pay.
Which Rules Apply to Your Status?
AVS, AI, APG and AC contributions do not apply identically to everyone insured. Employees fall under the general regime, while self-employed workers and people not in gainful employment come under specific rules. Understanding these differences is essential to avoid errors in declaring or calculating contributions.
Employees
For employees, the employer calculates the social insurance contributions on the basis of the determining salary, deducts the employee's share directly from their pay, and remits the total amount due to the competent compensation fund.
This responsibility goes beyond payroll calculation. The company must also meet payment deadlines, produce annual statements and keep documentation that complies with legal requirements.
For companies that hire regularly, particularly in an international context, correctly qualifying each employee's status is equally essential. A person regarded as an employee under Swiss law must be affiliated to the corresponding regime and covered by the mandatory social insurance schemes.
Self-Employed Workers
Self-employed workers fall under a different regime, since they have no employer contributing to the funding of their social insurance.
They pay their AVS, AI and APG contributions in full themselves to their compensation fund.
In 2026, the maximum rate is 10.0% of income from self-employment, made up of:
- 8.1% for AVS;
- 1.4% for AI;
- 0.5% for APG.
This full rate applies as soon as annual income reaches CHF 60,500.
To support self-employed workers on more modest incomes, the law provides for a sliding scale. Where annual income falls between CHF 10,100 and CHF 60,500, the rate decreases progressively down to a minimum of 5.371%.
Below CHF 10,100 of annual income, a flat minimum contribution of CHF 530 remains due.
Unlike employees, self-employed workers do not contribute to unemployment insurance. They therefore receive no benefits from that scheme if they cease trading.
This distinction matters, particularly when it comes to social insurance contributions for freelancers and contractors weighing up self-employment against an Employer of Record (EOR) solution. The choice of status has direct consequences for social coverage and for administrative obligations.
People Not in Gainful Employment
The Swiss system rests on a principle of solidarity in which people without professional activity also take part.
Students over 20, people who have taken early retirement and certain non-working spouses must therefore contribute to AVS, AI and APG.
Their contribution is not calculated on a salary but on their asset position. The compensation funds take net wealth into account, along with income from any pensions, to determine the amount due.
In 2026, these contributions range from CHF 530 to CHF 26,500 per year.
The law does provide one important exception. Where a married person or a person in a registered partnership is not in gainful employment, they are deemed to have met their contribution obligation if their working spouse pays at least twice the annual minimum contribution.
How Do Employers Declare Social Insurance Contributions in Switzerland?
Applying the right contribution rates is only part of a company's social insurance obligations. Employers must also complete various administrative formalities in order to declare their employees correctly and pay contributions over to the competent bodies.
Affiliation to a Compensation Fund
Every company with a permanent establishment in Switzerland, or employing staff on Swiss territory, must be affiliated to an AVS compensation fund.
Depending on the situation, this may be a cantonal fund or a sector fund attached to an employers' association.
That fund is the employer's main point of contact for everything relating to AVS, AI, APG and AC contributions.
Where a new employee does not yet have an AVS number, the employer must take the necessary steps with the fund so that the person is officially registered in the Swiss social insurance system.
Correct affiliation from the point of hiring makes all subsequent payroll operations easier and limits the risk of later adjustments.
Statements and Payment of Contributions
In most companies, social insurance contributions are paid in installments throughout the year.
The frequency depends on the size of the payroll: contributions are paid quarterly where the annual wage bill does not exceed CHF 200,000, and monthly above that figure. This is set by law rather than left to the employer's choice.
At year end, an annual statement adjusts the installments already paid so that they match the remuneration actually paid out.
The employer also gives each employee a salary certificate setting out the information they need for their tax filings.
For certain very small-scale activities, notably some domestic employment, the law provides for a simplified procedure.
It allows contributions and withholding tax to be combined in a single annual declaration, subject to the remuneration ceilings set by law.
Whichever procedure applies, the quality of payroll data remains essential. An incomplete declaration or incorrect amounts can trigger audits, back contributions or administrative corrections that are sometimes costly.
Simplify Your Social Insurance Contributions with Numeriq Payroll
Calculating AVS, AI, APG and AC contributions correctly is not just a matter of applying percentages to a salary. You also have to identify the determining salary, take statutory exempt amounts into account, apply the unemployment insurance ceiling, handle the different statuses of your people and meet the compensation funds' requirements.
For many companies, these obligations represent a significant administrative burden, all the more so when headcount moves quickly or when employees are hired from abroad.
At Numeriq Payroll, we support Swiss and international companies in outsourcing their payroll management, helping you keep payroll compliant with the applicable federal and cantonal requirements.
Our multilingual team, entirely based in Switzerland, brings together more than 50 years of experience in payroll, social insurance and HR administration. We support more than 100 companies today and run payroll for more than 1,000 contractors, with an accuracy level of 99.9%.
Beyond producing payslips, we handle social insurance filings, dealings with the compensation funds, the administrative obligations tied to employing people in Switzerland, and the Employer of Record (EOR) solutions designed for foreign companies wanting to hire without setting up a local entity.
With our hands-on support and 24/7 assistance, you get a reliable partner to secure your social insurance compliance, simplify your HR processes and devote more time to growing your business.
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