Social security in Switzerland offers comprehensive protection. It protects people against risks such as old age, illness, accident, disability and unemployment – and it is a complex network of different insurances so that people can receive support even in difficult times.

Key Information in brief:

• The Swiss social security system isa comprehensive system that offers protection in various life situations. AHV, IV, EO and ALV are central pillars of the system.
• Contributions are made by employees, employers and the state. Benefits include pensions, disability insurance, maternity compensation, and unemployment benefits.


The pillars of the social security system

The Swiss social security system is based around several pillars:

1. Old-age and survivors’ insurance (Alters- und Hinterlassenenversicherung, AHV): AHV is the heart of the social security system. It pays pensions to people who have reached retirement age – as well as paying survivors’ pensions to widows, widowers and orphans. Contributions are paid jointly by employees and employers. Self-employed and economically inactive people also have to pay contributions.
2. Disability insurance (Invalidenversicherung, IV): IV supports people who are permanently incapacitated for work due to illness or an accident. It pays a pension for people who are unable to rejoin the labor market. Here, too, both employees and employers pay into the insurance plan.
3. Earnings Compensation (Erwerbsersatzordnung, EO): EO offers financial support for earnings lost due to military service, civilian service and maternity. An important component is the maternity allowance, which guarantees mothers a portion of their income during their maternity leave.
4. Unemployment insurance (Arbeitslosenversicherung, ALV): ALV pays an income if you lose your job. It supports people who are unemployed – by replacing part of their previous salary, as long as they are actively looking for a new job.

Financing and contributions

The social security system is financed by contributions from employees and employers as well as by taxes. In some areas, such as AHV and IV, the federal government and the cantons also pay contributions. Contribution rates vary depending on the category of insurance, but generally they are calculated as a percentage of income.
For employees, this means that a certain percentage of their income automatically flows into the social security system. Employers usually contribute the same percentage. These contributions finance the various services that the system offers.

Services and entitlement

Social security benefits are diverse and depend on various factors, such as how long one has been paying contributions, and one’s income. Here are some of the most important benefits:

• AHV pensions: The level of old-age pension depends on the number of years one has been paying in, and one’s average income. Those who work longer and earn more will receive a higher pension.
• Disability pensions: These are granted if a person is permanently unable to work. The amount of the pension depends on the degree of their disability and their previous income.
• Maternity compensation: During maternity leave, mothers receive 80% of their previous income for a maximum of 14 weeks.
• Unemployment benefit: Unemployed people receive 70-80% of their last salary for a certain period of time, depending on the duration of their previous employment and their age.

Important information for foreigners who are starting a company 
in Switzerland

Foreigners who want to set up a company in Switzerland must comply with some special requirements and regulations:

1. Social security contributions: Foreigners are also obliged to pay social security contributions as company founders. This applies both to their own contributions as self-employed persons and to the contributions they have to pay for their employees. Relevant social insurance plans include AHV, IV, EO and ALV.
2. Obligation to report and register: Company founders must register themselves and their employees with the responsible social security institutions. This includes old-age and survivors’ insurance (AHV), disability insurance (IV), earnings compensation (EO) and unemployment insurance (ALV). In addition, contributions to accident insurance and occupational pensions (pension fund) are required where people are employed.
3. Legal form and social security: The chosen legal form of the company (sole proprietorship, GmbH, AG) influences how social security contributions are calculated and paid. In the case of a GmbH or AG, for example, the business owners must also pay social security contributions as employees of the company.
4. Advice and support: It is a good idea to seek advice from a Swiss social security expert. Especially for foreigners who are not yet familiar with local conditions, professional support can be useful to meet all legal requirements and minimize financial risks.

Final remarks

The Swiss social security system is complex, but offers comprehensive protection for all situations. It ensures that people are financially secure even in difficult times and can receive the support they require. Anyone who works or lives in Switzerland should be aware of the various insurance companies and the services they offer, in order to be well prepared for whatever may happen.