As soon as you employ staff, it comes around every month: payroll. AHV, ALV, accident insurance, pension fund, possibly withholding tax — and salary certificates at year-end. Many self-employed people and SMEs face the same question: calculate wages yourself, use payroll software, or outsource payroll entirely? In this article we compare the three options honestly — with costs, effort and the typical pitfalls.
01What payroll actually involves
Before you decide, it helps to look at the real scope. Payroll is more than «gross salary minus deductions»:
- Monthly: a payslip per person with all deductions (AHV/IV/EO, ALV, accident insurance, pension fund, withholding tax where applicable), payment, payslip delivery to employees
- On changes: registering hires and departures, updating workload and salary changes, illness and accident notifications, maternity benefits
- Periodically: settling contributions with the compensation office (monthly or quarterly), withholding tax with the cantonal tax office
- Annually: salary certificates for all employees, annual declarations to AHV, accident insurer and pension fund, adopting new contribution rates and thresholds
- Depending on the industry: collective agreement (GAV) rules such as minimum wages, 13th month salary, holiday and night supplements (e.g. L-GAV in hospitality or LMV in construction)
Our guide on hiring employees as a sole proprietorship covers how to register as an employer in the first place. Here we tackle the follow-up question: who handles all of this every month?
02Option 1: Do it yourself (Excel or by hand)
The cheapest option on paper — and the most error-prone in practice. For a single casual employee with a small workload it can work, especially with the simplified settlement procedure: for salaries up to CHF 22,050 per year and person, you settle AHV, ALV, accident insurance and withholding tax in one step directly with the compensation office.
Beyond that, Excel quickly becomes a liability. The typical pitfalls:
- Contribution rates and thresholds change almost every year (pension entry threshold, coordination deduction, ALV limits) — old templates silently keep calculating incorrectly
- Holiday compensation for hourly wages (8.33% for four, 10.64% for five weeks of holiday) is often forgotten or reported incorrectly
- Withholding tax rates differ by canton and change annually
- The 13th month salary must be accrued proportionally and settled correctly
- Errors often only surface during the AHV audit — with back payments due for several years
03Option 2: Payroll software — run payroll online yourself
The middle path: you stay in control, but payroll software does the calculating. Modern solutions compute all deductions automatically, generate payslips and salary certificates, and transmit the annual declarations electronically via the Swissdec standard (ELM) to the compensation office, insurers and tax authorities. That removes exactly the part that goes wrong with manual work.
Swiss payroll solutions for small teams typically cost CHF 10–20 per employee per month. Our partner payrollnow, for example, offers its payroll software for CHF 12 per employee per month — with an approach built for non-specialists: you record events («salary increase from March», «departure at the end of the month»), and the calculations and notifications happen automatically. No payroll expertise required, and your employees see their payslips directly in an app.
Who is this for? Companies with roughly 1 to 20 employees that want control and low costs and are happy to record hires and departures themselves. In other words: most sole proprietorships and small companies with their first employees.
04Option 3: Outsource payroll
With outsourcing you hand payroll over completely: an external provider produces the payslips, registers hires and departures, settles with the compensation office, accident insurer, pension fund and tax authorities, and handles special cases such as daily sickness allowance or accident claims. You only supply the changes — the provider does the rest.
There are two classic places to go: your fiduciary (typically around CHF 30–50 per payslip, ideal if they already do your bookkeeping) and specialised payroll providers with flat rates per employee. At payrollnow, payroll outsourcing costs CHF 25 per employee per month (from 25 employees) — including collective agreement handling for industries such as hospitality, construction or staffing. A practical detail: software and outsourcing run on the same platform, so you can start small with the software and switch later without migrating.
Outsourcing payroll pays off especially when your business grows, a collective agreement with supplements and minimum wages applies, or simply nobody on the team has time for payroll administration. A side benefit many underestimate: salary data is sensitive — with an external provider, nobody on the team sees what the others earn.
05Decision guide: which option fits you?
| Your situation | Recommendation | Cost (guideline) |
|---|---|---|
| 1 casual employee, salary below CHF 22,050/year | Simplified settlement procedure via the compensation office | approx. CHF 0 |
| 1–20 employees, you want control | Payroll software (self-service) | approx. CHF 10–20 per employee/month |
| Your fiduciary already does your bookkeeping | Add payroll to the fiduciary mandate | approx. CHF 30–50 per payslip |
| From approx. 25 employees or a GAV industry | Payroll outsourcing with a specialist | approx. CHF 25 per employee/month |
Important: the options are not mutually exclusive. Many companies start with payroll software and outsource later as the team grows — or bring in their fiduciary just for year-end work (salary certificates, declarations).