Yes, as a sole proprietorship you are allowed to hire employees. There is no law prohibiting sole proprietors from employing staff. However, as soon as you take on personnel, a number of obligations come into play: employment contracts, social insurance, accident insurance, payroll and more. In this article we show you step by step what you need to consider -- and what costs to expect.
01Step-by-Step: The Process
Before your new employee starts their first working day, you need to take care of a few things. Here is the complete process:
A written employment contract is not strictly mandatory, but strongly recommended. It covers salary, working hours, notice period, holiday entitlement and other conditions. The legal basis can be found in the Swiss Code of Obligations (OR Art. 320ff).
Register as an employer with your cantonal OASI compensation fund (Ausgleichskasse) BEFORE the first working day. You will receive an employer account number and must settle social insurance contributions on a quarterly or monthly basis going forward.
Occupational accident insurance (BU) is mandatory for all employees. You must register your staff with a UVG insurer (e.g. Suva or a private insurer). The premium is borne 100% by you as the employer. Our overview of insurance for the self-employed explains which other insurances are relevant.
From an annual salary of CHF 22,680 (2026 entry threshold), you are obliged to enrol your employees in an occupational pension fund (BVG). Find a collective or joint foundation for affiliation.
If you employ foreign workers without a permanent residence permit (C permit), you must deduct withholding tax directly from their salary and remit it to the cantonal tax office. Rates vary by canton.
Set up a system for monthly payroll. It must show gross salary, all deductions (OASI, unemployment insurance, accident insurance, pension fund, withholding tax if applicable) and net salary. Every employee is entitled to a detailed payslip.
02Social Insurance Contributions at a Glance
As an employer you share the social insurance contributions with your employees. Details on contribution rates can be found in our article on OASI contributions. Here are the key contributions at a glance:
| Contribution | Total rate | Employer share | Employee share |
|---|---|---|---|
| OASI/DI/IC (AHV/IV/EO) | 10.6% | 5.3% | 5.3% |
| Unemployment (ALV) | 2.2% | 1.1% | 1.1% |
| Accident ins. (BU) | varies by industry | 100% employer | – |
| Accident ins. (NBU) | varies by insurer | – | 100% employee* |
| Pension fund (BVG) | varies by fund/age | min. 50% | max. 50% |
| Family allowances (FAK) | varies by canton | 100% employer | – |
*Non-occupational accident insurance is mandatory from 8 hours per week with the same employer. Total employer burden: approx. 6.4% + accident insurance + pension fund + family allowances — expect 12–15% on top of the gross salary. How your own income as the owner works is explained in our article on salary as a sole proprietor.
033 Options for Payroll
1. Simplified settlement procedure
For salaries up to CHF 22,050 per year per employee, the simplified settlement procedure is available. OASI, unemployment insurance, accident insurance and withholding tax are all settled in a single step via the compensation fund. Ideal for mini-jobs, temporary helpers and small workloads.
2. Do it yourself
You use payroll software, calculate the monthly deductions yourself and report contributions to the compensation fund on a quarterly basis. This requires some familiarisation, but is perfectly feasible for 1–3 employees.
3. Hire a fiduciary
You outsource payroll to a fiduciary (Treuhänder). Costs are around CHF 30–50 per payslip. This is especially worthwhile with several employees or if you prefer not to handle the details yourself.