Special features of life in Switzerland and differences to other countries
Are you planning to move to Switzerland, and want to know what to expect? There are a few special features of life in Switzerland that make it different to other countries. Here’s a selection.
22.09.2023
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1. The Swiss pension system
In Switzerland, old-age provision consists of the “three-pillar system”, which includes state, occupational and private pensions. In Switzerland, everyone has to pay into the state pension, also known as the first pillar.
The occupational pension, or second pillar, is compulsory for all employees in Switzerland.
Save on tax with the third pillar
The third pillar is voluntary for all. However, you can deduct pillar 3a contributions from your annual taxable income. This means you can save on taxes.
2. Working in Switzerland
Generally, immigrants from EU/EFTA member states do not require a work permit. However, there are a few exceptions: transitional provisions apply for job seekers from Croatia. Citizens of the United Kingdom are subject to quotas.
3. Getting a residence permit
EU and EFTA citizens are entitled to a residence permit provided that they work in Switzerland and hold an employment contract. Exception: Croatia. Quite often, the employer will take care of the necessary formalities. There are different types of residence permits:
L permit: short-stay permit, valid for up to one year
B permit: residence permit, valid for up to five years
C permit: permanent residence permit, valid for an unlimited period
Comparis has complied the important information you need to know about residence permits in Switzerland.
Good to know: foreigners may travel in Switzerland as tourists without a special permit for three months. If you are looking for a job, you can usually apply for an L permit after these three months have lapsed. However, you are then not entitled to any social insurance benefits.
4. The Swiss cantons and their differences
Since the Swiss Federal State was founded in 1848, federalism has been one of its basic principles. This is why Switzerland’s 26 federal states, known as cantons, are very sovereign. For instance, each canton has its own constitution and authorities.
Federalism is visible everywhere. This fact, along with the attitude of some inhabitants of certain cantons towards those of other cantons, is frequently termed “Kantönligeist” (a slightly derogatory term for “cantonal partisanship”) by German-speaking Swiss people.
Incidentally, each canton or region of a canton has its own dialect. Read more on the subject in this article: Learn Swiss German.
Other differences between the cantons
Keep in mind the following factors when choosing your new place to live:
How high tax or withholding tax is.
How high health insurance premiums are.
Cost of living, in particular housing costs.
Provisions governing the import of fighting dogs.
Tip: our free rental price report shows how much rental prices vary from canton to canton (in German).
5. Working hours and statutory benefits in Switzerland
These four social benefits are stipulated by law:
Paid holidays (min. 4 weeks per year)
Paid public holidays (varies from canton to canton)
Paid sick leave
Family allowances
The 13th month salary is not required by law. Some companies do offer this, however.
Accident and illness insurance
Employees usually enjoy good insurance cover in Switzerland. Anyone who is employed for more than eight hours per week with a single employer is automatically insured against accidents by this employer (Accident Insurance Act – UVG).
Employers can also voluntarily choose to insure their employees against absence due to illness. There is normally a cap of a few weeks on the period of sick leave for which salary is paid, so many collective employment agreements require daily benefits insurance to be taken out.
Other safeguards
Employers also take care of some other social security benefits that are deducted directly from the salary and transferred to an insurance, specifically:
Retirement and disability provision AHV/IV/EO; deducted at 5.15% of salary.
Unemployment insurance ALV; deducted at 1.1% of salary.
Occupational pension BVG; deducted at between 7% and 18% of salary, depending on age and gender.
Working hours
On average, Swiss employees work more hours per year than those in neighbouring countries such as Germany or Austria. Read more about working in Switzerland with Comparis.
6. Withholding tax for foreigners
All foreign workers without residence permit C are subject to withholding tax. This means that the amounts payable to the federal state, your canton and your municipality are deducted directly from your salary by your employer and transferred to the tax authorities. The figure varies between cantons.
More information: withholding tax in Switzerland
7. The fabled Swiss bank account
Any adult can open a bank account in Switzerland. This is now also possible online at various banks.
The truly distinctive feature of a Swiss bank account remains bank-client confidentiality, or “banking secrecy”. However, this has been increasingly relaxed in recent years.
Good to know: unlike in other countries, overdraft facilities are not automatically available in Switzerland. You can arrange for an overdraft to be set up with your bank. However, this is normally only worth doing if you plan to go overdrawn in the near term.
8. Salary statements in Switzerland
salary statement certifies all salary components and expenses. This salary statement is also used as a pension statement. All employers are required to provide their employees with a salary statement at the end of the year.
For employees subject to withholding tax, it is shown under item 12 of your salary statement. To help you find your way around your salary statement, here’s a quick explanation of the key items:
1. Salary/pension: all amounts paid by your employer that are not listed separately under items 2 to 7.
8. Total gross salary/pension: the total of all income shown under items 1 to 7, before deduction of social security contributions, withholding tax, etc.
9. AHV/IV/EO/ALV/NBUV contributions: the precise amount of all social security deductions, e.g. for AHV (old age and survivors’ insurance) and ALV (mandatory unemployment insurance).
10. Occupational pension: deduction paid to tax-exempt collective occupational pension schemes (2nd pillar).
11. Net salary: the relevant net salary calculated by subtracting all the deductions made (items 9 and 10) from the gross salary (item 8).
13. Expenses received: reimbursement by the employer of all expenses incurred by the employee in the course of their work (e.g. business travel) that are not included in the gross salary.
9. The vignette for motorways
To ride a motorcycle or drive a car on Swiss motorways, you need a vignette. This is a small sticker that is attached to the windshield. It proves that the annual fee for using the motorways has been paid.
Since 2023, there is also a digital option available in the form of the e-vignette. The benefit is that you don’t have to stick it to and remove it from your windscreen.
10. Renting an apartment in Switzerland
When you rent an apartment in Switzerland, it usually comes well equipped. In most cases, all large electrical appliances such as refrigerator, washing machine and stove are already provided. This also requires tenants to be careful. It is not enough, for example, to leave a rental property only “swept clean” when moving out. Comparis tells you more info about living in Switzerland.
Important: most landlords require you to pay a deposit. It usually equates to two to three months worth of rent.
This article was first published on 17.12.2021
