Swiss social security for employee of foreign company ANobAG

I have just started working remotely for a company in Malaysia. How can I register this setup at the social security office and how are social security contributions calculated?

If you live in Switzerland but work for a company in a country with which Switzerland does not have a social security agreement, you can still register with your cantonal social security office. A special status known as ANobAG is designated to individuals in this situation because they do not normally qualify as being self-employed.

Once you register with your cantonal social security office as an employee of a company which is not obligated to make social security contributions, you will have to pay your full contributions yourself. At 10.25% of your income (as of January 2017), AnobAG social security premiums are substantially higher than the 6.25% paid by employees. That is because your foreign employer is not obliged to cover half of contributions.

On top of the 10.25% of your income which you contribute towards old-age and survivors insurance, disability insurance and loss-of-earnings insurance, you also have to pay contributions towards unemployment insurance equal to 2.2% of your salary (1% for the portion of your annual salary which exceeds a certain limit (set by individual social security offices). Additional administrative fees vary between social security offices, but will never be more than the equivalent of 5% of your social security contributions.

Example: You work for a foreign company and earn a CHF 5000 monthly salary. You can expect to pay CHF 512.50 (10.25%) every month in social security contributions plus another CHF 110 (2.2%) in monthly premiums towards unemployment insurance, plus an administrative fee as high as CHF 25.62 (5% of social security contributions). So your total monthly social security costs would come to just over CHF 648, in this example.
 

A good alternative to setting up an ANOBAG is to subscribe to a Payroll company. They can invoice your client abroad, manage your work permit, subtract all social contributions, insurances, pension plan and tax-at source, and pay you a net salary. Then you have the status of an employee without the headache of all the administration.

Remember when you choose a Payroll company to look at the net retention. Some providers have lower fees, but give a vanilla solution that doesn't necessarily optimize your income.

Do I get accident insurance from social security when I live in Switzerland but work for a company outside Switzerland? Right now, I get accident insurance from my Swiss employer, but I will begin working for a US company remotely soon. Is accident insurance included in the social security I will pay, or how does that work?

Hi there,

Accident insurance is not provided by the Swiss social security system.

When you work for a Swiss employer, your employer is required to take out and pay for occupational accident insurance which covers you during work hours. You are also required to get non-occupational accident insurance which covers you outside working hours from your employer's accident insurance provider. You have to pay the premiums for non-occupational accident insurance yourself.

When you work for a foreign employer, you have to take out accident insurance yourself. You pay the full premiums for occupational and non-occupational coverage.

Best regards from Moneyguru

If a Swiss national works for a company outside of Switzerland that does not have a legal entity in Switzerland and they register as ANOBAG, how does this impact their holiday entitlements?

Currently they have their own company set up and invoice the company but we are looking at other solutions including the payroll piece.

The one we are been asked to explore is ANOBAG as a solution. We have concerns about whether we as an employer should be paying something to Swiss Government.

What exactly would that person be losing out on if they made the switch from being an employee of their own company to being employed by us as ANOBAG? Or what would they be gaining?

Hi maria.barker,

Some of the advantages of this person being an employee of a Swiss company (his own company, in this case) are:

• They will generally have the option of participating in a Swiss occupational pension fund and covering half of contributions through the company.
• They can enroll in Swiss employer-based accident insurance which includes loss-of-income insurance. They can cover the premiums for occupational accident insurance through the company.
• They can legally claim paid holidays and public holidays as per Swiss law from their Swiss employer (their own company, in this case).
• Their company can take out paid sick leave insurance, ensuring that they can claim paid sick leave as per Swiss law.
• Depending on how the company is structured, this setup can be beneficial from a tax perspective.

The disadvantages of this setup include:

• As an executive with decision-making power over their company, they may not be entitled to claim Swiss unemployment insurance benefits if they become unemployed.

Some of the advantages of this person becoming an employee of your company and registering as ANobAG with a Swiss social security office are:

• They will be able to claim Swiss unemployment insurance benefits if they become unemployed.
• They will not have to handle the administration attached to running a company.
• This setup can be disadvantageous to the individual from a tax perspective.

The disadvantages of the ANobAG setup include:

• They cannot participate in employer-based accident insurance.
• It may be difficult for them to claim their legal employee benefits such as Swiss holiday entitlements, paid sick leave entitlements and maternity or military leave entitlements.

In both cases, the individual who is resident in Switzerland must cover their social security contributions in full out of their own pocket (or through their Swiss company).

You as an employer in a country with which Switzerland does not have a social security treaty cannot be made to contribute half of social security contributions (as is required for Swiss employers) and pension fund fund contributions. Of course, you are welcome to offer this as an employee benefit.

Your foreign company also isn't required (or eligible) to participate in Swiss pension funds, take out Swiss accident insurance or pay premiums for a Swiss child benefits insurance schemes. These things are required for employers in Switzerland, but not for employers in countries with which Switzerland has no social security treaty. Here too, you can offer similar employee benefits or increase the employee's salary to help them cover these costs.

Although all Swiss residents have the right to Swiss paid holiday and paid leave entitlements, there is no legal way that they can claim these entitlements from companies in countries with which Switzerland does not have social security agreements.

As such, the only real difference for your company as the customer in your current setup or an employer in an ANobAG setup is the way in which you are invoiced (by a company or a private individual).

The majority of the differences between the person being self-employed (running their own company) or being employed by you as ANobAG only affect that individual.

How big an impact a switch may have on the individual depends on what kind of company they currently operate in Switzerland and how the company and their employment is set up.

Best regards from Moneyguru

Hi All

Thank you in advance for your help, it's very much appreciated. I also apologize for all the questions.

I am considering taking a new permanent contract for a previous employer-based in Australia (their head office is in Canada). They have spoken to a payroll company multiple times and 2 options seem to exist 1) an ANobAG arrangement 2) they set up a legal entity here and use a payroll company (unlikely as we may not be here from December onwards). I was under the impression that it could just be done with a Payroll company but the global payroll company they have been talking to for many months now has said that these are the only options.

I suspect it will be an ANobAG but I have a few questions. I'm nervous after all the things I have read. I wouldn't even be considering it if we weren't planning on leaving Switzerland before the end of the year.

1. Can it be an Australian contract or will it have to be a Swiss contract? I don't think either is a problem although I don't know where I would get a Swiss contract from (and in English).
2. I know I would have to cover all AHV/IV/EO contributions. Is this 10.55% or do I need to double it?
3. I understand I would also have to pay the following Unemployment insurance 2.02%, Family allowance (variable) and Administrative fees (variable)? Am I correct in thinking that these normally be paid by the employer or am I liable for some of them?
4. Is there anything else I am missing (obviously tax)?
5. Are there requirements to pay into a pension (I appreciate there would be under Australian law if it was an Australian contract - so Swiss contract maybe easier)?
6. Is an accountant needed for this or is it relatively easy to put together?
7. When we leave Switzerland does the employer have to do anything or just me?
8. I already have emergency insurance through my health insurance company, would I need to change anything? I was a full time dad prior to this so haven't worked here before.
9. Is there anything else I should know?
10. Would the employer transfer me my entire pay and I just sort everything out?

Is there anything else I am missing (obviously tax)? I'm guessing I am trying to understand what 7000CHF (after tax) looks like after everything is paid. Is the employer responsible for anything?

I thank you so much for taking the time to read this. I have had very little sleep last night thinking about it. Apologizes again for length, I have done a lot of searching but I need helping to put it all together.

Cheers

Matt

Hi Matt,

I worked ANobAG for more than 2 years, so I have first-hand experience. On the whole, there is not a whole lot to it on the Swiss side.

You go to your local social security office (in Zürich this is the SVA) and register as ANobAG. You fill out a form and state your anticipated annual income. This income will serve as the basis for your social security contributions. You give them a copy of your foreign employment contract from your foreign employer (if it were Swiss you would not be ANobAG). You should receive confirmation of your ANobAG registration pretty quickly. I recall it taking a week or 2.

You will receive bills from the social security office (I believe I received these quarterly). You get just one bill for all of your compulsory insurance payments collectively, along with a statement detailing contributions, so it's pretty simple and straightforward.

I am pretty sure that the contributions for employed individuals apply (AHV: 8.7%, IV: 1.4%, EO 0.45%). You pay these contributions in full yourself. You also pay unemployment insurance yourself (2.2%, 1% on the portion above 148'201 francs). As you correctly stated, you pay the child benefits insurance premiums yourself as well.

You pay the social security office's fee yourself (at the SVA, this is equal to 5% of total contributions).

You can sign up for a pension plan from the Substitute Occupational Benefit Institution. In fact, I think you are legally required to, but I could be wrong. The contribution ranges between 10% and 20% of your salary, depending on your age. You pay the full contribution yourself.

The big negative of working ANobAG is that you cover contributions in full yourself. Of course, your foreign employer can adjust your salary to reflect this. In total, expect to pay the equivalent of around 25% of your salary in insurance and pension contributions.

If you leave Switzerland for Australia (or another non-EFTA/EU country), you can cash out the pension fund benefits or store them with a Swiss vested benefits foundation. If you are Australian, you can claim an AHV pension when you retire because of the bilateral social security treaty.

You have more tax admin work than a regular job for a Swiss employer in that you have to submit a tax return instead of having withholding tax taken right off your salary. Depending on your situation, this could be good or bad from a tax perspective.

Other than that, admin is limited to checking the statements you receive from the social security office and paying the bills.

I can't speak to Australian law, so I'm not sure whether your employer would also have to deduct pension or social security contributions on that end.

I hope this helps

Thank you for your reply. That is super helpful.

This has been a very long ongoing process as I work for this company already and are being killed by double tax etc etc. It's all legal what is happening but it just cannot go on. Between the double tax (which I will eventually get back from the ATO in Australia) and accountants fees and double social security, I'm only getting about 30% of my salary which isn't huge anyway. The Tax office in Switzerland has been fantastic but we need a long term solution that everyone is happy with, so I don't quit my job which I love.

There are agreements between Australia and Switzerland as we have used them in other ways in the past. Being on an Australian contract means that superannuation is required to be paid in Australia, so I think my accountant said that, that cancels out the need for a pension (2nd Pillar) here. My understanding is that AHV is first pillar which is the 10.55% (I think that's the percentage it would be now). I have an email somewhere confirming that.

It really sounds like there's not much for my employer to do. Do they even issue a payslip? Do they just transfer my gross salary to me and I sort it all out? When I leave Switzerland what happens?

When I register, does the registration list the employer (the contract would obviously be in English as well)? Do I invoice them for my salary (it is fixed per month)?

My employer will adjust salary accordingly to cover employee contributions, that's not an issue either.

Sorry. Questions questions.

They have so many questions and the company they were dealing with isn't being very helpful. I could technically do this all myself right? My company will never be sent a bill is that correct?

As for tax return we have to submit one anyway, so again not an issue.

I was just concerned about the ANobAG because of some of the negative things I had read.

Thanks again for your help, it has been so so helpful.

Ignoring what I wrote above and say in theory it stops getting paid in Australia... Am I liable for Pillar 2 here and if so what is the percent? Is Pillar 2 BVG?

Seems the Pillar 2 BVG requirement only applies if your employer is in an EU/EFTA country. I initially understood that the Pillar 2 requirement applied to all countries with social security treaties, but it's just EU/EFTA. The exemption for workers who already contribute to a pension fund in their employer's domicile also apparently only applies to the EU/EFTA. With your employer in Australia, you aren't required to sign up for a Pillar 2 BVG pension fund.

I was employed by a Singapore company and did not contribute to the pillar 2 BVG. That was a good thing, as the cost of paying the full contributions would have taken a big bite out of my salary on top of the cost of paying the full AHV/IV contributions.

You can still voluntarily sign up with the Substitute Occupational Benefits Institution if you want to. If not, you can take advantage of the higher Pillar 3a limit for workers without a Pillar 2 BVG pension fund (20% of your income, up to the maximum annual limit). You don't have to do either of these.

To answer your question re the AHV/IV: The combined premiums for AHV, IV and EO (maternity leave) insurances come to 10.55%. You pay the social security office's admin fee on top (at SVA in Zurich, this is 5% of your contributions, so 5% of 10.55% of your income). You get this all as one bill, with a statement breaking down individual costs. It's easy and straightforward.

Regarding taxes, you will need to submit Swiss-style annual salary statements with your Swiss tax return. In my case, I prepared these for my Singapore employer and had them sign them. This was much less hassle than trying to get the company's accountant to prepare them. You can find the templates online. The currency exchange rates applicable for declaring your taxable income are shown on tax office websites or you can get them from your local tax office.

So the bottom line is:
1. You register as ANobAG at your cantonal social security office. Provide a copy of your employment contract and state your salary in Swiss francs.
2. You make sure the accident insurance rider from your compulsory health insurance is active. You've already done this, so no hassle here.
3. You pay the bills your get from the social security office.
4. You prepare Swiss-style annual salary statements using the official end-of-year exchange rate from the tax office and have your employer sign them. You submit these with your tax return.

That's all there is to working ANobAG. Your Australian employer does not have to pay any contributions in Switzerland at all. They just send over your full salary (minus any Australian deductions). You pay the Swiss social security bills and tax bills yourself. Easy.

You can obviously decide if you want to get private loss of income insurance. The accident coverage you get with compulsory health insurance doesn't cover loss of income like the accident insurance from Swiss employers does. Of course, you don't have to do this.

Hope this helps

You are amazing. Thank you for taking the time to reply and helping me :)

Dear Community,

From the previous comments, I understand that you are very helpful! Maybe you could also help me?

I am considering taking a new permanent contract in Basel for a previous employer-based in Germany (I am currently working in Brussel but I want to live in Basel and do Home-Office + regular travels to Germany and to Brussels).

I tried to sum up the previous discussions and understand that the three following options exists:

1. setting up an ANobAG

On sept. 4^th 2019, Moneyguru wrote, that with the ANoBAG, “it may be difficult […] to claim […] legal employee benefits such as Swiss holiday entitlements, paid sick leave entitlements and maternity […] leave entitlements”.

Could you explain why? Who is supposed to pay for maternity paid leave for example: the German or the swiss social security system?

2. setting up my own company // being a self-employed and invoicing the German company I would be working for. But would it be legal to have a company if I only have that one client in Germany?

3. subscribe to a payroll system? Does this require my German company to set up a legal entity in Switzerland? Do you have an idea how much they usually take (in % or a fee?).

It would be amazing if you could help me on those questions!

Best regards,

Anne

Hi Anne,

Thank you for using moneyland.ch. Please find answers to your questions here:

1. Employee of a foreign company

The Swiss ANobAG social security status only applies to residents of Switzerland employed by employers in countries which do not have a relevant social security agreement with Switzerland covering contributions. Because Switzerland has relevant social security agreements with the EU and EFTA, it is not possible to register as ANobAG with an employer in an EU or EFTA member country.

If you are employed by a company in an EU or EFTA country, you are classified as a cross-border worker and are subject to the social security system of the EU/EFTA country in which your employer is domiciled. This means that if you live in Switzerland but work for an employer in Germany, you must subscribe to German social security and not to Swiss social security. You will also claim German social security benefits and not Swiss benefits.

However, as a resident of Switzerland working for a German employer, it is possible to voluntarily subscribe to the Swiss social security system as well. In this case, you pay contributions in both countries.

If you work in Switzerland part-time (min. 25% of your total employment) in addition to your foreign employment, you are only subject to Swiss social security contributions and are freed from your obligation to contribute in your employer's country of domicile.

Note: To answer your questions regarding the ANobAG status, a foreign employer is not governed by Swiss law. Swiss employee benefits which are covered by employers (paid sick leave and paid holidays) are determined by the laws of your employer's country of domicile and your rights in that country as a non-resident employee.

As an ANobAG employee, you are entitled to Swiss military and maternity leave compensation (EO), but the claims process is more complicated than it is for employees of Swiss companies.

In any case, the ANobAG status does not apply to you as an employee of an EU/EFTA company. Unless you choose to register as self-employed, open a Swiss company or use a Swiss payroll company, you will be classified as a cross-border worker and must subscribe to social security in your EU/EFTA country of employment.

2. Self-employed

In order to obtain the self-employed social security status, you are normally required to show that you have at least 2 customers (employers, in your case). However, exceptions can be made at the discretion of the social security office.

As a self-employed individual, you pay social security contributions in full yourself (as with ANobAG). The disadvantages are similar to those of the ANobAG status (no paid sick leave or paid holidays), with the added disadvantage that you cannot subscribe to social unemployment insurance.

Registering as self-employed, if you can, is simpler than opening a company.

3. Employed by your own Swiss company

If you open certain categories of Swiss companies (a GmbH or AG, for example), your company can hire you as an employee. The main disadvantages of this model are that you may pay tax twice on the same income (as business income and then again as personal income), and that it involves a fair amount of administrative work. Another disadvantage is that as an executive employee, you will have to contribute to social unemployment insurance but will not be able to claim benefits.

The main advantage is that you will be entitled to all other employee benefits, such as occupational accident insurance. Depending on your personal situation, there may also be tax advantages. If you feel that opening a Swiss company could be more suitable than working as a cross-border worker and paying social security contributions in Germany, consider consulting a specialized tax advisor for advice on whether opening a company is financially beneficial and which canton is most suitable.

4. Employed by a Swiss payroll company

Subscribing to a payroll company in Switzerland is simpler than founding your own company. In this arrangement, you are legally employed by the local payroll company. The payroll company collects your salary from your foreign employer, deducts compulsory contributions and paid holiday entitlements in keeping with Swiss law, and pays out a net salary. Because you are not self-employed nor an executive employee (as is the case when you open your own company), you benefit from social unemployment insurance and occupational accident insurance.

The disadvantage of payroll companies is that they generally deal with employers rather than individual employees. This means that typically, your German employer will have to open an account with the Swiss payroll company. If you are the only employee of that company who resides in Switzerland, your employer may be less likely to assist you in this way. The cost of payroll companies also varies depending on the number of employees per account. This means the cost can be negligible if your German employer has many employees in Switzerland, or fairly high if you are the only one.

Consider inquiring with your employer as to the option of using a Swiss payroll service.

Best regards from Moneyguru

Dear Moneyguru, 

Thank you so much for your precious help!

The ANOBAG Status (1)  seems complicated with regards to the law applicable…

The situation (4) seems indeed the easiest way to work in Switzerland for a German company. I understand that it might be more expensive I am the only employee, but I could also support part of the cost.

However, do I understand it right that there would be no more contractual relationship between me and the German company? Would the German company be entitled to offer me more holidays than provided by swiss law for example? What happens for example if they terminate the contract illegally?

Thanks again for your help!!

Best regards,

Anne

Hi Anne,

That depends on what kind of payroll company your employer chooses to contract.

A PEO-type payroll company will handle the administration related to your payroll and legal compliance in Switzerland, but the contract remains between you and your employer.

If you use a Swiss employer of record (EOR) service, on the other hand, the EOR becomes your legal employer in Switzerland. The contract, in this case, is between you and the EOR, and is subject to Swiss laws regarding paid holiday and sick leave, and contract termination.

Best regards from Moneyguru.

Thanks a lot to all people who posted here, this post is amazing and really helped me confirming my understanding of the ANobAG structure.

In a couple of months I'll also become an ANobAG employee for a USA company. I have few questions I really appreciate your opinion about:

1- I don't speak German and I'm living in the Zurich Kanton, how much difficult is to register as ANobAG with the SVA in Zurich? I called them once on the phone and they were very kind and useful, they answered all my questions in English but their site and all the documentation are in German only. Will I need to pay for some professional support to help me with the registration or you believe I'd be able to manage it myself with English + some Google translate to fill in some forms?

2- Once I'm registered as ANobAG, is there any specific service I should pay for beside what the SVA will charge me? For instance, should I pay a Payroll company to produce monthly payslips for myself (is it required?) and the end of the year salary statement (i.e. Lohnausweis) or it's something I can manage myself?

3- BVG and KTG are optional for me as my employer is not in EU/EFTA. The accident insurance (UVG) is mandatory. In one of the post above was suggested to enable the accident insurance with my health insurance. This is 10x cheaper than signing any UVG with private insurance companies. Accordingly to some sources, the accident insurance offered by health insurance companies is not enough to comply with the UVG requirement. Is it correct? I work in the IT and I work from my homeplace, I'm not doing any high risk activity, why should I sign a multiple thousands CHF insurance? Do I understand the requirement correctly?

Thanks a lot for any help!

Hi sauzer,

1. The easiest is to make an appointment at the SVA and go complete the registration in person. The staff there generally speak enough English to help you with the process. You shouldn’t need any extra support. It’s pretty straightforward, such as entering your annual salary, etc.
2. You do not need a payroll company. If you used one, then you would be locally employed (by the payroll company) and not ANobAG. Just send your foreign employer a template for a Swiss salary statement so they can send them to you. The only one you are likely to need is the year-end statement (for taxes). In my case, I prepared the statement and emailed it to my employer for inspection/signing. They then emailed it back. It’s easy to handle this yourself.
3. You have to get accident insurance which meets UVG standards. That means it must provide the obligatory coverage for employees that you would get from a Swiss employer – including coverage for medical expenses and loss of income. The situation is different if you are self-employed (the health insurance accident cover is sufficient), but as ANobAG you need to sign up for a UVG insurance. It may have been different in the past, but this is the current requirement. It is dreadfully expensive, but you are covered against accidents in and out of the workplace, and you get 80% of your salary if an accident leaves you unable to work for a time. You also get a lifelong pension if you are disabled in an accident. Either way, it's required so you just have to bite the bullet :). You could ask your foreign employer about covering all or part of this as an employee benefit.

Dear Community,

I have a rather complicated situation.

I live in Switzerland and have B permit (Familiennachzug) with work permission. And I am going to work for a company which is based in Cyprus, but I will not be employed, there will be just a service agreement.

My salary will be too low (less than minimal salary in Switzerland), so I won't be able to become employed in a payroll (umbrella) company because of that.

Is it possible to open ANobAG in Switzerland for me? Does it matter that I am not an employee, but a servise provider?

If it is not possible, do I have any other options? As far as I understood I can't become self-employed as well if I have only one client.

ANobAG only applies if your employer is not in an EFTA or EU country.

If you work remotely for a company in Cyprus (an EU country), then your employer has to sign up at the Swiss social security office and pay the required employer and employee contributions. They can ask you to handle the administration on this side for them, but they have to pay their half of your AHV and pension fund, your accident, parental leave, and child benefits insurance premiums, etc.

If you are not an employee, but just a freelancer, things become complicated, because if you work for just one company, than you would be considered an employee of that company under Swiss social security.

There is a 2000-franc annual exemption for the AHV, so if you earn less than that every year freelancing, that would be considered side income and wouldn't affect your social security status. But if it's more than that, then your EU employer is required to take you on as an employee and take care of contributions (or use a Swiss payroll company for that).

Another solution is to find a second company to freelance for. If you have at least 2 clients, than you can apply for the self-employed social security status.

Well, this is quite sad... I'll try to come up with something then.

Anyway, smartfreddy, thank you very much for your response.