AHV (Old-Age and Survivors Insurance)
AHV (Alters- und Hinterlassenenversicherung) is Switzerland's mandatory state pension system. As an employer, you deduct 5.15% from each employee's gross salary and contribute an equal 5.15% yourself. You remit both monthly or quarterly to the cantonal collection office (Ausgleichskasse).
AHV is the first pillar of Swiss retirement security, funded by payroll contributions. Every employee earning above CHF 884 annually must be enrolled. You cannot opt out or negotiate the rate—it is set by federal law and indexed yearly.
AHV contributions are mandatory for all employees working in Switzerland, including those under 21 or over 65 (with specific exceptions). Self-employed persons and foreign workers on short-term permits have different rules depending on their canton and employment status.
When AHV comes up
AHV registration happens when you hire your first employee. You must register with your cantonal Ausgleichskasse within 5 days of their start date. Failure to register triggers fines and back-contribution demands from cantonal authorities.
You will encounter AHV every payroll cycle. The deduction appears on the pay slip, and you report contributions quarterly or monthly depending on your canton's rules. Year-end reconciliation (Jahresmeldung) must be submitted by 28 February following the calendar year.
- AHV is deducted from gross salary before income tax, reducing an employee's net pay
- Your matching contribution is a business expense, not deducted from the employee's salary
- Contributions apply to all forms of compensation: wages, bonuses, expense reimbursements above a threshold
- Part-time and Pensum-based roles are treated the same—contribution thresholds apply to annual earnings, not hours
- Registration is free; contribution rates are identical across all cantons
- Non-Swiss citizens with valid work permits pay AHV the same as Swiss employees
Your obligation as an employer
You must register each employee within 5 days and deduct contributions from every pay period. The current rate is 5.15% employee + 5.15% employer on gross salary above CHF 884 per year. Remit to your Ausgleichskasse on the schedule your canton prescribes (monthly or quarterly).
Keep detailed payroll records showing gross salary, AHV deduction, and your contribution for at least 10 years. The Swiss law on social insurance (AHVG) and cantonal implementation rules require this documentation for audits and employee disputes.
- Deduct AHV before calculating income tax (Quellensteuer applies to non-residents only)
- Do not negotiate or reduce AHV rates for any employee—federal law sets the rate uniformly
- If an employee earns below CHF 884 annually, no AHV contribution is required (rare in SMEs)
- Foreign workers on L, B, or C permits pay full AHV; rules differ for cross-border and temporary permits
- Failure to remit on time incurs interest charges and potential prosecution for fraud
- Your cantonal Ausgleichskasse provides registration forms, rate tables, and reporting deadlines
Most common mistake
The biggest error is deducting AHV from gross salary and then failing to remit the employer share on time. Employers often treat AHV like a voluntary benefit or assume they can delay payment if cash flow is tight. AHV is not discretionary—it is a legal debt, and late payments trigger compound interest and penalties.
A second frequent mistake is registering late or incompletely. Some founders delay registering a new hire thinking AHV applies only after 90 days or only if the role is permanent. This is wrong: AHV is due from day one of employment, and the registration deadline is strict.
- Never mix AHV deductions with other deductions or withholding—keep it separate on payroll records
- Do not assume that part-time or temporary employees are exempt; AHV applies to all employees above the threshold
- Do not confuse AHV (first pillar) with pension fund contributions (second pillar); they are separate
- Do not skip the annual Jahresmeldung reconciliation even if you use payroll software—you remain legally responsible
- Do not treat employer AHV as optional in lean months; it is a fixed cost like wages themselves
- Do not rely on verbal assurances from employees that they will 'handle AHV themselves'—you are liable by law
Frequently asked questions
- Do I have to register my employee for AHV before or after their first day?
- You must register within 5 days of their start date. Contact your cantonal Ausgleichskasse in writing or online. Late registration results in fines and demands for back-contributions plus interest. Most cantons allow online registration; check your canton's office website for the process.
- What happens if I cannot afford to pay my AHV contribution this month?
- You cannot defer AHV contributions. Late payment triggers interest (currently around 5% annually) and may result in debt collection or criminal prosecution for fraud. If you face genuine financial hardship, contact your Ausgleichskasse immediately to discuss a payment plan—but do not skip the obligation.
- Does a 20% Pensum employee pay AHV?
- Yes. AHV is based on annual earnings, not hours worked. If the employee earns above CHF 884 per year across all employment, AHV applies. You deduct it proportionally from each pay period based on their salary. Part-time status does not exempt anyone from AHV.
General information for Swiss employers, not legal advice. Have a lawyer confirm anything with legal consequences.