KTG: Sickness Daily Allowance Insurance
KTG (Krankentaggeldversicherung) is sickness daily allowance insurance that replaces part of an employee's lost income during sick leave. Employers typically pay premiums or contribute to a fund. Coverage kicks in after a waiting period—usually 3 days—and varies by canton and insurance plan. Your obligation depends on your canton and company size.
KTG is mandatory or recommended insurance in most Swiss cantons. It protects employees financially when they cannot work due to illness. Premiums are shared between employer and employee, though cost-splitting varies by canton and collective labour agreement (GAV).
Your role as employer is to understand your canton's rules, ensure premiums are deducted correctly from payroll, and communicate coverage details to staff. Many small firms overlook KTG requirements until they face a sick leave claim.
When KTG Matters in Your Hiring and Payroll
KTG becomes relevant the moment you employ someone. During the first three days of sick leave (the waiting period), the employer typically pays wages. After that, the KTG insurance takes over, paying the employee a daily allowance—usually 70–80% of normal salary, capped per canton.
You must deduct employee KTG contributions from payroll and pay employer contributions on time. Failure to do so can leave you liable for unpaid wages during long illness. Canton rules differ: some require KTG for all employees; others exempt those under a certain Pensum or earning threshold.
- Waiting period is typically 3 calendar days—you cover wages during this time
- KTG takes over on day 4, paying a daily allowance (not full salary)
- Contribution rates vary by canton (Basel-Stadt, Zurich, Bern have different rules)
- Both employer and employee contribute; split depends on GAV or canton law
- Some cantonal funds are mandatory; others are optional private insurance
- Coverage lasts 730 days per calendar year in most plans
Your Legal Obligation
Swiss law (ArG, article 324a) requires employers to continue paying wages during short sick leave. KTG supplements this—it kicks in after the waiting period to reduce your ongoing wage liability. Your specific obligation depends on your canton's regulations and any GAV your company follows.
You must enrol employees in a KTG plan (or fund) within your canton's timeframe, typically within 30 days of hiring. Consult your canton's social insurance office (Ausgleichskasse or equivalent) to confirm your exact obligations. A lawyer or HR advisor should verify your plan meets local requirements.
- Enrol new employees in KTG within 30 days of hire (check your canton)
- Deduct employee contributions and pay employer contributions on time
- Keep proof of KTG affiliation; produce it if questioned by cantonal authorities
- If you have a GAV, follow its KTG rules—they may override general canton rules
- Review your plan annually; rates and benefits change
- Inform employees of their coverage details and daily allowance amount
The Most Common Mistake
Many small employers delay enrolling in KTG or assume they are already covered through a default cantonal fund. When an employee falls sick for weeks, they discover no coverage is active, or contributions were not deducted—leaving the employer liable for the full wage.
Do not assume KTG is automatic. Confirm your plan is active, contributions are flowing, and employees understand their coverage. Check your payroll software to ensure KTG deductions appear correctly each month. Ignorance of canton requirements offers no legal protection if a claim arises.
- Assuming you are automatically enrolled in a cantonal fund (you may not be)
- Forgetting to deduct or pay contributions, then facing back-payment demands
- Confusing KTG with disability insurance (IV) or accident insurance (UVG)—they are separate
- Not updating employees when coverage changes or plan terms shift
- Paying full wages during sick leave without knowing KTG will later reimburse you
- Failing to document enrolment proof; hard to defend if audited
Frequently asked questions
- Do I have to offer KTG if I am a small employer with fewer than 5 staff?
- This depends on your canton. Some require KTG for all employers; others exempt firms below a certain size or Pensum threshold. Check with your cantonal Ausgleichskasse or social insurance office. Even if not legally required, offering KTG makes you competitive and protects your business from long sick leave.
- What is the difference between KTG and accident insurance (UVG)?
- KTG covers income loss from illness. UVG (accident insurance) covers work-related and non-work-related accidents. They are separate policies. UVG is mandatory for almost all employers; KTG requirements vary by canton. Both protect employees but apply to different situations.
- If an employee is on sick leave, do I pay their full salary or does KTG pay it?
- You pay full salary for the first 3 days (waiting period). From day 4, KTG pays a daily allowance—usually 70–80% of salary. You may choose to supplement the gap to reach full pay, but KTG does not cover the full amount. Check your plan document and canton rules for exact percentages.
General information for Swiss employers, not legal advice. Have a lawyer confirm anything with legal consequences.