Net Salary (Nettolohn)
Nettolohn is the amount an employee receives in their bank account after all mandatory deductions—social insurance contributions (AHV/ALV), occupational pension (BVG), and income tax (Quellensteuer or cantonal tax). It differs from gross salary (Bruttolohn), which includes these costs before deduction.
As a Swiss employer, you must distinguish between gross salary (Bruttolohn) and net salary (Nettolohn) from your first hire. Gross is what you agree with the employee; net is what lands in their account. The gap includes mandatory employee contributions, employer contributions (separate from gross), and withholding taxes.
Swiss law (ArG, AHV Act, BVG) sets minimum contribution rates. Your canton and the employee's personal circumstances determine the final net amount. This distinction matters for payroll, employment contracts, and tax compliance.
When Net Salary Comes Up
You encounter Nettolohn when creating employment contracts, calculating monthly payroll, and responding to employee questions about take-home pay. Many new employers confuse what they can 'afford' (thinking of gross) with what employees actually receive.
The employee sees net salary on every payslip (Lohnabrechnung). Your payroll software calculates it automatically, but you must verify the deductions match your canton's rates and the employee's tax class (Lohnklasse).
- Employment contract should state gross salary; net is calculated and shown on payslips
- Deductions include: employee AHV/ALV (~5.3%), BVG pension contribution (~10%), and Quellensteuer (withholding tax, varies by canton and salary)
- Employer pays separate social contributions (~10.6% for AHV/ALV/Unfallversicherung) not deducted from employee pay
- If employee earns CHF 3,500 gross, net might be CHF 2,800–2,950 depending on canton, age, and marital status
- Pensum (part-time percentage) affects gross—a 60% Pensum reduces gross proportionally before calculating net
- 13. Monatslohn (13th-month bonus) is subject to the same deductions as regular salary
Your Obligations
You must provide each employee a detailed payslip (Lohnabrechnung) showing gross salary, every deduction itemized, and net amount. Swiss law requires this transparency. You must withhold and remit Quellensteuer (or direct tax where applicable) to cantonal authorities by the deadline—usually monthly or quarterly.
Contribute your own employer share to AHV/ALV and accident insurance, and ensure the employee is enrolled in an occupational pension (BVG) if annual gross salary exceeds CHF 22,050 (2024 threshold). Verify your canton's specific rates—they vary.
- Provide itemized payslip every pay period; it must show gross, each deduction, and net
- Withhold and remit Quellensteuer on time according to your canton's schedule
- Enroll employee in BVG pension within 3 months of employment start (if salary threshold met)
- Keep payroll records for at least 5 years
- If employee requests a wage certificate (Lohnabrechnung copies), provide it promptly
- Update deductions if employee's tax class or canton changes (e.g., marriage, relocation)
Most Common Mistake
Employers assume the number they write on a contract ('CHF 3,500') is what the employee will receive. Then the employee's first payslip arrives, showing CHF 2,850 net, and they feel misled. The employer should have been clear: gross salary is negotiated; net varies by canton and circumstances.
A second frequent error: forgetting to register for Quellensteuer withholding with the canton tax office before the first payroll. This creates penalties and complications. Use your cantonal tax authority's checklist (available online) and confirm enrollment before hiring.
- Not explaining gross vs. net in the job offer or contract—always state the gross figure
- Failing to register for Quellensteuer with the canton before the first payday
- Using outdated BVG or AHV contribution rates; confirm your canton's current rates annually
- Not adjusting net deductions when an employee's tax class or canton residence changes
- Mixing up employer contributions (your cost, not deducted from salary) with employee contributions (deducted from their pay)
Frequently asked questions
- What's the difference between Bruttolohn and Nettolohn?
- Bruttolohn (gross salary) is the figure you agree on in the employment contract. Nettolohn (net salary) is what the employee receives after mandatory deductions: AHV/ALV (~5.3%), BVG pension (~10%), and Quellensteuer (withholding tax, varies by canton). Employer contributions (your cost) do not affect the employee's net salary.
- Why does my employee's net salary differ from another company's employee at the same gross?
- Canton, age, marital status (Lohnklasse), and pension plan choice all affect deductions. An employee in Zug pays lower tax than one in Geneva at the same gross. Your payroll software reflects these factors; verify settings are correct for your canton.
- When must I register for Quellensteuer withholding?
- Before your first employee's payday. Contact your cantonal tax office (Steuerverwaltung or Fiscalité) as soon as you know you'll hire. Registration is typically online and takes a few days. Failing to register incurs penalties, so do this early.
General information for Swiss employers, not legal advice. Have a lawyer confirm anything with legal consequences.