Sickness Daily Allowance (Krankentaggeld)
Krankentaggeld is supplementary insurance that replaces a portion of an employee's salary during illness-related absences. Unlike mandatory social insurance, it is optional for employers but common in Switzerland, especially for salaried roles. Swiss law does not require it, but collective agreements (GAV) may mandate coverage. Employers who offer it typically cover absences after the first few unpaid days, reducing their own wage-continuation obligation.
Krankentaggeld (sickness daily allowance) is voluntary insurance that covers a percentage of an employee's salary when they cannot work due to illness. It bridges the gap between your employer wage-continuation obligation and long-term disability coverage.
Unlike compulsory social insurance, Krankentaggeld is optional. However, it is widespread in Swiss SMEs, particularly for administrative and management staff. Your cantonal norms and any applicable GAV may influence whether employees expect it.
When it becomes relevant
Krankentaggeld enters the picture when an employee reports a medical inability to work lasting more than a few days. In most cantons, employers must continue paying 80% of gross salary for a defined period (commonly 3 weeks to 3 months). Krankentaggeld insurance then takes over, reducing your direct cost.
The threshold varies by canton and employment contract. Some employers offer it to all staff; others limit it to full-time salaried employees at a certain Pensum. Determining who qualifies and under what terms must be clear before an absence occurs.
- Triggers when medical certificate confirms inability to work
- Typically covers absences after 3–30 unpaid waiting days
- Replaces 70–100% of salary, depending on policy
- Coverage period is usually 720–1,095 days (2–3 years)
- More common in cantons with higher wage-continuation expectations
- Often required for roles above a certain salary threshold
Your obligation as employer
You are legally required to continue paying an agreed wage during illness for a reasonable period, without Krankentaggeld insurance. Swiss law does not specify an exact duration; cantons and court precedent set the standard. Generally, 3 weeks to 3 months is accepted before shifting to partial or no payment.
If you purchase Krankentaggeld, the policy terms define exactly who is covered and for how long. You must clearly communicate these terms in the employment contract or staff handbook. Ensure premiums are paid on time and that claims are filed promptly when an employee becomes unable to work.
- Pay agreed salary during illness for the legally expected period (often 3 weeks–3 months)
- Declare and fund Krankentaggeld insurance if offered
- Include coverage details in employment contracts
- File claims with the insurer within the policy timeframe
- Maintain clear documentation of absences and medical certificates
- Review policy annually to match staff composition and roles
Most common mistake
Assuming Krankentaggeld exists and covers all staff, then discovering during a long illness that coverage does not apply to that employee. This happens when the policy was purchased years ago or the employment contract predates it, creating confusion and potential disputes.
A second frequent error is failing to update Krankentaggeld coverage when staffing changes. As your SME grows, employees hired under older terms may have different entitlements than newer hires, creating inequality and administrative confusion. Audit your contracts and insurance annually.
- Not confirming coverage explicitly in writing with each employee
- Assuming historical policies still cover all current roles and Pensum levels
- Forgetting to file claims within the insurer's deadline window
- Conflating Krankentaggeld with statutory wage-continuation duty
- Not reviewing policies when hiring or promoting staff
- Leaving gaps between end of employer obligation and start of insurance coverage
Frequently asked questions
- Is Krankentaggeld required by Swiss law?
- No. Krankentaggeld is optional insurance. You are required only to continue paying an agreed wage during the illness period set by canton law and court practice (typically 3 weeks to 3 months). Krankentaggeld reduces that burden. Some GAVs or cantons may expect it; consult a labour lawyer to confirm your obligations in your canton and industry.
- Can I offer Krankentaggeld to only some employees?
- Yes, but you must state this clearly in employment contracts. Common practice is to offer it to full-time salaried staff at 100% Pensum and above a salary threshold, excluding hourly or part-time workers. Be consistent and document the eligibility rules in your staff handbook.
- What happens if Krankentaggeld coverage ends but the employee is still unable to work?
- Once Krankentaggeld expires, responsibility shifts to the employee's disability insurance (Invalidenversicherung). You are generally not liable for further payments unless the contract or collective agreement specifies otherwise. Consult a lawyer about your cantonal rules and any GAV obligations.
General information for Swiss employers, not legal advice. Have a lawyer confirm anything with legal consequences.