Swiss incidental wage costs: how to calculate actual employer costs

But what exactly are these additional costs? A look at the components of wage costs shows why the salary paid represents only part of the actual employer costs.

Why the paid salary is deceptive

SMEs and company founders rely on realistic wage cost figures for price calculations, investment decisions and profitability assessments. The pure net or gross salary sum is often too imprecise: social insurance, insurance, retirement planning or voluntary benefits quickly add up and have to be factored in.

What wage costs include

Direct wage costs

Direct wage costs include:

• Gross salary incl. 13th monthly salary
• Variable salary components such as bonuses or allowances
• Supplements for night, weekend or public holiday work
• Reimbursement of expenses

They form the basis for every wage cost calculation.

Incidental wage costs in Switzerland

In addition to these are the indirect costs, also known as incidental wage costs. These include:

• Employer contributions to OASI, DI, EO and UI
• Occupational accident insurance (AIA) and non-occupational accident insurance (NBUV)
• Family allowances
• Contributions to employee benefits, pension fund (OPA)
• Daily allowance insurance (TG): benefits in the event of illness in accordance with a contractual solution and continued salary payment in the event of maternity in accordance with legal provisions – including any voluntary benefits (e.g. 100 percent continued salary payment during maternity leave); recruitment and training costs
• Voluntary benefits such as vouchers for meals, travel costs or additional insurance

What factors also influence your employer costs

Actual employer costs depend on a number of factors that companies should take into account when planning:

• Statutory provisions: social security contributions are binding.
• Sector and collective employment contract: different minimum standards apply depending on the sector.
• Age and retirement planning: OPA contributions increase with age.
• Company decisions: amount of voluntary benefits, advanced training or benefits.
• Staff turnover and absences: recruitment and absences due to illness result in additional costs.

Simplify your wage cost calculation with a uniform rate

For internal budget calculations, it is worth working with a uniform rate. This avoids the need for detailed calculations for each individual item.

The gross salary is the most suitable basis for calculation. This is because it is contractually defined, comparable for all employees and independent of individual deductions such as taxes or personal retirement planning solutions. In addition, all employer contributions and incidental wage costs are based directly on the gross salary.

In practice, the following rule of thumb works well:
Calculate using the gross salary and add a flat rate of 20 to 25 percent for incidental wage costs.

This approach is particularly suitable for the startup phase, for budget and scenario calculations or for setting prices. The exact calculation is carried out later in the payroll accounting.

How to calculate wage costs step by step

1. Determine headcount:
   Take into account filled, open and planned positions.
2. Define gross salary:
   Including 13th monthly salary and variable components.
3. Calculate incidental wage costs:
   This is the most complicated part: get an overview of employer contributions, insurance, pension fund contributions and other additional costs.
4. Determine full costs per employee:
   Gross salary plus incidental wage costs equate to the actual employer costs.

Our checklist will help you to implement these steps in a structured manner.

Why accurate planning is crucial

Accurate wage cost calculation creates an overview and security. It shows the extent to which personnel expenses weigh on liquidity, whether the revenue generated is sufficient to finance employees sustainably and where financial leeway remains.

With realistic planning, you create a stable basis for your company from the outset so that you can make sensible decisions with regard to new hires, investments or developments.