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EXPLAINED: What is the 13th-month salary in Switzerland and how is it calculated?

Most companies in Switzerland pay wages to their employees based on a 13-month system. How does this work?

Swiss cash bills seen up close
Most employees in Switzerland receive the 13th salary. Photo: Fabrice Coffrini/AFP

Switzerland, as with most countries, has 12 official months in the year – so why do many Swiss employees receive a 13th payment? 

Swiss salaries are among the highest in the world, attracting many workers from abroad, even though the cost of living in Switzerland is high as well.

The 13-salary system is not part of the Swiss labour law, as it is in some countries, it is more a matter of custom.

However, if it is part of the employment contract, then the company is obligated to pay it. Currently, nine out of 10 employers do so.

The 13th salary is not a bonus

When you get hired by a company that uses the 13-salary system, it means that your annual earnings are calculated on, and paid out in,13 instalments rather than 12.

Some companies don’t pay a 13th month’s salary but will pay higher monthly wages (in 12 installments) instead.

Your annual income will still be the same, it just depends on how it is divided – by 12 or 13.

Why not just pay 12 salaries?

The idea behind this system is that the 13th instalment paid out in December (in effect, two months’ salary) will help pay for Christmas expenses and other end-of-year bills.

If half of the 13th salary is paid in July, it is to help bankroll summer vacation (although of course you are free to spend it on whatever you wish). 

READ MORE: What are the best and worst paid jobs in Switzerland?

Are you entitled to 13th salary if you miss work on certain days?

If the absence is justifiable and limited in time, then yes.

For instance, if you miss work due to illness, accident, pregnancy or maternity, military service, death in the family, or other important reasons defined by Swiss employment law, you are still entitled to compensation.

What if you don’t work a full year or are paid on an hourly basis?

If you start employment or quit your job during the calendar year, the 13th month payment is paid on a pro-rata basis, in proportion to the months spent in the company.  

As for hourly workers who are also entitled to a 13th salary, they are usually paid monthly. The hourly rate is then increased by 8.33 percent.

What about bonuses?

Bonuses are independent of the 13th salary.  

Swiss law doesn’t contain any provision that specifically deals with the bonus, which may consist of money, shares, stock options in the company, or other perks. It depends entirely on the goodwill of the employer.

Typically, this should be addressed in the employment contract.

SALARIES IN SWITZERLAND: In which sectors have wages increased the most?

Here you can see how much workers in Switzerland earn on average.

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Employment: This is where Switzerland’s jobs are right now

Switzerland’s labour market bounced back quite well from the Covid pandemic, with many industries looking to hire skilled workers. A new study shows where most vacant positions are.

Employment: This is where Switzerland's jobs are right now

As The Local recently reported, “many sectors are looking for qualified workers, according to the State Secretariat for Economic Affairs (SECO), which reports that the unemployment rate was a record-low 2.3 percent in April, and the number of job seekers is currently 25 percent lower than at the same time in 2021. 

While many industries are experiencing a boom — for instance, jobs in IT, healthcare, construction and sales are plentiful — the shortage of skilled employees is a huge problem for many employers.

READ MORE: Which jobs are in demand in Switzerland right now – and how much can you earn?

Now a study by the Swiss section of Manpower recruiting agency sheds light on where in Switzerland most job vacancies are, which could be helpful to everyone looking for employment now.

The good news for job seekers is that “the market situation is very positive for employees…Skilled workers are scarce and the shortage cannot simply be filled by workers from neighbouring countries”, according to Peter Unternährer, Manpower’s regional director for central and eastern Switzerland.

Manpower’s survey for the second quarter of 2022 (April to June) shows that 38 percent of Switzerland’s employers plan to hire new workers.

Most job opportunities (32 percent of employers seeking to hire personnel) are found in the greater Zurich area, followed by 31 percent in the Mittelland, which encompasses the cantons of Bern, Fribourg, Jura, Neuchâtel and Solothurn.

Next (30 percent) are in the Lake Geneva region, which includes the city and canton of Geneva, as well as Vaud.

In central Switzerland, 24 percent of companies are looking for employees, 23 percent in the eastern part of the country, and 18 percent in the northwest.

Manpower also found that 75 percent of the companies surveyed promote gender equality and 63 percent promote diversity in the workplace — meaning they are inclusive of employees of all backgrounds and nationalities, both in terms of hiring practices and wages.

Overall, Switzerland’s unemployment rate is much lower than across the European Union — where more than 6 percent are jobless, according to latest figures from Eurostat — because the Swiss economy was already sturdier than many others before Covid struck, so was in a better position to withstand the crisis.

But Switzerland was also one of the very few countries that have been able to attract international companies to its shores even in the midst of the pandemic, which translated into more jobs for the local workforce.

Experts believe this is due to the country’s strengths, including political, economic and financial conditions.

“Even in a time of crisis, Switzerland scored thanks to its stability, predictability and security”, said Patrik Wermelinger, member of the executive board of Switzerland Global Enterprise (SGE), which promotes the country abroad on behalf of the federal government and the cantons.

READ MORE: How the Swiss job market rebounded from the Covid pandemic
 

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