SHARE
COPY LINK
For members

JOBS

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.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

WORKING IN SWITZERLAND

Which Swiss companies have the biggest gaps between high and low earners?

While Swiss wages are more equitable than those of most other European countries, there is still a significant disparity between the lowest and highest salaries in the country’s big companies, according to a new survey.

Which Swiss companies have the biggest gaps between high and low earners?

Wage inequality can either come about when income is unevenly distributed throughout a population, or, on a smaller scale within a given company.

Although Switzerland generally boasts strong pro-worker labour laws and salaries that are among the highest in the world, new research indicates that wage disparity is alive and well in many large Swiss companies.

The study, carried out by Unia labour union, shows that in 2021, executives of 43 largest Swiss firms earned an average of 141 times more than their lowest-paid employees.

The worst offender in terms of income disparity is Roche, where top executives earn 307 times more than their lowest-paid workers. The pharmaceutical giant is followed by UBS (221), Logitech (204), Nestlé (201), Alcon (197), and Novartis (195).

What is the study authors’ definition of a ‘low’ wage in this context?

In half of the 43 companies surveyed, Unia found that the lowest incomes are less than 50,712 francs per year.

“These salaries are significantly lower than the ‘low salary threshold’, which, for Switzerland, corresponds to 53,320 francs”, the study reads. 

While salaries of the lowest paid employees grew by only 0.5 percent between 2016 and 2020 (the last year for which official data is available), for the higher-ups the increase was 4 percent.

READ MORE: Swiss salaries: How much do people earn in Switzerland?

How does Switzerland compare to other countries in terms of income disparity?

Data published by the Federal Statistical Office (FSO) indicates that when it comes to salaries, Switzerland matches the EU’s median ratio of 4.9 — which means that the total income of the richest 20 percent of the population is 4.9 times greater than the total income of the poorest 20 percent.

This is the same ratio as in Germany.

By comparison, the ratio in Switzerland’s neighbour, Italy, is much higher — 5.8 percent — France’s is 4.5 percent, and Austria’s 4.1.

Generally speaking, and income inequality notwithstanding, “the standard of living in Switzerland remains one of the highest in Europe”, the FSO said.

This means that after adjustment for differences in price levels between countries, “the Swiss population’s financial situation is more comfortable than that of its neighbouring countries and countries in the European Union”.

This is the case even though the cost of living in Switzerland is higher than in most European countries, according to FSO.
 
READ MORE: EXPLAINED: Why Switzerland’s cost of living isn’t as high as you think

SHOW COMMENTS