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Old 26.10.2015, 10:49
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Hiring myself... what steps do I need to do in which order?

Hi!

Well, simply put: I started a GmbH, got my customer paying me money and it is time to set up my own work contract with myself (I am planning on having the best job interview of my life...) as I am sure I have to pay social insurances, pension fund and what not else.

While I think I am in principle aware of all the individual items have I experienced that in Switzerland the sequence of the steps is extremely important as I otherwise run from a to b to c to back to a... and so on. Googled a bit but just ended up with a lot of useless sample contracts, not the hands on advice I am looking for... who knows what I have to do to hire a person from an administrative perspective?

Thanks!
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Old 26.10.2015, 11:01
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Re: Hiring myself... what steps do I need to do in which order?

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Hi!

Well, simply put: I started a GmbH, got my customer paying me money and it is time to set up my own work contract with myself (I am planning on having the best job interview of my life...) as I am sure I have to pay social insurances, pension fund and what not else.

While I think I am in principle aware of all the individual items have I experienced that in Switzerland the sequence of the steps is extremely important as I otherwise run from a to b to c to back to a... and so on. Googled a bit but just ended up with a lot of useless sample contracts, not the hands on advice I am looking for... who knows what I have to do to hire a person from an administrative perspective?

Thanks!
Trev buddy, whatchya going to do if you fail the interview?
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Old 26.10.2015, 11:03
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Re: Hiring myself... what steps do I need to do in which order?

depends on what you want to organise/settle

any contract will do. You may need it for your permit and other institutions so make it look ok. Mention who pays the LPP fund (you or company) and that bonuses are not subject to LPP (so you can give yourself a big bonus without a check from LPP arriving).

You may put in details on reimbursements of meals, miles, etc but I suggest not to do that and make yourself a little reglement if necessary (in case someone comes to check your taxes)
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Old 26.10.2015, 11:06
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Re: Hiring myself... what steps do I need to do in which order?

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and that bonuses are not subject to LPP (so you can give yourself a big bonus without a check from LPP arriving).
is that legal? Why would anyone pay those then?

That's something I need to look in right now.
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Old 26.10.2015, 11:07
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Re: Hiring myself... what steps do I need to do in which order?

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Trev buddy, whatchya going to do if you fail the interview?
I'll sue. It's clearly racial discrimination.
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Old 26.10.2015, 11:31
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Re: Hiring myself... what steps do I need to do in which order?

I've been working for my own GmbH for ten years and have no written contract. It's never been an issue. I have to declare on various forms the salary of each employee. I picked a yearly salary that's easily achievable and enough to live on.

Someone will, at some point, check your taxes and your social contributions. But it might be after several years of operation. It's happened to us once so far, and our accountant dealt with it.
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Old 26.10.2015, 11:31
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Re: Hiring myself... what steps do I need to do in which order?

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I'll sue. It's clearly racial discrimination.
How would you know thou... oh wait.

Cuts both ways: if you are interviewing yourself, you know what difficult questions to ask!
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Old 26.10.2015, 11:34
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Re: Hiring myself... what steps do I need to do in which order?

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is that legal? Why would anyone pay those then?

That's something I need to look in right now.
yes is legal. quite normal to be honest. applies only to the bonus of course
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Old 26.10.2015, 11:35
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Re: Hiring myself... what steps do I need to do in which order?

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I've been working for my own GmbH for ten years and have no written contract. It's never been an issue. I have to declare on various forms the salary of each employee. I picked a yearly salary that's easily achievable and enough to live on.

Someone will, at some point, check your taxes and your social contributions. But it might be after several years of operation. It's happened to us once so far, and our accountant dealt with it.
how did you renew your work permit without a contract?
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Old 26.10.2015, 11:49
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Re: Hiring myself... what steps do I need to do in which order?

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yes is legal. quite normal to be honest. applies only to the bonus of course
I just want to make sure i get this right... my French is terrible but LPP are what they call the social insurances, right? I am pretty certain that a bonus counts as part of your income together with the fixed payment, so how can you get it deduction-free? Simply a clause in a work contract?! That seems so odd to me...
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Old 26.10.2015, 12:06
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Re: Hiring myself... what steps do I need to do in which order?

Give "power to decide" to a Fiduciere company to hire you and also fire you, this way you can be eligible for RAV payments.
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Old 26.10.2015, 12:08
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Re: Hiring myself... what steps do I need to do in which order?

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Cuts both ways: if you are interviewing yourself, you know what difficult questions to ask!
The biggest problem was that he kept imagining himself naked
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Old 26.10.2015, 12:12
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Re: Hiring myself... what steps do I need to do in which order?

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how did you renew your work permit without a contract?
same question?

Are you in French speaking part now? If ever you need help pop in (but in the UK now till next Tuesday). Can do intensive course too.
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Old 26.10.2015, 12:13
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Re: Hiring myself... what steps do I need to do in which order?

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is that legal? Why would anyone pay those then?

That's something I need to look in right now.
Pension legal requirement ends about 84k, any pension above that is optional & open to negotiation.

LPP is Pilar 2 pension
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Old 26.10.2015, 12:20
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Re: Hiring myself... what steps do I need to do in which order?

Ok, so in simple terms:

- I write myself a work contract
- I register it with whom exactly? City hall for the taxes and somewhere else for the AHV/IV?
- what next?
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Old 26.10.2015, 12:26
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Re: Hiring myself... what steps do I need to do in which order?

Just keep it really simple, any more than a page of A4 (doubled spaced) makes it already complicated !

Be careful with "bonus" pymts, they can come back and bite you in the ass, think more "dividend" payment
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Old 26.10.2015, 12:36
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Re: Hiring myself... what steps do I need to do in which order?

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how did you renew your work permit without a contract?
This pre-supposes that you need a contract to renew your permit. All I can say is that when my permit was last renewed, there was no request for an employment contract. Probably the Kantonal authorities have access to the Kantonal Handelsregister...

Dividends and bonuses have different tax treatments. You can use both and play with the levels to reduce your overall taxation. I can't handle the complexity so I just follow my accountant's advice - and ensure I keep enough personal and corporate liquidity to cover the inevitable demands for more tax!

The way I think it works is that when you calculate how much you've got to disburse for year x, a bonus will add to your personal taxable income in year x. The company will pay social deductions on the bonus + salary within year x, but the company profit is reduced by the amount of the bonus. Your payment on accounts for year x+1 (or even x+2) may be affected.

With dividends, the dividend goes into year x+1 for your personal taxation. There's a withholding tax payable immediately, so you only get your hands 65% of the dividend value. The other 35% is a tax credit on year x+1. However the company profit is not reduced by the amount of the dividend, so the company will pay more tax for year x. There's no social deductions from dividends.
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Last edited by NotAllThere; 26.10.2015 at 12:58.
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Old 26.10.2015, 13:03
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Re: Hiring myself... what steps do I need to do in which order?

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Just keep it really simple, any more than a page of A4 (doubled spaced) makes it already complicated !

Be careful with "bonus" pymts, they can come back and bite you in the ass, think more "dividend" payment
fully agree with the short and simple

looking at OP questions please do not confuse LPP (which is your own pension) with AVS and others (which are state). Any bonus needs of course payments to AVS but not to LPP.

Go to AxA or similar to get some (free) advise on LPP. In my view keep yourself to the minimal. On the other hand if your sarl is doing well you may want to put some extra in your LPP (you pay yourself a bonus and put it in the LPP so you do not pay income tax on it. LPP payments are deductible from your taxable income). Your LPP fund contract should allow that.
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Old 26.10.2015, 13:10
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Re: Hiring myself... what steps do I need to do in which order?

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I just want to make sure i get this right... my French is terrible but LPP are what they call the social insurances, right?
You are not getting it right I am afraid. LPP is your private pension (which is mandatory) and these are not social insurances like unemployment, AVS (old age pension by the state). Social insurances you always have to pay on salaries incl bonus (approx 11-12%)
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Old 26.10.2015, 13:27
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Re: Hiring myself... what steps do I need to do in which order?

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how did you renew your work permit without a contract?
You don't need to show a work contract to renew a permit here in Neuchâtel p. OH went from 5 year B to C without having to provide any documentation at all.

As with everything here it probably depends on which canton you're living in.
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