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Old 28.10.2018, 11:10
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GmbH Income/Director Salary Equivalence

A friend of mine (EU) is negotiating for a position in a U.S. start-up tech company with the option to be anywhere he wishes. As he is already based in CH, he would not like to move in the immediate future, so he is considering setting-up a GmbH here, where he will be the director.

Now, let's assume that as a regular employee of that company, his gross salary would be 150-175k USD. If we also assume that he does not optimize for tax (e.g. Zug, splitting between income and dividends, etc.) and he wants to have full insurance (accident, unemployement etc.) and expenses (e.g tax accountant, payrolling, etc.), what should the GmbH charge the U.S. company to get in the end the equivalent gross salary?

I know that he can optimize tax-wise, by expensing a lot of things (like part of his rent, SBB, internet, mobile, daily stuff), but I am just looking for a ballpark figure here. Would 200k be enough so that his equivalent gross salary would be 150k?

Also, do you see any risks here? He is fully covered in case of unemployment as he is essentially an employee paying unemployment insurance (if the start-up goes under, he just shuts down the GmbH and claims unemployment benefits, right?). Are there any other risks, compared to asking the U.S. company to set-up a branch here and be employed by the branch (maybe legal implications, as the main company can sue his GmbH but not their branch)?
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Old 28.10.2018, 11:28
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Re: GmbH Income/Director Salary Equivalence

200K seems about right.

For a single person, you don't need any payroll software. I just use an excel spreadsheet based on information my accountant gave me.
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Old 28.10.2018, 12:51
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Re: GmbH Income/Director Salary Equivalence

if you don't know,
https://www.glassdoor.com/Salaries/index.htm
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Old 28.10.2018, 21:44
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Re: GmbH Income/Director Salary Equivalence

I think you don't understand the question. It's not about what is a good salary, it's about
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Old 28.10.2018, 22:19
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Re: GmbH Income/Director Salary Equivalence

Exactly, the question is rather simple.

What would be the income that the GmbH would need so that the gross salary of it's director would be 150k (which is basically the gross salary they are offering to my friend as an employee of that company in the US).
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Old 28.10.2018, 22:56
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Re: GmbH Income/Director Salary Equivalence

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Exactly, the question is rather simple.

What would be the income that the GmbH would need so that the gross salary of it's director would be 150k (which is basically the gross salary they are offering to my friend as an employee of that company in the US).

Absolute minimum with no other expenses....about Chf 175k
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Old 29.10.2018, 00:50
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Re: GmbH Income/Director Salary Equivalence

For rough "equivalent" - take desired gross salary, add in employer's portions of AHV/IV (6.25%), accident insurance and KTG (1.5%) , and pension (say 6% assuming a youngish person.) So rough +15% on gross, plus whatever payroll service charges to arrange payments and insurances if he doesn't do himself.
Suggest your friend be very careful if he sets up his own GmbH since he wouldn't get unemployment if he's owner and things go bad. Much safer to have the USA company set up and own the entity, with your friend only as director with signatory rights.
Good luck to your friend!
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Old 29.10.2018, 08:44
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Re: GmbH Income/Director Salary Equivalence

This last one, I don't get. As a salaried employee (director), he would pay unemployment insurance, right? So if things go under, he can still fire himself and collect unemployment benefits, right?
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Old 29.10.2018, 09:47
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Re: GmbH Income/Director Salary Equivalence

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This last one, I don't get. As a salaried employee (director), he would pay unemployment insurance, right? So if things go under, he can still fire himself and collect unemployment benefits, right?

Sort of, yes, but he would almost certainly be required to close the business in the process. Also I question whether a GmbH would be the best way of doing this since it would need a 20k cash injection to set up in the first place. Perhaps he should look at ANOBAG instead?
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Old 29.10.2018, 10:04
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Re: GmbH Income/Director Salary Equivalence

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Sort of, yes, but he would almost certainly be required to close the business in the process. Also I question whether a GmbH would be the best way of doing this since it would need a 20k cash injection to set up in the first place. Perhaps he should look at ANOBAG instead?



The Chf 20k, comes back in about 2-3 weeks after setting up the company minus notary fees and taxes, so about Chf 17.5k which you can spend as the director sees fit, salaries, restaurants, cars, computers or chewing gum.



If you are the majority shareholder (50.1% or more) you cannot claim chomage.
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Old 29.10.2018, 10:23
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Re: GmbH Income/Director Salary Equivalence

For more information on whether a shareholder of a legal entity, such as a GmbH or AG, has a right to unemployment compensation, see the paragraph called "Abandonment of the position comparable to that of an employer" in the below link:

https://www.kmu.admin.ch/kmu/en/home...-employer.html

Based on your input, I would also suggest that your friend review working as an ANOBAG employee rather than setting up a GmbH.
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Old 29.10.2018, 12:36
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Re: GmbH Income/Director Salary Equivalence

I thought that the ANOBAG is something you should stay away from. At least that's what I got from some other EF members.

What is the process there? You just show the work contract to the authorities and then your accountant makes sure that both employer and employee deductions are paid to the respective authorities? In this case, he should be ok with unemployment benefits?
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Old 29.10.2018, 12:39
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Re: GmbH Income/Director Salary Equivalence

I should go to a notary, pay him for an hour of his time and get all the information you need to make a properly informed decision.

It will becChf 300.ó- well spent and itíll save you thousands
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Old 17.11.2018, 23:23
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Re: GmbH Income/Director Salary Equivalence

I'm late to this discussion.....


I thought there were restrictions on the US side as well: buying services from abroad? why not source locally, MAGA etc! last time i checked it was not so easy to sell straight into the US market.
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