I was wondering: if I my salary is X, how much do I cost to my firm (i.e. what multiple of X)? the rule of thumb says c. 1.5 times X?








By these implied costs I mean contribution to pension, office costs, etc.

This prior thread might be able to answer your question:

How much cost me an employee as a company?

Gross wage
- 5.15% AHV
- 1.1% Unemployment insurance

- 5 to 9 % BVG (depending on the pension plan)

- Around 3 % NBU (non work accident) mostly paid by employer but not mandatory

Less taxes at about 20% of net wage

Office costs can be variable (depending on location, services provided etc). Anything between 1K and 5K per month are possible.

the normal rule of thumb is double your salary.

Maybe in other countries but this seems a bit high for Switzerland considering the low taxes. The percentages above for example don't even reach 50%

Any company owners out there?

That's total overheads including rent, electricity & management time

No, I agree with his comment that double is too high - most companies I worked for in the states used 2 as the multiple for rough math, but here most companies I've worked with use 1.5.

X 2 sounds about right if you take everyting into consideration, before this threshold i cannot see an employer making much profit

Benefit costs will depend on the benefits offered beyond compulsory social charges.

A controller at a mid-sized company in Switzerland said he budgeted 15% on top of gross salaries to cover social charges and pension and that there was "polster" (cushion) in the 15%. For companies with more generous pension plans and other benefits, e.g., health insurance, this percentage would undoubtedly be higher. Companies with highly paid employees, however, might have a lower percentage due to the threshold maximums for some social charges.

I have worked for small companies operating on a shoe-string: Giving people a laptop and a phone and make them work from home or at the clients' (it was a consultancy). I am sure they operate at less than 1.5... but then I have also worked for companies with massive representative offices, loads of employee benefits and expensive business travel arrangements - I am sure they are easily at a factor 2 if not over (but still making good money as they know exactly what employees they hire and attract with this expense...).

The overhead costs will depend on the business, where it is located and how it is operated.

A call center located in Aarau will probably have lower overhead costs than one located on the Bahnhofstrasse in Zurich. A company that installs equipment or works on assignments at other companies might have low overhead costs per employee by using a hotelling concept when employees are in the office. Some companies may have low overhead costs because they own a building that was purchased years ago while their competitors rent the newest digs.

Lots of variables and there is no right answer.

Agree. The answer is also contingent on the reason for the question. If you are shedding cost, then most likely you only care about variable costs and not the fixed OH. If you are budgeting for incremental heads, then you can use the 1.5 or 2.0 factor as a rough cut to evaluate ROI. (I normally use 1.5). If you are looking at wage arbitrage, then usually back to the variable (but not always).

If you need the figure for a business plan then the cost of a position based on salary is usually estimated as 1.20-1.25 in Switzerland, (versus for instance 1.47 Germany and 1.65 China). Office and equipment costs are added in a differet cost position/budget and are calculated as a percentage of salary.