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Old 30.12.2019, 00:49
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Is my offer's pension contribution fair?

Hi,

I'm a software developer moving to Geneva. My employer offered to continue my employment through a payroll company for a remote position.

My annual salary would be 140 CHF which is great for me. However, the pension contribution (from the employer side) would be around 250 CHF per month. Isn't that on the low end, even the lowest allowed contribution?

Don't high-tech companies usually contribute up to 10% of the salary to pension / private pension?

I'd like to hear your opinion about this. Thank you.
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Old 30.12.2019, 09:04
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Re: Is my offer's pension contribution fair?

Depends on your age.

Tom
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Old 30.12.2019, 09:11
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depends on your age.

Tom
32

The salary is 140k annually. Forgot the "k" in the original post.

Last edited by 3Wishes; 03.01.2020 at 19:40. Reason: merging consecutive replies
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Old 30.12.2019, 09:31
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Re: Is my offer's pension contribution fair?

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Hi,

I'm a software developer moving to Geneva. My employer offered to continue my employment through a payroll company for a remote position.

My annual salary would be 140 CHF which is great for me. However, the pension contribution (from the employer side) would be around 250 CHF per month. Isn't that on the low end, even the lowest allowed contribution?

Don't high-tech companies usually contribute up to 10% of the salary to pension / private pension?

I'd like to hear your opinion about this. Thank you.
Sounds like the min required by law as under half of your salary is required to be pensionable. Not uncommon in the real world.
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Old 03.01.2020, 11:07
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Re: Is my offer's pension contribution fair?

This is not clear to me.



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My employer offered to continue my employment through a payroll company for a remote position.
So you will be an employee of the Swiss payroll company, not your current employer.(?)
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My annual salary would be 140 CHF which is great for me. However, the pension contribution (from the employer side) would be around 250 CHF per month. Isn't that on the low end, even the lowest allowed contribution?
Payroll companies deal with contractors, who usually have their own pension arrangemenst and plans, so want the bare minimum deducted from their wages.
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Don't high-tech companies usually contribute up to 10% of the salary to pension / private pension?
Yes, they do, but you will be an employee of the payroll company.
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I'd like to hear your opinion about this. Thank you.
Looks to me like you will legally be employed by the payroll company while supplying your services to your ex-employer.

Please double check what your legal situation is.

Is that 140k net or gross? You need to understand that the payroll company will not incure any costs itself, ALL costs of employing you come from the money your ex-employer pays.

eg, AHV is 5.15% for the employee and the same for the employer.
If that 140k is gross ( the overall mount paid be your ex to the payroll company) then the payroll company will deduct their PROFIT for running the payroll ( eg 10% ) and then both YOURS and THEIR AHV contributions.
So from that one 140k, you already have deductions of over 20%, then there are other deductions, like the pension etc, and eventually, depending on the local tax rate, you may be getting close to 60% of that 140k yourself.



Maybe your current employer has explained everything to you already and it's clear, the 140k is net, maybe it's not, in which case you need to clarify.
I would not be confident your employer would continue this situation/complication long term, so have a Plan B ready.
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Old 03.01.2020, 11:27
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Re: Is my offer's pension contribution fair?

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Sounds like the min required by law as under half of your salary is required to be pensionable. Not uncommon in the real world.
Very common when under payroll, and not directly employed.
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Old 05.01.2020, 14:59
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Re: Is my offer's pension contribution fair?

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This is not clear to me.

So you will be an employee of the Swiss payroll company, not your current employer.(?)
Correct.

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Payroll companies deal with contractors, who usually have their own pension arrangemenst and plans, so want the bare minimum deducted from their wages.
Makes sense. I was never a contractor though, I'm trying to understand if I should take care of my own pension now or just save by myself.

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Yes, they do, but you will be an employee of the payroll company.

Looks to me like you will legally be employed by the payroll company while supplying your services to your ex-employer.

Please double check what your legal situation is.

Is that 140k net or gross? You need to understand that the payroll company will not incure any costs itself, ALL costs of employing you come from the money your ex-employer pays.

eg, AHV is 5.15% for the employee and the same for the employer.
If that 140k is gross ( the overall mount paid be your ex to the payroll company) then the payroll company will deduct their PROFIT for running the payroll ( eg 10% ) and then both YOURS and THEIR AHV contributions.
So from that one 140k, you already have deductions of over 20%, then there are other deductions, like the pension etc, and eventually, depending on the local tax rate, you may be getting close to 60% of that 140k yourself.



Maybe your current employer has explained everything to you already and it's clear, the 140k is net, maybe it's not, in which case you need to clarify.
I would not be confident your employer would continue this situation/complication long term, so have a Plan B ready.
The 140k is my salary. They didn't tell me the cost of my employment through the payroll company, it's their business. My employer is a medium size international company and I have an EU citizenship.

Thanks a lot for your reply!
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Old 05.01.2020, 15:15
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Re: Is my offer's pension contribution fair?

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The 140k is my salary.
Gross, or net?

Tom
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Old 05.01.2020, 15:30
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Re: Is my offer's pension contribution fair?

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Gross, or net?
Tom


This is the salary that I'll receive from the payroll company. Whatever fees my employer will pay to the payroll company is irrelevant.

It's still the gross salary because it's before federal and canton taxes, pensions and other deductions.

Am I explaining this right at all?
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Old 05.01.2020, 15:38
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Re: Is my offer's pension contribution fair?

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This is the salary that I'll receive from the payroll company. Whatever fees my employer will pay to the payroll company is irrelevant.

It's still the gross salary because it's before federal and canton taxes, pensions and other deductions.

Am I explaining this right at all?

Yes, clear.
However, ask them for a salary/payslip projection, then you'll be able to see what to expect, and there'll be no unpleasant surprises.

No doubt you'll get an L permit, so tax deducted at source.
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Old 05.01.2020, 23:40
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Re: Is my offer's pension contribution fair?

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Yes, clear.
However, ask them for a salary/payslip projection, then you'll be able to see what to expect, and there'll be no unpleasant surprises.

No doubt you'll get an L permit, so tax deducted at source.
Ok, thank you
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