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Old 03.09.2021, 13:20
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Contract work - taxes and stuff - advice

I am about to sign a contract with a Swiss company. But before actual employment they want to work with me as a an external consultant (for 3 month then we sign normal employment contract)
They sent me the contract and I notice that they doesn't want to run any payments for me (taxes, social contributions, insurances and other stuff)
So I would have to pay all by myself.
Is it possible? Should I sign such contract and deal with taxes and everything else myself or they HAVE TO pay everything for me?
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Old 03.09.2021, 13:21
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Re: Contract work - taxes and stuff - advice

Are you already living in Switzerland ?
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Old 03.09.2021, 13:52
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Re: Contract work - taxes and stuff - advice

Yes, I live in Switzerland with permit B
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Old 03.09.2021, 14:39
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Re: Contract work - taxes and stuff - advice

If you work as an external consultant, the client usually pays your fee to a payroll company, agency or umbrella company, which is now your employer. From this fee is deducted an admin fee.
Then, they deduct employer mandatory payments.
This leaves your gross wage.
They deduct any tax at source, and other employee payments.
The rest goes into your bank account and you can spend it.

When you work as an employee, your client is now your employer. The amount they say they'll pay you is your gross wage..
They pay employer mandatory payments. You don't see these.
From your gross wage they deduct any tax at source, and other employee payments.
The rest goes into your bank account and you can spend it.

As a consultant, you pay the employer deductions.
As an employee, your employer pays the deductions.

From this you can see, that if you're working as an external consultant, you should be asking for an uplift, so that the gross wage you get is the same as the gross wage you'll get when* you become their employee.


* if...
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Old 06.11.2021, 14:21
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Re: Contract work - taxes and stuff - advice

Can one legally take work for a few months and get paid directly? Is there a limit to what one can earn this way? Know that AHV will have to be compensated. What else must be considered?
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Old 07.11.2021, 00:27
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Re: Contract work - taxes and stuff - advice

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Can one legally take work for a few months and get paid directly? Is there a limit to what one can earn this way? Know that AHV will have to be compensated. What else must be considered?
If a company is will to pay you gross, you can do it for as long as you like and you should be able to avoid any AHV obligations as well!

The company paying you though will have a hell of a time, because your lawyer will argue that you are entitled to assume that the amounts paid were net and that they are responsible for all social insurance obligations and furthermore that they correctly handled your pension as well.

I was involved (as an expert witness) in case in Basel a few years ago now and the 'external employee' was successful arguing on that basis.

At this stage though I very much doubt there are many companies around that are not aware of the risks involved.
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