Remote working has hit us and is probably here to stay in the post-Covid, post-Brexit world. In this article, I will cover how this affects those working for a Swiss employer, but much of the material will be relevant to remote working elsewhere. As usual, you should take advice for your specific circumstances.
When working for a Swiss employer and being resident in Switzerland, the standard rules apply: you pay social security in the work country and taxes are deducted at source by the employer unless you are a Swiss national or a C permit holder. In the case of cross-border workers with G permits, the rules vary canton-to-canton, and I can send you a set of examples.
When a Swiss employer engages a worker to work outside Switzerland, the usual rules are that taxes and social security of the residence country are applied. The logistics demand either that the Swiss company has a local presence, is registered as a foreign employer in the residence country or engages an employer of record or a ‘portage salarial’, in France.
But what happens when there is a mixture of days spent in Switzerland and the country of residence?
Within the EU/EFTA, if one works mainly, i.e. 25% or more in the state of residence irrespective of the employer’s country, social security is due. A full-time employee who works two days a week in France and three days a week in Switzerland must account for social security in France.
The authorities are alive to the new reality and are negotiating a way out of this. In June 2022, the EU Administrative Commission responsible for such matters agreed on a flexible arrangement until 1st January 2023 so that some share of remote working is possible without changing where social security is due outside of Switzerland.
Besides social security, there is the question of where taxes are due. In most cases, taxes are due in Switzerland, and local taxes in the residence country is not the affair of the Swiss employer. There are cantonal variations, but we will not go into this here.
Switzerland only has the right to tax days worked in Switzerland. This can lead to a double burden or at least complexity as double tax treaties usually act to avoid taxing the same income twice. Very often, unilateral double tax relief does the same.
The case to avoid is where Swiss employers are obliged to withhold Swiss taxes and taxes in the residence country.
There is more than social security and taxation to think about. We must also consider employment law, Collective Labour Agreements, minimum working hours, Equal Treatment and Equal Pay, Data Protection, Insurance, Accident Insurance, Sickness cover Health provision and workers’ compensation.
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