Freelance Contracting in Switzerland

I'm not sure if the term "freelance contractor" is the official term. Often, you also hear "freelancer", "contractor" or "independent contractor". In any case, to my layman understanding such a person is an external workforce within a client company who has a limited-duration contract.

In essence,

• you have a limited-duration contract
• you are paid by the hour
• once the contract with the client company terminates, you are responsible for finding yourself a new project/client. During that "idle" time you will not be paid.

As far as I know there are the following ways:

1. through an agency, sometimes also called a recruiting or staffing agency
2. through your own company
3. through a payroll company
4. directly

1. Agency

   • You find a contractor job ad put up by agency X, apply to it, talk to agency X, have interviews with the client company, pass all the interviews. AND agree on an all-in-rate with agency X.
   • You are then employed by agency X. You have a limited contract with agency X. They take care of the administrative stuff such as social insurances, payrolling etc.
   • The agency X has a contract with the client company and offers you as a workforce to the client company.
   • At the end of the month, you tell agency X how much you worked. Agency X sends a bill to the client. Agency X takes part of the money and pays you according to how much you worked and your agreed-upon all-in-rate.
   • Note:
     • Most answers on this page are geared towards this type of employment.
     • Most contractors seem to be taking this path, at least in the beginning.

2. Own company

   • You find a client company who is interested in working with you.
   • You create your own company if you don't have one already (e.g. X GmbH) and are employed by X GmbH, hence you have a contract with X GmbH. X GmbH takes care of the adminstrative stuff.
   • X GmbH agrees on a rate with the client company. They set up a contract.
   • X GmbH offers you as a workforce to the client company. X GmbH sends a bill to the client after the end of the month.

3. Payroll company

   • You find a client company who is interested in working with you.
   • You agree on a rate with the client company
   • You find a payroll company X that takes care of the payrolling, social insurances for you... generally, all administrative stuff. They take a percentage of your rate, which should be quite a bit lower than the agency in the first case.
   • The payroll company has a contract with client company and offers you as a workforce to the client company.
   • At the end of the month, you tell the payroll company X how much you worked. Payroll company X sends a bill to the client and pays you your share.

4. Directly

   • As far as I know, bigger client companies usually don't hire contractors directly for a longer period of time. This has at least two reasons: Scheinselbstständigkeit and excessive paperwork.

Unless you are directly employed by the client, no. But:

• everything that an employer would pay for you, were you "normally" employed, is deducted from your rate/all-in-rate. Effectively, you are paying both, the employer and employee parts of social security and pension fund etc.
• once the contract finishes, you will have to find your next client/project yourself
• you're paid by the hour/day

Often between 3 months and 2 years. Contracts are often extended, but that depends on the project and the client company.

Job boards sometimes contain ads with rate ranges. As of 2022, for IT/software engineering this tends to be between 600 and 1050 CHF/day, at least that's what I've seen. However, the rate depends on your experience, how well you fit the desired profile, your negotiation skills and whether there is 3rd party between you and the client.

When you apply to a contractor job ad, you will get to talk to a recruiter. One of the first questions you will have to answer will be the "what's your rate?"-question? This rate is often called the "all-in-rate" and is the basis for your compensation calculation. The rate is after the agency has taken their cut, but before all the social security and pension contributions, employer and employee parts.

In a sense, it is the "gross gross salary".

That of course depends on your all-in-rate and how you are taxed.

If you are normally taxed (i.e. for Swiss citizens and C-permit holders), you get around 75% of the all-in-rate wired to your bank account.

E.g. if your all-in-rate is 800 CHF/day and you worked 20 days in a given month, you will receive around 800 * 20 * 75% = 12kCHF

If you are taxed at source, the tax will be calculated based on your gross salary and directly deducted. How much? That depends on a few factors, here a calculator.

That depends on the agency. When I asked the ones I had spoken to, I heard numbers between 8%-25%. Whether this is true, I do not know. However, this doesn't really matter, because this cut is taken before the all-in-rate you negotiated with the agency... and hopefully you agreed to a rate that you are happy with.

Yes and no.

• Yes, you will be paid while you are on holidays. (For me, this is up to 20 days)
• But no, because the money you are paid was deducted from your salary by the agency beforehand. So effectively, there is no paid leave since you are paid by the hour/day.

Legally, you have to take at least 20 work days of holidays per year. You will also see this in your contract. But the more interesting part is, that you can take as many days as the client/your team is ok with.

If you are not directly employed:

• Unemployment insurance: since you are employed either by an agency or your own company, you will be paying into the ALV
• Sickness/accident: I don't know if this is the norm, but I am paid 80% of my rate from the 4th day of sickness. So 3 days are unpaid.
• BVG: the 2nd pillar of the Swiss pension system.

See What about insurances?

I guess this is a somewhat subjective topic, but I see following points, which can be interpreted as pros or cons:

• You need to find your own clients/projects, but this gives you the freedom to cherry-pick
• Projects have a limited duration, i.e. you might have a down-time until you find your next client/project
• You can be "fired" much more easily. E.g. budget cuts will affect external workforce first. But you can also leave much more easily. Notice periods are shorter.
• You are the "external". Depending on the company/team this could lead to "weird" social situations, like not being invited to team events.
• You are paid by the hour/day. The days you are not working, you will not get paid, with the exception of longer sickness.
• (But) you have more flexibility/freedom time-wise.
• (Usually) no perks. I.e. no bonus, no equity, cantine food more expensive, no company-paid further education (Weiterbildung) etc.
• Because of the additional risks, the pay is usually better

Either through personal networks or via agencies/job search engines.

I imagine all sorts of companies, but in Switzerland they tend to be banks, insurance, tech or consulting companies. At least most of the demand comes from them.