Understanding Swiss Social Insurance

Here's a list of common abbreviations used on the social insurance components in Global Payroll for Switzerland.

Contributory membership in national social insurance funds (such as AHV, IV, and EO) is mandatory for employers. You deduct social insurance contributions for those domestic and foreign employees with mandatory insurance coverage and transfer them to compensation funds in accordance with statutory requirements.

You specify the applicable prorated percentage rates for both the employer and the employee. When a new employee is hired, record his or her Social Insurance number.

At the end of prescribed pay periods, calculate the contribution amount, if the insurance provider hasn't already calculated it. Then transfer the amount to the respective provider.

The same procedure applies to unemployment insurance (ALV). For both types of insurance, deduct the employees' insurance percentage rate from their pay.

At the end of the year, total the paid earnings and then submit a complete list of employees with mandatory insurance coverage to the insurance providers. This list must include every employee's AHV number, total gross earnings, and the length of employment with the company.

If your company has a statutory requirement to make payments to a family allowance agency (FAK), transfer, depending on the canton, family allowances to employees along with their pay. Transfer the agreed percentage of the earnings subject to AHV to the FAK.

Deduct pension contributions in accordance with federal statutes governing pension funds (BVG) and, in some cases, transfer these contributions to a supplementary pension fund.

In accordance with federal statutes governing accident insurance (UVG), you must insure your employees against accidents with the SUVA or another accident insurance provider. Calculate the mandatory insurance contributions and transfer them to the insurance provider. If your company pays all or part of an employee's non-employer liability insurance premiums (NBU premiums), calculate no employee deductions, or only prorated deductions, depending on the program.

When you perform the respective calculations for these procedures, you create the prescribed reports and route them to the employee or to the responsible authorities.

You can enter tax and social insurance data after the following information is set up:

• System tables and social insurance tables.

• FAK data and percentages.

• Source Tax tables and data.

• Child Allowance table.

• Municipality table.

• Insurance providers.

• Scale codes for continued payments.

This section explains the override options for social insurance. Global Payroll for Switzerland enables you to view the percentage and/or status of AHV/ALV, UV, PK, and FAK at three levels:

• First level—the social insurance system. The PeopleSoft system delivers a social insurance setup, which you can't edit because it's statutory.

• Second level—the company. You must set this level when you implement Global Payroll for Switzerland. It's an editable field that you can override.

• Third level—the employee. This is also editable.

You can override some values, such as eligibility status, at company or employee level. The following table displays whether information is available at each level.

The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Switzerland. Instructions for running the query are provided in the PeopleSoft Global Payroll PeopleBook.