Financing of social insurances: Contributions from employees and employers

The financing of social insurance schemes for AHV, IV, and EO is done through contributions from employees and employers. Different rates apply for self-employed individuals.

Social insurances are largely financed by income contributions

Aside from income contributions, some social insurances also are funded through capital contributions, per capita contributions, public sector contributions, or by means of reclaim earnings.

Employers and employees significantly contribute to the financing of unemployment insurance, disability insurance, the AHV, and the EO. Employees who are not self-employed, meaning those employed by a company, make contributions in the form of percentage wage deductions. The employer directly deducts the dues for each insurance from the wages and transfers them to the respective entities. Furthermore, the employer also deducts contributions for occupational pensions from the wages, provided that it exceeds the coordination deduction according to Art. 7 para. 1 BVG. Additionally, premiums for non-occupational accident insurance should also be considered.

Contributions of the Employers

The contributions of employers in AHV/IV/EO are structured similarly to those of the employees. In addition, employers must also pay administrative cost contributions. The payments to the occupational pension must be at least as much as the amounts paid by the employees. Employers are responsible for paying the contributions for occupational accident insurance.

There are special regulations for self-employed individuals. They are only mandatorily insured in the social insurance branches AHV/IV/EO. Special contribution rates apply for these branches.