Swiss employers welcome COVID-19 measures related to payment of Swiss social security and pension contributions
The Swiss Federal Council (executive branch) has recently rolled out a series of extraordinary measures to help improve the liquidity position of Swiss companies during the COVID-19 epidemic. These measures include notably the possibility to defer the payment of social security contributions and an extended use of employer pension reserves.
To help Swiss employers during the COVID-19 pandemic, the Swiss federal council has decided on various measures, highlights of which you will find below.
Swiss social security payments
We have listed below possible options for employers who would like to either stop or change their AHV/AVS payments:
- Interest-free deferral of payment of contributions
As of 19 March 2020, the social security authorities have waived the calculation of interest on partial payments for 6 months. This applies to contributions to AHV/IV/EO and family allowances. Until the end of June 2020, the social security authorities will also stop sending reminders for unpaid contributions. The freeze on official debt recovery proceedings from 19 March to and including 19 April 2020 also applies to the debts to the Swiss social security administration.
- Instalment plan
Employers have the possibility of putting into place payment plan to pay past contributions in instalments.
- Adjustment of pre-payments
In cases, where the total wage is reduced due to hiring freezes or dismissals, the new estimated total annual wage can be communicated to the social security authority to adjust the amount of pre-payments
Swiss pension contributions
Starting 26 March, employers may temporarily use the employer contribution reserves they have set up to pay employee contributions to Swiss occupational pensions (2nd pillar) for a period of 6 months.
Swiss pension law provides the possibility to Swiss employers pay-in tax deductible reserves to the pension fund. These reserves can be used in times when money is tight in order to cover the payment of employer contributions. Exceptionally, during this period, employers can also use these reserves to cover employee contributions.
In order to take advantage of this possibility, an employer must inform their pension fund in writing of their intent.
These measures are part of a wider stimulus package that the Swiss Federal Council has taken to help companies with their liquidity position to enable them to navigate the crisis. Their impact and usefulness will likely vary depending on the size and scale of organisations.
Please contact our key contacts below if you would like to know more about these measures and if support is needed to benefit from them.
Explore our collection of Swiss COVID- Tax & Legal insights designed to help companies in Switzerland to better navigate the COVID-19 crisis.
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