ALV Contributions in Switzerland: What They Are, Who Pays and How Filing Works
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The ALV contribution in Switzerland is part of every payroll, yet many employers don't know exactly how it works. Who pays what, up to what limit, and what applies in the case of short-time work? Here are the answers.
What is the ALV contribution in Switzerland?
ALV stands for unemployment insurance. The ALV contribution is the mandatory contribution that employers and employees jointly pay as a safeguard in case of unemployment.
ALV is mandatory: Anyone employed in Switzerland and subject to AHV contributions automatically pays ALV contributions. Self-employed individuals are not insured and therefore have no claim to benefits.
How Much Are ALV Contributions?
The contribution rate is 2.2% of the relevant salary, split equally:
- 1.1% employee
- 1.1% employer
The contribution obligation applies up to the annual maximum salary limit of CHF 148,200 (CHF 12,350/month). Salary portions above this amount have been exempt from contributions since January 2023 – the former solidarity percentage was abolished.
Who is exempt?
Exempt from the contribution obligation are family members working in agriculture (treated as self-employed farmers), employees who have reached the AHV reference age, and employees in voluntary AHV insurance.
What Employers Need to Know About Filing
ALV contributions are settled together with AHV, IV, and EO through the compensation fund – provisionally on a monthly basis, with a final settlement at year-end or upon an employee's departure.
The employer is responsible. If an employer fails to deduct the employee's share, they are liable for both portions. For short-time work, the full contributions on 100% of the salary must be paid; the employer's share is reimbursed by the unemployment fund.
Are you an LLC or corporation owner?
Then there's an important new development you should know about. Parliament has passed an ALV reform for entrepreneurs that, for the first time and under certain conditions, creates an entitlement to unemployment benefits for entrepreneurs in an employer-like position.
Questions about payroll or your social security obligations? We're here to help.
