Have you ever dreamed of living abroad? Would your Swiss employer be prepared for you to remain employed while you travel the world or would your employer like to send you abroad? We will show you what options are available and what you need to bear in mind.
Moving abroad with a Swiss employer – for many, this is a dream that promises adventure with financial security. Particularly with regard to pension provision (OASI and pension fund), health insurance and taxes, there is a lot to consider to ensure that there are no nasty surprises later on. We have summarised the basic information in this article. However, it is best to seek advice and speak with us:
Place of work in Switzerland – place of residence abroad
Your employer may be prepared to continue employing you, but only if you work entirely or mainly in Switzerland. Perhaps your dream is to live in a neighbouring EU country and you would like to commute regularly between your Swiss place of work and your foreign home. If your place of work is still in Switzerland, you will continue to be subject to social security contributions in Switzerland, i.e. you will continue to pay into the OASI and pension fund and also retain Swiss health insurance. Nothing will change for your employer in terms of social security contributions, which may make it easier to convince your employer. What will change is the amount of your health insurance premiums if you live in the EU/EFTA. There are also changes with regard to taxes. There are special cross-border commuter regulations for certain countries, including France and Italy. In principle, the Swiss employer must deduct withholding tax for employees who work in Switzerland and live abroad. The double taxation agreements provide information on how the country of residence deals with taxation. As a rule, the tax already paid in Switzerland is at least credited against the tax owed in the country of residence.
Things get a little more complicated if you work from home temporarily (teleworking). Up to 25% telework is permitted throughout the EU/EFTA without changing your social security status. If you work from home for more than 25% of your workload, you need to be careful. Following the coronavirus pandemic, many countries have adapted the 25% rule and allow up to 49.9% of the working hours to be worked from home on request. You can find out which countries allow this here.
Place of work and place of residence in the EU/EFTA
Is commuting not your thing and would you like to work from your new home? This does not preclude you from being employed by a Swiss employer. There are various options. Let’s start with what is probably the most common case. The Swiss employer employs you in accordance with the law of your country of residence. In this case, you are subject to social security contributions in your country of residence. The employer is therefore faced with the challenge of paying social security contributions for you in your country of residence. There are specialised companies that can do this for your employer. The employer can also delegate the payment of contributions to you. However, the employer is still liable for ensuring that the social security contributions are actually paid correctly.
In addition to ‘local employment’, a foreign posting is also conceivable. Here, too, the coronavirus pandemic has led to a rethink. In certain cases, a posting to an EU/EFTA country for 100% telework is now possible for a maximum of two years. In this case, you remain subject to social security contributions in Switzerland for the duration of the posting, i.e. you retain Swiss health insurance and continue to pay into the OASI and pension fund. A posting is also possible, for example, if you work in a foreign branch of your employer.
It is not recommended that you simply allow your employment contract to continue and pay social security contributions in Switzerland as if the move had not taken place. You can only do this with the expat status of a posted person, which must be applied for within a fixed period and approved by the OASI. Otherwise, your employer runs the risk of attracting unpleasant attention during an OASI inspection and a correction may be made, which can result in a high administrative burden and repayments.
The situation can become really complicated if you have several employment relationships in Switzerland and in the EU/EFTA area at the same time, perhaps even as a self-employed and employed person. Here it is important to check exactly which social security system applies.
As a rule, you are liable to pay tax in your country of residence – despite having a Swiss employer – at least if you live abroad for more than six months and work from there.
Place of work and place of residence in the rest of the world
If your place of work is a sandy beach in the Caribbean or the Namibian desert, or somewhere outside the EU/EFTA, then slightly different rules apply. Make sure that your visa allows you to work. And beware: working from home is also work in your country of residence. In an increasing number of countries, there are digital nomad visas for people who work online for a foreign employer. If there is no such visa, you will need a regular work visa. Even outside Europe, it is in many cases possible that your employer, although based in Switzerland, will employ you in your country of residence in accordance with local conditions. In this case, working conditions and social security contributions are governed by the law of your country of residence. It may be possible for you personally to join the voluntary OASI scheme.
If your employer wishes to post you, the first step is to check whether there is a social security agreement between your future country of residence and Switzerland. Social security agreements normally also regulate the posting, including its deadlines and duration, and release you from the social security obligation in the receiving country. The social security obligation remains in Switzerland during the posting. If there is no social security agreement or if the official posting period has expired, Swiss law provides for the possibility of continued OASI insurance. This works in a similar way to a posting, but requires that you have been insured under the OASI scheme for the last five years immediately beforehand and does not release you from social insurance obligations in your country of residence. This means that continued insurance often means that you are subject to social security contributions both in Switzerland and in your country of residence and therefore pay contributions twice.
If you live abroad and work abroad, you are generally liable to pay tax for this work in your country of residence, exceptions confirm the rule.
Work sometimes here – sometimes there
You remain employed by your Swiss employer and work wherever you happen to be, whether on a sailing ship, in a camper van, hotel room or holiday flat? From a Swiss point of view, this is in principle permissible, but you must also clarify and comply with the rules in the country in question. Please also remember that a tourist visa does not usually allow you to work. If you keep travelling and do not stay anywhere longer, then even if you deregister from the Swiss municipality, your civil domicile remains in Switzerland, with the consequence that you remain liable for social security and tax in Switzerland. You must be able to prove to the Swiss social security and tax authorities at any time that you have not established a domicile outside Switzerland.
Are you interested? Do you have any questions? Do not hesitate to contact us.
You can read tips for employers in our next blog article.