Practicalities for the USI community

Social security and taxes

Note: the purpose of this article is to provide general information and it is therefore not legally binding. For full details please refer to the Swiss regulatory framework and to the internal rules defined in the Regulations on general terms of employment for academic staff at USI, or in the Regulations on general terms of employment for administrative staff at USI.

 

Switzerland has a solid and effective social security system, providing all citizens who live and work in the country with coverage for a wide range of risks.

The Swiss social security system is organised in five sections:

  • Old age and survivors' insurance (“Three pillar system”)
  • Health and accident insurance
  • Income compensation allowance in the event of service or maternity
  • Unemployment insurance
  • Family allowance

These different types of insurance offer protection in the form of pensions, unemployment benefits and family allowances, as well as paying for costs incurred through illness and accidents.

The benefits paid out by the different types of social security are in principle financed by contributions levied on income. For the health insurance, each person insured pays a premium.

Listed below:

  • detailed description of individual sectors;   
  • summary of income deductions for social security;
  • information on tax at source for foreign workers.

 

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  • Old age and survivors' insurance

    • ​First Pillar (mandatory)

    Old-age and survivors’ insurance (OASI / AVS*). It grants pensions of two basic types: old age pensions to people of retirement age, and so-called “survivors' pension” to spouses or dependent children of a deceased insured person.

    The First Pillar also includes Disabilty Insurance (DI / AI*) and Supplementary benefits (EL / PC*).

    More information:
    - Information Centre OASI / DI
    - ch.ch

    * Italian language acronyms
     

    • Second Pillar (mandatory only for citizens with steady income in Switzerland)

    Occupational benefit plan (BV / LPP*). Jointly-financed through employer and employee contributions, it is a supplementary insurance scheme. The benefits it provides in the event of old age, invalidity or death supplement the benefits disbursed by the First Pillar.

    All employees covered by OASI who receive an annual salary of more than 21,150 francs yearly are also covered by the OP scheme.

    The OP scheme at USI is managed by the Fondazione Ticinese per il Secondo Pilastro.

    More information:
    Information Centre OASI/DI
    ch.ch

    * Italian language acronyms
     

    • Third Pillar (optional)

    Private savings scheme on a fixed deposit account, subject to tax relief (available exclusively to Swiss residents).

    More information.

     

  • Health and accidents

    Health

    Health insurance is obligatory for all Swiss residents. This provides all insured persons with access to basic medical healthcare. In the event of illness, pregnancy or accidents, it ensures that medical treatment is provided when not covered by accident insurance. The insurance coverage is independently taken out by the person subject to the insurance.

    In addition, USI insures all its staff members against loss of income in case of long-term illness; the related insurance premiums are paid entirely by the Unversity.

    Accidents

    All employees who work in Switzerland are obligatorily insured against accidents and occupational illnesses. Accident insurance (LAINF*) covers damages that arise if insured individuals have an accident or suffer from an occupational illness. The benefits include medical treatment and financial support.

    The premiums for insurance for occupational accidents and illnesses are paid by the employer. The premiums for insurance for non-occupational accidents are usually paid by the employee.

    For employees working 8 or more hours per week (on a total of 42 hours/week), the employer pays the total amount of premiums and thus deducts the share due by the employee from his/her salary. For USI staff, the insurance is managed by SUVA and the deduction amounts to 0.647% of gross salary.

    For employees working less than 8 hours per week, the employer pays only a share that covers occupational accidents and illness: for non-occupational accidents and illness, employees should seek to have their own insurance, as appropriate. 

    * Italian language acronym

  • Income compensation allowances

    The loss of earnings compensation partially compensates for income loss resulting from the military or civil service duties.
    The law governing this scheme has since been amended to include maternity insurance (maternity allowance).

  • Unemployment insurance

    Unemployment insurance provides benefits in the case of loss of employment, forced reduction of working hours, lack of employment due to weather conditions and insolvency on the part of the employer. This insurance also pays for re-integration measures.

    All individuals in gainful employment are obliged to contribute to the unemployment insurance scheme with the exception of certain family members of individuals working in the agricultural sector and individuals who have reached retirement age. The self-employed are not covered by unemployment insurance.

  • Family allowances

    Family allowances are both a social security and family policy matter.
    The purpose of these benefits is to partially compensate for the costs of raising children.

    There are three types of family allowance:

    • child’s allowance 
    • education allowance
    • and birth/adoption allowance.

    Detailed information on family allowances at USI.

  • Deductions for social security

    • First Pillar and Loss of earnings compensation (AVS / AI / IPG*): 5,15%
    • Unemployment Insurance (AD*): 1,1%
    • Accident insurance (LAINF*): 0,647%
    • Pension fund (LPP*): varying
    • Tax at source, if applicable (see below): varying

    * Italian language acronyms

    All deductions are to be considered as permanent and therefore nonrefundable.

  • Tax at source

    According to Swiss fiscal law, paid employment and remunerated activities at USI are taxed at source for foreign workers (except permit C holders) and Swiss non-resident workers.

    The rate is set by the Cantonal tax authority (Divisione delle contribuzioni della Repubblica e Cantone Ticino) as is based on the salary and the personal situation of the employee.

    The tax deduction is definitive and therefore not subject to future redemptions.

    By March of the following year, the USI Human Resources unit issues the employee with a certificate indicating the amount of tax levied for the previous fiscal year.

     

     

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Updated on: 01/03/2018