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EXPLAINED: What is the 13th-month salary in Switzerland and how is it calculated?

Most companies in Switzerland pay wages to their employees based on a 13-month system. How does this work?

Swiss cash bills seen up close
Most employees in Switzerland receive the 13th salary. Photo: Fabrice Coffrini/AFP

Switzerland, as with most countries, has 12 official months in the year – so why do many Swiss employees receive a 13th payment? 

Swiss salaries are among the highest in the world, attracting many workers from abroad, even though the cost of living in Switzerland is high as well.

The 13-salary system is not part of the Swiss labour law, as it is in some countries, it is more a matter of custom.

However, if it is part of the employment contract, then the company is obligated to pay it. Currently, nine out of 10 employers do so.

The 13th salary is not a bonus

When you get hired by a company that uses the 13-salary system, it means that your annual earnings are calculated on, and paid out in,13 instalments rather than 12.

Some companies don’t pay a 13th month’s salary but will pay higher monthly wages (in 12 installments) instead.

Your annual income will still be the same, it just depends on how it is divided – by 12 or 13.

Why not just pay 12 salaries?

The idea behind this system is that the 13th instalment paid out in December (in effect, two months’ salary) will help pay for Christmas expenses and other end-of-year bills.

If half of the 13th salary is paid in July, it is to help bankroll summer vacation (although of course you are free to spend it on whatever you wish). 

READ MORE: What are the best and worst paid jobs in Switzerland?

Are you entitled to 13th salary if you miss work on certain days?

If the absence is justifiable and limited in time, then yes.

For instance, if you miss work due to illness, accident, pregnancy or maternity, military service, death in the family, or other important reasons defined by Swiss employment law, you are still entitled to compensation.

What if you don’t work a full year or are paid on an hourly basis?

If you start employment or quit your job during the calendar year, the 13th month payment is paid on a pro-rata basis, in proportion to the months spent in the company.  

As for hourly workers who are also entitled to a 13th salary, they are usually paid monthly. The hourly rate is then increased by 8.33 percent.

What about bonuses?

Bonuses are independent of the 13th salary.  

Swiss law doesn’t contain any provision that specifically deals with the bonus, which may consist of money, shares, stock options in the company, or other perks. It depends entirely on the goodwill of the employer.

Typically, this should be addressed in the employment contract.

SALARIES IN SWITZERLAND: In which sectors have wages increased the most?

Here you can see how much workers in Switzerland earn on average.

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Zurich versus Geneva: Which Swiss city is better for job seekers?

Switzerland’s two largest cities and their surrounding areas are where most employment opportunities can be found. This is what you should know about what each of these locations has to offer.

Zurich versus Geneva: Which Swiss city is better for job seekers?

While Zurich and Geneva are different in some regards, such as the language spoken there — Swiss-German in the former and French in the latter — the two cities also have some things in common.

For instance, both frequently feature among the most expensive cities to live in various international surveys.

The latest one, carried out by a global mobility organisation, ECA International, found that globally Geneva and Zurich were ranked in the third and seventh place, respectively, in a survey of 20 most expensive cities for international residents.

However, on the European scale, Geneva was placed in top spot and Zurich in third.

But what about their job markets? Where should you look for a job — in Zurich or Geneva?

Your search may depend on personal factors such the area where you already live (or want to live) and the language you speak.

If you are fluent in French but not so much in Swiss German (or high German), then the choice is clear (and vice-versa). Even if English may be the main language in the office, you will still heed to speak local language outside of work.

But if you are open to moving wherever good job opportunities are plentiful, regardless of language skills, which city / area should you opt for?

The Local asked Stephan Surber, Senior Partner, Page Executive – a sister company to Michael Page recruiter for some insight.

Which market is more attractive to qualified employees, and why?

“Both Geneva and Zurich provide considerable opportunities to skilled professionals”, Surber said.

However, according to the Michael Page Swiss Job Index, the number of advertised jobs in May was over nine times bigger for canton Zurich than for canton Geneva. 

Do both cities/region offer similar positions in similar industries, or are they different and if so, how?

“Both offer roles in key industries such as financial and professional services, as well as health and life sciences”, Surber said.

They typically differ from one another in the concentration of industries. For example, Geneva has a higher concentration of international NGOs such as the United Nations, the Red Cross and the World Trade Organisation, as well as commodity traders.

Zurich also has these sectors but is better known for its concentration of Swiss-based, international financial institutions such as UBS, Credit Suisse, Zurich Insurance and Swiss Re, among others.

Is there a difference in terms of salaries for the same jobs / positions in each city?

There is no significant difference for professionals, in salary and compensation levels, according to Surber.

He pointed out that salaries in all major Swiss cities are at similar levels, with differences typically occurring between major Swiss cities and smaller, regional areas, and within small to medium organisations.

Compensation levels also vary across industries and according to the level of experience and the type of role.

READ MORE: What is the average salary for (almost) every job in Switzerland

Demand is especially strong right now in sectors such as technology, healthcare and life sciences, as well as the private market industry.

For job seekers who are new to either city, Surber recommends building your professional network, for example by joining local chambers of commerce and / or professional associations.

These articles provide more information about finding work:

‘It’s competitive’: Essential advice for finding a job in Zurich

How hard is finding work in Zurich without speaking German?

Why finding a job in Switzerland is set to become easier
 

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