A recently published global cost of living index placed Zurich in 2nd place as the most expensive city in the world to live in, behind Hamilton, Bermuda.In fact, cities in Switzerland occupied no less than 6 of the top 10 spots in the recent Numbeo Survey. Given that information, those contemplating a move to Switzerland, might want to first check the salary bandwidths for “their” profession before packing their cases.
Economic Indicators
A 2020 Swiss wage structure survey, revealed the median salary for a full-time position in Switzerland as CHF 6’665. Indications show however, that to live comfortably in most Swiss cities a family of four would typically require a net salary of at least CHF 9’000 per month.
And with an average annual inflation rate of -0.7%, real wages actually increased by 1.5% during the same period. However, the big focus now in Switzerland is inflation – which reached 2.1% in March 2022, and although this is still lower than in many other countries, it still exceeds the target for limiting annual price increases to 0-2%. So how much can workers earn in Switzerland and what does this depend on?
Wages in Switzerland vary significantly
The first thing to note from the wage structure survey is that wages in Switzerland vary significantly depending on sector and region:
- Every 10th person in Switzerland continues to receive a low wage
- More than one third of employees receive a bonus and this is often considered an integral part of the wage component
- In 2020 the monthly gross median salary for a full-time role was CHF6’665 per month
- At the same time 10% of employees earned less than CHF4’382 per month
- And the top 10% of employees earned more than CHF11’996 per month
Industry sectors
The second note of importance taken from the survey is that depending on the type of sector, there are large wage differences. Best paying sectors now include IT, Finance and Pharmaceutical. Some of the average wages taken from the 2020 survey show:
In the top tier
- Information Technology – with an average salary of CHF9’206 per month
- Pharmaceutical – where average salaries are CHF10’040 per month
- Banking – with the highest average salary at CHF10’211 per month
In the middle tier
- Health sector – lowest paid average salary in this tier of CHF6’821 per month
- Machine industry – with an average salary of CHF7’141 per month
- Wholesale sector – where the average salary is CHF7’145 per month
The lower or bottom tier
- Retail trade – with an average salary of CHF4’997
- Hospitality – with an average salary of CHF 4’479 and a sector hard hit by Covid
- Accommodation – the lowest average salary at CHF 4,488
Recent Trends
- The wage gap, by sector and skill set remained stable between 2008 and 2020, with the general wage gap between highest and lowest paid basically remaining the same. Wage increases from 2008 – 2020 saw salaries of the highest paid workers increasing by 11.8% with lowest increases recorded with middle class workers at 9.3%.
- Bonuses were paid out to over 36% of workers in 2020, with an annual bonus value of CHF 10’142. This compares to 32% of workers receiving an annual bonus in 2018 with a value of CHF9’913.
- The value of the bonus paid out varies significantly and is dependent on the branch and on seniority:
- Banks paid on average CHF134’381
- Financial services paid on average CHF127’329
- Pharmaceutical paid on average CHF90’264
- Retail paid on average CHF23’097
- Upper management was paid on average CHF4’617
- Non-management bonuses were lower with an average of CHF3’998 paid
- Bonuses remain a flexible but integral part of the pay system in most industries.
Some Key Indicators
There are several key wage indicators that are worth mentioning. Some of these are economic, while others more social. When considering a job offer in Switzerland it is worth taking these into consideration.
- The proportion of low jobs remains unchanged at around 10.5% and the sectors with the low paid jobs are:
- Retail – 22.5% of low paid workers
- Leather and Shoe – 31.4% of low paid workers
- Hospitality – nearly half of low paid workers at 41.7%
- In 2020 nearly half a million people held low paid jobs with the majority of these being women (63.5%)
- Wage inequalities between women and men still exist but are gradually narrowing:
- The gender pay gaps can be partly explained by type of job and structural characteristics in terms of responsibility, workplace or sector.
- The median difference in 2020 stood at 10.8% (which compared to 12% in 2016 is an improvement).
- An important point to note here is that the higher the position, the greater the wage gap. For example, a woman in a position with a high level of responsibility earned CHF9’259 gross per month, while men at the same level received CHF11’116 per month – which corresponds to a difference of 16.8%.
Foreign employees
With one of the highest wage levels in the world, the term “wage dumping” is a phrase often heard when employers engage foreign workers. Switzerland has a dual system for issuing residence permits: a distinction being made between foreigners from EU/EFTA countries and third-country nationals. There are preventive wage controls only forthe latter group in Switzerland.
- The fact is though, the survey established that in Swiss economy salaries of Swiss nationals were higher than those of foreign employees (on average CHF6’988 vs CHF6’029).
- Conversely, in positions requiring a high degree of responsibility, the salary of foreign employees was generally higher than those of the Swiss employees.
- Cross border commuters in senior management received CHF10’692, those with a resident permit CHF12’268 and Swiss nationals only CHF10’364.
- For positions without managerial experience however, the situation was reversed.
Swiss Regions
- Zurich is still the highest paid area and salaries for senior management there are the highest at CHF11’475.
- Lake Geneva region ranks second at CHF11’200.
- CHF 8’537 for positions in senior management.
- CHF 5’137 for positions without managerial functions.
- The Italian part of Switzerland – Ticino – ranks lowest, regardless of hierarchy level.
Although the quality of life in Switzerland is among the highest globally, so is the cost of living. Cities from nearly all areas of Switzerland rank as the most expensive places to live in the world. Salaries on the other hand vary widely according to numerous factors. And before considering a job position in Switzerland, it is advisable to research first!
As Switzerland’s most trusted payroll provider, Accurity GmbH has over 20 years’ experience providing clients from all industry sectors with the best advice about their payroll, pensions and social security, thereby ensuring they make the right decisions. Focusing on core competencies is key and our expertise in all things payroll can help our clients achieve that. To be able to calculate the amount of tax you will pay in Switzerland, click this link to use our tax calculator: https://www.accurity.ch/sourcetax/
If you would like to speak with one of our team of experts, simply contact us now to see how we can make Switzerland easy for you!
