Hiring your first employee in Geneva: social charges, insurance and obligations

Hiring your first employee is a crucial step in the life of a Geneva SME. But it comes with an impressive number of legal, social and administrative obligations. Between social insurance, salary deductions, registration deadlines and required declarations, a director can quickly feel overwhelmed. A mistake in the first payslips can lead to back contributions and penalties. Here is a complete guide to approach this step calmly.

The first obligation concerns social insurance registration. As soon as you hire your first employee, you must register with the AVS compensation office in the canton of Geneva. In Geneva, the most common offices are CLAF or FONCIA. This registration must take place within 30 days of hiring, under penalty of a fine of up to CHF 10,000. AVS/AI/APG contributions amount to 10.6% of gross salary, split equally between employer and employee (5.3% each). For a salary of CHF 60,000 per year, the total AVS charge is CHF 6,360, or CHF 3,180 for the employer.

Occupational pension provision (LPP) is mandatory once the annual salary exceeds CHF 22,680 (2025 threshold). The coordinated salary, which serves as the calculation basis, is obtained by subtracting the coordination deduction of CHF 25,950 from the gross salary. LPP contributions vary according to the employee's age and the chosen pension plan, but average 7 to 18% of the coordinated salary, shared between employer and employee. The employer must finance at least 50% of the total contribution. Choosing the pension fund is a strategic decision: some offer tailored plans for SMEs with appropriate rates and benefits.

Accident insurance (LAA) is also mandatory for all employees, regardless of working hours. The employer must insure staff against occupational and non-occupational accidents with Suva or a private insurer. Premiums for occupational accidents are entirely borne by the employer, while those for non-occupational accidents are shared. The rate varies by industry: from 0.1% to 10% of salary. On average, budget 1 to 2% of gross salary for full coverage. Loss of earnings insurance for military service (APG) is also mandatory.

Beyond social contributions, the employer must respect minimum wage obligations. In Geneva, collective labour agreements (CCT) in certain sectors impose minimum wages and specific working conditions. In the absence of a CCT, the salary must comply with industry practices and federal law. The 13th salary is mandatory in most cases. The employer must also keep working time records for all employees (Art. 46 OLT 1) and issue annual salary certificates for tax purposes.

Don't forget maternity allowance and parental leave. In Geneva, female employees are entitled to 14 weeks of maternity leave with allowance (80% of salary, capped at CHF 220 per day), financed by AVS contributions. Since 2021, paternity leave is 2 weeks (CHF 200 per day). Failure to comply with these obligations exposes the employer to sanctions and legal proceedings. It is recommended to take out daily sickness benefit insurance to cover long-term absences.

At MVO Fiducia, we support Geneva SMEs in all hiring-related steps: calculation of social charges, fund registration, payslip preparation, annual certificate management and tax declarations. Our 'First Employee' package lets you manage this transition smoothly. Contact us for an initial no-obligation meeting.