Minimum wage in Switzerland? What you need to know

TransferWise
07.18.18
8 minute read

Switzerland has vibrant cities, a refreshing natural environment, and some of the highest standards of living on the planet. It’s no surprise that it’s a popular expat destination. Maybe you’re thinking of heading there to work a ski season as part of a gap year, or perhaps the prospect of fantastic career opportunities has tempted you to settle permanently.

Whether you’re planning on a quick stay, or in for the long haul, life in Switzerland is notoriously expensive. But in general, salaries are high, too. In 2017, Switzerland was rated as the best-paid place in Europe for entry level and mid-career professionals, for example. And salaries across the board, even in the sectors which attract lower pay overall, are still very healthy. Whatever you’re thinking of doing for money while you’re there, it’s important to understand the likely wage you can earn - and of course how that balances with the cost of living.

This guide tells you all you need to know about how minimum wage levels are set in Switzerland, how they compare to the costs of living there and minimum wages elsewhere in the world.

What’s the minimum wage in Switzerland?

Interestingly, there’s no national minimum wage in Switzerland - although cantons are free to set their own laws, and one is currently looking to enforce a minimum wage. More on that later.

When it comes to Switzerland as a whole, there was actually a referendum in 2014, which proposed the introduction of a CHF22 national minimum wage. It's the equivalent of over USD22, or just about EUR19, far higher than the minimum wages on offer in the rest of Europe or North America. However, the vote rejected this move decisively. One important reason given was that the majority of people already earned above this level in Switzerland, making the measure unnecessary.

That said, the canton of Neuchâtel is currently implementing a minimum wage set at the slightly lower CHF20. This proposal was first made in the canton in 2011 and has been delayed due to challenges in the courts. However, the case was finally resolved in the summer of 2017, when the Swiss Federal Court rejected the objections at the appeal stage. This means that the canton will implement the minimum wage retrospectively from August 2017, but with enforcement only beginning in 2018, to allow employers to adjust. The canton estimates that a relatively small number of people will benefit from the minimum wage. However, this might show that the debate about wages in Switzerland hasn’t quite gone away yet. Another couple of cantons - Jura and Ticino - have also voted to introduce a minimum wage, but not yet started the process of setting or enforcing it. The cantons of Geneva, Vaud and Valais have rejected the idea, though.

Despite the failure to introduce a standardised minimum wage in Switzerland, there are already protections for workers. One element of this is collective agreements which are in place across some sectors, and can cover minimum salaries.

Collective agreements are made by employers and trade unions and may be on a company, industry, regional or national level. This means that in effect, there are minimum wages in some, low-income industries and jobs.

The national government also maintains the right to enforce standardised employment contracts, which would cover minimum wage, if they believe that an employer is undercutting wages. This approach offers a degree of protection for workers, to make sure that they’re paid fairly for the work they do.

You can check if your job is covered by a collective agreement, either by talking to your employer or by checking the relevant agreements online. You just have to enter the details of the region you live in, and the site will pull up the range of agreements which apply. You can then check if any of them cover the type of work you do.

If you don’t work in a business or industry with a collective agreement in place, then there’s no minimum wage set out. You have to agree to the salary you’ll earn directly with your employer. To help you achieve a fair wage, the Federal Statistics Office offers a whole range of detail and data about the salary ranges in different types of role and locations.

Who determines minimum wages?

Where minimum wages are used, usually they’re set by collective agreement. This is a process by which trade unions and company representatives negotiate and come to agreements which are then applied to the whole workforce.

Collective agreements can cover any aspect of working life, from pay to holidays and other benefits, working conditions, training and so on. They might be agreements which cover all employees in the specific role or sector, or they might only be applied if you’re a trade union member yourself. Collective agreements are powerful tools and offer strong protection for employees who might otherwise be vulnerable to unscrupulous employers. It’s worth doing some research to understand the agreements in place which cover your job and sector.

Is there a different minimum wage for apprenticeships or internships?

Because the collective agreements covering minimum wage are agreed by industry sector, this will vary depending on the area in which you work. In some areas, there are different salary levels for workers with different levels of experience.

A good example is in the hospitality and catering sector. Here there are different minimum salary levels set, for each year of an apprenticeship programme, and then with some variation depending on how long you’ve worked after graduating this training. There’s a different level for formal internships, too. Individual employers, of course, can pay above these levels - and often do because the employment market in Switzerland is very competitive.

What’s the living wage in Switzerland? How much can you really get by on?

When you’re working out the practicalities of your move, it's important to take into consideration the cost of living in Switzerland. The price of rent and regular daily costs can vary hugely depending on location. Switzerland is unusual in that cross-border commuting is fairly commonplace. That means that people will work in Switzerland but live just over the border in France or Germany, for example, where rents are cheaper. Even if they don't live outside the country, many people hop over the border often to shop and take advantage of the cheaper prices a short drive away.

Exactly what quality of life you can afford will depend a lot on what you like to do, and the place you choose to live. However, it's something of a balancing act because often you’ll find that the places with the best salaries on offer also come with the highest price tags. If cross-border commuting doesn't appeal then life can be much cheaper in more rural areas compared to the big cities, for those who can choose to live anywhere.

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However you choose to live, your new life in Switzerland won’t be cheap. It’s worth taking some practical steps to make sure your money goes further. One common expat challenge is the cost of converting your cash to different currencies when you’re abroad. This is especially challenging for many people in Switzerland, who might choose to live or shop over the border in one of the neighbouring countries like France or Germany. Here prices are cheaper, but the different currency can make it complicated - and unnecessarily costly.

That’s because, if you need to frequently change your money between currencies, the fees and charges applied to your conversion can quickly mount up. But the exchange rate used is just as important when it comes to making sure you don’t get ripped off.

Not sure if your bank uses a fair exchange rate? It’s easy to check with an online currency converter. Just compare the difference between the real exchange rate for the day, and the one they’re offering you. And it’s especially important to check if your bank or exchange service says that they offer currency exchange with low or no fees. You can be sure that they still have to make a profit. In this case, instead of listing a transparent fee, they mark up the exchange rate and take the difference as their profit.

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You can transfer your money electronically to an account held in another currency with only a fair, transparent fee. It usually works out cheaper than traditional services, because while most money transfer services have high charges for international transfers using the SWIFT system, TransferWise does things differently than banks. By avoiding the costs of using SWIFT, TransferWise can pass on the savings to customers.

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If you change your cash between different currencies frequently, a borderless multi-currency account could be both cheaper and less of a hassle. It’ll make life a whole lot easier if you’re a cross-border commuter, for example.

You can keep your cash in any one of dozens of different currencies, check your balance at a glance, and switch between currencies when you need to. Whenever you choose to change your cash, you’ll always get the real exchange rate, and you’ll just be charged a fixed, low fee.

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Compared to other countries, is the minimum wage in Switzerland good?

Of course, all over the world, different countries take different approaches to minimum wages. Many countries have national minimum levels set in law, regardless of the job or sector you’re working in.

So how do wage levels in Switzerland look when set against the minimum in other countries across the world? Let’s use the proposed minimum wage of CHF22 as a comparison.

CountryUSAUKGermanyFranceSpainAustralia
Minimum RateVaries by state - from about CHF7.13 to CHF12.29CHF9.76CHF10.32CHF11.40CHF5.55CHF12.70

You’ll notice that the minimum wage, rejected by the Swiss because - in part - most people are paid above this level already, is 3 times the US Federal minimum of $7.25, and over double the German minimum wage. Not bad.

Of course, this is only a small sample - and the minimum wages in Switzerland are high precisely because life there is expensive.

Other countries apply their own rules on minimum wages which are suited to the local economy. For example, Singapore has minimum wages set by the government, but only across some low-income sectors, and applicable to Singapore nationals and permanent residents only. And then, in some other countries, there’s no minimum wage at all. Here employers and employees simply negotiate wage levels on an individual basis.

If you’re thinking of moving abroad for work it’s important to make sure you can balance the cost of living and the salary you’ll likely be able to achieve. In a costly country like Switzerland, this is even more important than ever. You can make a great start by figuring out ways to cut out unnecessary - and unfair - costs, such as excessive fees for your day to day banking. Then you’ll have more in your pocket to make the most of life in Switzerland.

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