The gross wage corresponds to the salary before the deduction of the employee’s social security contributions. The employee’s social security contributions consist of the contributions to AHV, IV and EO, the contributions to the unemployment insurance (ALV), the non-occupational accident insurance (NBU) as well as the pension fund (BVG). If all these contributions are deducted from the gross wage, this results in the net wage, which is finally paid to the employee.
We generally recommend you fix the gross wage in the contract of employment, as it will be used as the basis for the calculation of taxes and social security contributions. As an employer you will benefit from the stipulation of a gross wage since changes in the social security contribution or the withholding tax rates will not only impact your employment costs but evenly affect both employer and employee.
For a detailed calculation of the employment costs of your domestic help we recommend our Wage calculator.
You will find more information on wage contributions in our glossary under the keywords «Net wage», «AHV contributions», «Withholding tax», «Accident insurance (UVG)» as well as «Pension fund (BVG)».