KTG, UVG and BVG – Mandatory company insurances

KTG, UVG and BVG – Which insurance policies does an employer need?

If you are an entrepreneur or business owner in Switzerland employing staff, you are obliged to take out three central social insurance policies. KTG, UVG and BVG are not optional – they are legally required. Many expatriates and foreign nationals who establish or run a company are initially overwhelmed by these terms. Our adviser Branislav explains here what lies behind them and which contribution rates you can expect.

KTG – Sickness allowance insurance for employees

KTG (sickness allowance insurance) is an insurance policy that replaces a portion of your employees' wages during illness or accident. You must activate this insurance no later than the third day of work incapacity. The employer bears the costs – typically between 0.5 % and 2.5 % of the payroll, depending on the insurance terms and the scope of benefits.

Important: KTG is only mandatory for absences from the third day of illness onwards. You as the employer bear the first two days yourself (waiting period). Some companies also insure these two days additionally – but this is voluntary.

UVG – Accident insurance (mandatory and voluntary)

UVG (accident insurance) covers occupational accidents and occupational illnesses. As soon as you employ a worker for at least 8 hours per week, you must insure them against occupational accidents. The premiums vary depending on the industry and risk – on average they are approximately 1 % to 5 % of the payroll. According to suva.ch, Switzerland's leading accident insurance provider, approximately 90 % of all employees are protected by UVG.

There is also a non-occupational accident component of UVG (leisure time accidents) which you can take out voluntarily. This covers accidents during leisure time. Together with occupational accident insurance, UVG therefore offers comprehensive protection.

BVG – Occupational pension provision (pension fund)

BVG (Federal Law on Old-age, Survivor's and Invalidity Insurance) regulates your employees' pension fund. As soon as an employee reaches the age of 17 and earns an annual income of at least CHF 22,680 (as of 2024), you must enrol them in a pension fund. Contribution rates typically range between 7 % and 15 % of wages – the employer pays at least half, often 50 % or more.

BVG is your obligation as an employer towards old-age provision. Without BVG you cannot legally employ staff. According to bsv.admin.ch (Swiss Federal Office of Social Insurance), almost 3 million employees in Switzerland are insured through BVG pension funds.

The three insurance policies at a glance

It is sensible to distinguish clearly between the three insurance policies and to know the relevant deadlines:

• KTG: From the 3rd day of illness; employer bears costs (0.5–2.5 % of payroll)
• UVG: From at least 8 hours/week; protection against occupational accidents and illnesses (approximately 1–5 % of payroll)
• BVG: From age 17 and CHF 22,680 annual income; old-age and invalidity provision (7–15 % of payroll, minimum 50 % from employer)

Deadlines and registration obligations for employers

When you hire new employees, you must register them with the appropriate insurers within a short timeframe. For BVG, for example, registration is required no later than three months after the start of employment. For UVG you must register with the accident insurer before the employee starts work – otherwise fines of up to CHF 10,000 may be imposed.

Our adviser recommends handling these registrations immediately after hiring. Many new business founders underestimate these administrative obligations, especially when running a company in Switzerland for the first time. Book a consultation appointment to ensure that all your insurance policies are correctly registered.

Costs and contribution rates summarised

In total, employers must budget for the following overall costs: KTG (0.5–2.5 %) + UVG (1–5 %) + BVG (7–15 %, minimum 50 % employer contribution) = approximately 8.5 % to 22.5 % of payroll. The exact rates depend on the industry, operational risk and pension fund. For example, a construction company pays higher UVG premiums than an office-based business.

That is why a comparison is worthwhile: different insurers and pension funds have different rates. Our adviser can support you in choosing the optimal insurance policies and will show you where you can save money without compromising protection.

Common mistakes when taking out business insurance

Many new business founders make the following mistakes: they confuse KTG with the employee's private health insurance, they do not know that BVG is compulsory from CHF 22,680 annual income onwards, or they forget to register part-time employees at all. Another mistake is registering the insurance too late – this leads to repayments and administrative effort.

The most common mistake, however, is not obtaining professional advice. As a foreigner or newcomer, you are often unfamiliar with the Swiss system – and that is completely normal. Our services in the area of business establishment and insurance help you get everything right from the outset.

Your next step – making use of professional advice

The three mandatory insurance policies KTG, UVG and BVG are not negotiable – but you have scope when choosing insurers and pension funds. Our adviser has many years of experience advising entrepreneurs who are new to Switzerland. He explains to you in clear terms what you really need, what costs are realistic and how you can optimally protect your employees.

Book a free consultation appointment with Helpner – we will take time for your questions and show you how to fulfil all legal obligations whilst optimising your operating costs.