Special case
Employing someone who already draws an AHV pension
You may employ a pensioner perfectly normally - no permission needed. Three things on the payslip change, though, and one of them saves you both money.
Can I employ her at all?
Yes, exactly like anyone else. No permit needed.
AHV contributions?
Only on the part above CHF 1'400 per month.
Unemployment insurance and pension fund?
Both fall away entirely.
Accident insurance?
Stays in full, on the whole wage.
You can employ someone past reference age perfectly normally. Exactly three things change on the payslip: AHV contributions only apply to the part above CHF 1'400 a month, unemployment insurance falls away entirely on both sides, and there is no longer any pension-fund obligation. Accident insurance continues unchanged on the full wage.
- Allowance of CHF 1'400 a month or CHF 16'800 a year - and it applies per employer, not in total.
- ALV disappears: neither of you pays the 1.1 per cent any more. In exchange there is no unemployment benefit either.
- She may waive the allowance - which can still increase her pension.
This applies when
Your household employee has reached AHV reference age and keeps working.
Employing a pensioner: what actually gets settled?
Set the monthly wage - you'll see the AHV allowance and the difference vs an employee of working age.
Past reference age
AHV/IV/EO (5.3%)
CHF 5
ALV (1.1%)
each, employer and employee side
Before reference age
AHV/IV/EO (5.3%)
CHF 80
ALV (1.1%)
CHF 17
each, employer and employee side
💰 Together you save CHF 181/month in contributions
= CHF 2'177 per year, compared with an employee of working age
- The allowance applies per employer - several households, several allowances.
- No more ALV contributions, no BVG obligation past the reference age.
- Accident insurance (UVG) remains mandatory.
- The pensioner can waive the allowance so contributions still improve her AHV pension.
Clino applies the allowance automatically
Registration, payslips and the pensioner special case - all set up correctly.
What changes on the payslip
AHV: only on the part above CHF 1'400
Once reference age is reached, AHV contributions only apply to wages above CHF 1'400 a month - CHF 16'800 a year. If she earns CHF 1'000 a month with you, no AHV contributions arise at all. If she earns CHF 1'800, only CHF 400 is charged.
ALV: falls away completely
From reference age the obligation to contribute to unemployment insurance ends entirely (Art. 2 para. 2 lit. c AVIG). Neither you nor she pays the 1.1 per cent. The flip side: there is no entitlement to unemployment benefit any more either.
Pension fund: no longer compulsory
Mandatory occupational provision ends at reference age. Even if the wage is above the entry threshold, you no longer have to register her. Voluntary continuation is possible with some funds, but it is not your obligation.
Accident insurance: exactly the same
Nothing changes here. Occupational accidents from the first hour, non-occupational from eight hours a week with the same employer, both on the full wage - with no allowance. This is the most common mistake: applying the allowance to the accident premium as well.
The allowance applies per employer
If she works for several families, she gets the allowance with each of them separately. Three households at CHF 1'200 a month each means CHF 3'600 of wages and still no AHV contributions. That is intended, not a loophole - so you do not need to know what she earns elsewhere, and you may apply your allowance in full.
Anatomy
What her payslip looks like now
Payslip
M. Bernasconi, past reference age
Only the part above the allowance of CHF 1'400 per month is subject to AHV. On a CHF 1'800 wage, CHF 400 is settled.
Unemployment insurance ends at the reference age, on both sides.
No more pension-fund obligation, not even above the entry threshold.
Accident insurance knows no allowance. It keeps running on the whole wage - the most common mistake.
She may waive the allowance - and sometimes that pays
Since the AHV 21 reform she can decide whether AHV contributions should be paid on the wage below CHF 1'400 after all. It sounds counterintuitive but can add up: contributions after reference age can close contribution gaps and raise the pension, up to the maximum pension. She can request a one-off recalculation of her pension taking into account income earned after reference age.
Who this is interesting for: anyone who spent years abroad, or whose pension is reduced because of missing contribution years. She tells you, the employer, about the waiver, at the latest before the first wage payment after reference age. It cannot be made retroactively. It applies separately to each employment and stays in place until she changes it. What pension will she have?
What does not change
Quite a lot, and that is the more important half: employment contract, wage floor, holiday entitlement, public holidays, notice periods, continued pay during illness - all exactly as for any other employee. Drawing a pension is no reason for worse conditions, and the allowance is not permission to pay less. It lowers the social contributions, not the wage.
What the allowance changes for your actual wage is what the household-help cost calculator shows to the franc. And the registration itself follows the same route for a pensioner as for any other household help: how to register household help.
Common questions
Do I have to tell the compensation office?
Yes. The office does not automatically know your employee has reached reference age and will otherwise keep settling as before. Report it actively so the allowance is applied from the right month. Overpaid contributions can be reclaimed, but that is effort you can avoid.
From when exactly does this apply - from the 65th birthday?
From the month after reference age is reached. Today that is usually 65, but women born between 1961 and 1963 have a transitional reference age between 64 years and 3 months and 65 years under AHV 21. If in doubt ask the compensation office for the exact date - guessing does not pay here.
She draws an IV pension, not the AHV. Does this apply too?
No. The allowance only applies from AHV reference age. Someone drawing an IV pension and working alongside it pays contributions perfectly normally - and remains liable for ALV too.
Is it actually worth it for me as an employer?
Your wage overheads drop noticeably: no more ALV, and AHV only on the part above the allowance. The family-allowance (FAK) contribution also runs only on that part. At CHF 1'200 a month there is therefore no AHV, no FAK and no ALV, and practically only accident insurance remains. But that is a side effect, not a reason to prefer someone because of their age.
Do I have to insure a pensioner against accidents?
Yes. Accident insurance has no age limit: occupational accidents from the first hour, non-occupational from eight hours a week with you, both on the full wage with no allowance. Without a policy, the substitute fund (Ersatzkasse) covers an accident and charges you the premiums afterwards (Art. 95 UVG).
Is there an upper age limit?
No. You may also employ someone aged 70 or 75, and the allowance keeps applying for as long as she works. The same rules apply as from the first month past reference age.
Does the employment contract end automatically at reference age?
No, not by law. An open-ended contract simply continues unless you expressly agreed an end date. Whoever wants to end it gives notice with the normal period.
Sources
Allowance and waiver
The allowance of CHF 1'400 a month or CHF 16'800 a year, and the rule that with several employers it applies separately to each employment relationship, come from the AHV/IV information centre. The option to waive it, and the one-off recalculation of the pension including income earned after reference age, come from the AHV 21 reform. How and by when the waiver is declared is set out in AHV leaflet 2.01 on wage contributions to AHV, IV and EO.
ALV and occupational provision
The obligation to contribute to unemployment insurance ends at reference age (Art. 2 para. 2 lit. c AVIG). Mandatory occupational provision ends there too. Accident insurance knows no such boundary and continues on the full wage.
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Clino applies the allowance automatically
You only state that your employee has reached reference age. Clino deducts the allowance, drops the ALV, treats the accident premium correctly on the full wage, and produces the statement the way the compensation office expects it.
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Salvador Jovells, founder of Clino