Social security charges increase as of January 1, 2020

Prélèvement à la source : quel impact pour les frontaliers ?

While the TRAF mainly concerns corporate taxation, this reform also has an impact on AVS contributions for both employers and the employees. Explanations:

Adopted by Parliament in September 2018 and accepted by the electorate on May 19, 2019, the Federal Law on Taxation Reform and AVS Financing (TRAF) has a double objective: to establish a competitive taxation system for businesses in conformity with international requirements and to stabilise the AVS to guarantee medium-term pensions. The reform intends to spend an additional 2 billion on AVS thanks to new tax provisions but also to increase AVS contributions… for the first time in 40 years!

AVS contribution rate increases by 0.3%

As of January 1, 2020, companies will see their social security costs increase. The AVS contribution will rise by 0.3% shared equally between employees (0.15 %) and employers (0.15 %). According to the Federal Department of Finance, this will provide additional AVS income of approximately 1.2 billion francs.
For the Canton of Geneva, an additional contribution of 0.07% of total salaries will be charged on January 1. This measure, which is entirely at the expense of the employer, is destined to finance early childhood services.

Revised rates for independents and non-actives

As stated by the FER CIAM, the AVS contribution rates and the contribution scales for independents and non-actives will also be revised. For independents, the maximum and minimum contributions rates will be increased (from 7.8% to 8.1% and from 4.2% to 4.35%) and the degressive scale will be modified accordingly.

Our Payroll CareDesk is at your disposal for any questions you may have.

Séverine Bovagne
Séverine Bovagne
Head of Absences, Payroll & HR Administrative Services CareDesks
Article published in october 2019