The urge for freedom is in every human being. More and more Swiss people, as well as foreigners

living in Switzerland, are pursuing freelance work. The Corona pandemic has even strengthened the

trend towards a freelance lifestyle. This work model is welcomed by companies in Switzerland. On the one hand, contracting companies know that freelancers can also work efficiently from home, and on

the other hand, there is an increasing emphasis on sporty organisational structures without bloated staffing levels. We look into the question: what do freelancers have to bear in mind in Switzerland?

Where does the term freelancer come from?

The author Sir Walter Scott (1771 - 1832) first used the term "freelancer" in his novel "Invanhoe". The writer used the term to describe medieval mercenaries and called them "free lances". In English today, the word "contractor" is often used as a synonym for freelancer. (Source: HRM Dossier No. 73, External Workforce Management, p. 24).

What is a freelancer?

There is no legally correct definition of a freelancer often referred to as a freelancer, a freelancer or a freelance "employee". It is not a protected job title and is therefore accepted in many sectors and activities. At least that is how it appears in professional life. A legal demarcation is fuzzy. Perhaps one can see it in such a way that the freelancer is considered a contractor who performs services for a

client.

What are the advantages of being a freelancer?

There are two main advantages that motivate freelancers. On the one hand, there is the time.

Freelancers can basically arrange their working hours themselves. Working in the evening or at the weekend is absolutely fine for freelancers, as they often pursue other activities during the day

(sports, childcare, side jobs, etc.). The second advantage of being a freelancer is the place of work. It is not in a grey office in a high-rise complex from the 70s. Freelancers work from home, in a

coworking office, in a café, on the train or occasionally at the client's premises. When time and place are organised by the freelancer in a self-determined way, the feeling of freedom can be experienced.

Another relevant advantage is the salary, wage or fee of a freelancer. Usually, the income of a

freelancer is higher than that of a permanent employee. This also results in disadvantages on the other side, which are described below. A rule of thumb says; the more qualified and the more in

demand his services are in Switzerland, the higher his freelance salary. In addition, the freelancer can negotiate his own salary and thus has full authority. (Exciting in this regard is also our blog article: Three pro tips for freelancers to negotiate successfully).

Is freelancing suitable as a re-entry for mothers?

Absolutely. This important advantage has hardly been mentioned in previous literature on

freelancing, which is becoming more and more important. As described above, freelancers are free to choose their time and place, which is optimal. Freelancing" is particularly suitable for mothers

returning to work or as a part-time job alongside childcare. The increased flexibility of the commissioning companies, the recognition of the home office as an efficient place to work and,

above all, the acute shortage of skilled workers favour this great trend! Important tip: The current BVG coordination deduction does not favour part-time jobs with a fixed monthly salary.

What are the advantages of companies working with freelancers?

The advantages for companies in working with freelancers are obvious. On the one hand, freelancers are usually hired for a certain project duration. During this time, freelancers are very motivated and give full throttle. Just like the motto: There is no traffic jam in the fast lane. Why is that? A good

freelancer hopes that there will be a follow-up job, which he or she will get. This means that he or she will have to do less self-commissioning. Many clients also appreciate the external expert

knowledge and the high willingness to compromise (especially regarding working hours) of

freelancers. Tip: As a freelancer, the above points are always good arguments in salary negotiations.

In Switzerland, it is true that start-ups in particular work with freelancers, as small organisations have always been consciously interested in lean, fixed-cost-friendly and trendy outsourcing. You can read about the advantages this brings for start-ups here: Clever start-ups go for payrolling.

What are the disadvantages of being a freelancer?

As we all know, there are two sides to every coin. The feeling of freedom and the desire for security do not always go hand in hand for freelancers. "Freelancing" means that you have to constantly sell your service in order to win orders. If there are longer gaps in orders, one's knees quickly shake. In addition, social security is insufficient for some freelancers. During illness or an accident, financial

losses can make life really uncomfortable. In addition, freelancers should make sure that they do not work for their clients as bogus self-employed, read our blog post on bogus self-employment. Another disadvantage is that you do not have a long notice period as a freelancer if a project is terminated prematurely. It can also happen that the freelancer has to wait a long time for his money, as long payment processes often cause delays.

Is it permissible to have several jobs as a freelancer?

Of course! Multiple employment is generally permissible. Two points are important from the

freelancer's point of view. On the one hand, it is important that the freelancer informs his employers about other employments. If the freelancer is a permanent part-time employee, he or she will hardly be allowed to do freelance work for a competing company. The duties of loyalty under labour law must be observed. It is also important that the freelance activities are always correctly accounted for with regard to taxes, AHV, etc.

How is the income as a freelancer to be taxed?

Income from freelance work must be declared for tax purposes as your main or secondary

occupation. If you freelance via a payrolling solution (based on temporary work in Switzerland) and

are therefore considered a dependent person, you will receive the salary statement for your taxes in Switzerland from the payrolling service provider. If you are taxed at source, the payrolling company (as your legal employer) will pay the taxes for you. The income from self-employment must be listed on the tax return. This value forms the basis for the subsequent calculation of social security

contributions. Separate your self-employment from your private expenses and be sure to keep two bank accounts.

Do freelancers have to pay AHV contributions?

The basic rule says: "All persons living or working in Switzerland must pay OASI contributions from 1 January, after they reach the age of 20, until retirement age (64 for women and 65 for men). This obligation starts at age 17 if you are already working and continues if you remain employed after retirement age. " (Source: www.ch.chpensionierung/altersvorsorge). If you are self-employed as a sideline, you are only liable to pay AHV contributions if you earn more than CHF 2,300.00 per year with your self-employment. Registration and declaration with the compensation office is not

necessary.

It makes sense to enquire directly with the AHV and describe your current situation. The AHV has various settlement options, which in turn have various assessment criteria. Don't get into trouble with the AHV. On the one hand, it is about closing possible pension gaps, avoiding back payments, excluding fines and preventing bogus self-employment.

If you work as a freelancer for the end client with a payrolling service provider (from a legal point of view the employer), the AHV is settled in a compliant manner and bogus self-employment is

eliminated.

Where else do you have to register as a freelancer?

If you are not employed and billed via a payroll solution (based on the personnel leasing system,

which is very well known in Switzerland), you must also register with the VAT register in Switzerland in addition to the AHV. This is obligatory for a turnover of more than CHF 100,000 per year. This is a realistic limit, especially if you want to work full-time as a freelancer. In addition, it is advisable that you register with a pension fund for your old-age provision. There are many web platforms that can

provide information for self-employed people as well as specialised RAV offices, such as the Fachstelle Selbständigkeit in Zurich.

What do you have to consider as a freelancer in Switzerland?

As a freelancer in Switzerland, you must pay particular attention to insurance coverage for various possible situations in life such as illness, accident, disability, death, orphan's pension, etc. Register your activity as a self-employed person with the compensation office. It is important to know that many of these preparatory activities are not necessary in the context of a payroll service for

freelancers, as they are part of the service offered by the payroll provider. You can eliminate the risk of bogus self-employment if you either obtain proof of self-employment from the AHV or offer your freelance services through a payrolling provider.