Unemployment in Switzerland in 2025

Unemployment insurance in Switzerland

Unemployment Insurance (UI) is part of the basic social security in Switzerland. This insurance will help people who lose their jobs. This social insurance helps when you are in between jobs.

While it sounds simple on paper, there are many small yet essential points about unemployment in Switzerland. Therefore, I think it is crucial to cover it in more detail.

If you do not know about this benefit, it is essential to know about it to include it in your plan and maybe adapt your insurance coverage. While I do not wish anybody to become unemployed, it is much better to be prepared.

Contributions to unemployment insurance

Each employee in Switzerland will contribute to Unemployment Insurance. As of 2023, 2.2% of your salary (up to 148’200 CHF) will be going to unemployment insurance.

This 2.2% is paid half by your employer and half directly by you. You can look in your salary declarations, and you should see a deduction for this insurance.

Unemployment benefits

First, we should start with how much we get from unemployment benefits.

In general, you will receive 70% of your insured salary. The insured salary is your average salary during the last six months. If the average salary of the previous 12 months is higher, they will use it.

Your insured salary is made of your entire employment income:

• The base salary
• The 13th salary (if you get any)
• Any bonus you would get
• and so on

It is also important to note that the upper limit of the insured salary is the same as the upper limit for contributions. So, if your total salary is higher than 148’200 CHF, you will not get anymore than 148’200 CHF.

If you meet any of the following requirements, you will get 80% of the insured salary instead of 70%:

1. Having dependent children under the age of 25.
2. The monthly insured salary is less than 3797.
3. Your invalidity rating is at least 40%.

The second thing we must look at is how long you will receive the benefits. Indeed, there is a maximum duration after which you will not receive any more benefits. There are several different cases, each with a different duration.

1. 200 workdays if you are under 25 and without dependents and have contributed between 12 and 18 months.
2. 260 workdays if you are under 25, have dependents, and have contributed between 12 and 18 months.
3. 260 workdays if you have contributed between 12 and 18 months.
4. 400 workdays if you are under 25 with dependents and have contributed at least 18 months.
5. 400 workdays if you are older than 25 and have contributed at least 18 months.
6. 520 workdays if you are under 25, have dependents, have a disability pension, and have contributed at least 22 months.
7. 520 workdays if you are older than 25 with a disability pension and contributed at least 22 months.
8. 520 workdays if you are 55 or older and have contributed at least 22 months.

So, the most you can receive unemployment benefits is two full years.

It is also essential to know that there is usually a waiting period between 0 and 20 days. The duration depends on your income and whether you have dependents.

In some cantons, you will be asked to choose an unemployment fund. Several funds pay unemployment benefits. It may be worth checking them out before picking since some are easier to worth with than others.

Conditions to receive unemployment benefits

To receive unemployment benefits in Switzerland, you need to meet a few conditions:

1. You became entirely or partially unemployed.
2. You have been employed for at least 12 months in the last two years.
3. You are a Swiss resident.
4. You are more than 15 years old.
5. You are younger than the official retirement age.
6. You are not receiving a retirement pension.

There are some exceptions to these rules, but generally, unemployment offices are pretty strict about enforcing them.

On top of that, you need to do a few things to stay eligible while unemployed:

1. You must be ready to accept a job that matches your profile.
2. You must have started looking for a new job during the notice period.
3. You must be sending applications regularly.
4. If suggested, you must attend courses to improve your employability.

You should record your search (all applications and rejection letters). The local unemployment office will request them. It is better to be thorough and on top of it when dealing with them. You should also save all your emails and organize all your correspondence properly to make it easy to review.

Once you have found a job, you need to be careful to continue sending applications for other jobs until the beginning date. This is important because failing to do so may result in a penalty.

Penalties

Knowing that the unemployment office can give you penalty periods is essential. During a penalty period, you will not receive any unemployment benefits. This is important to know because it could put you in trouble if you end up in this case.

The primary source of penalty is if you quit your job yourself. This could delay your benefits by up to 60 working days. So getting a new job before quitting your current one is very important.

You can also get penalties during unemployment if you do not do what the unemployment office requires. For instance, they could penalize you if you do not send enough applications. Or, if you refuse a job they propose, you could have another penalty.

In many cases, penalties are a tool to ensure people do their due diligence to return to work. However, some cases are a little more ambiguous, like getting a penalty for refusing a job 2 hours away.

It is worth knowing that if you get a penalty and do not have enough money to pay your main bills (rent, for instance), you could ask for welfare benefits. Indeed, under some conditions, welfare can cover you while you are under penalty.

Starting a business while unemployed

If you are unemployed and have a good idea for starting a new business, unemployment offices may be able to help you.

You will have to vet the idea with them, but they can offer entrepreneur courses to help you in your journey. In this case, you will not have to submit many job applications or take the first job that you are offered. However, you can only get the benefits for 90 days. Subsequently, you will have to decide on whether you want to continue your business or become employed again. In the first, you will not be entitled to benefits. And in the second case, you will have to start searching.

However, there is one important condition: You cannot become unemployed to start a company. So, you should not quit your employer in the hope that the unemployment office will help you create a business.

Unemployment and the first pillar

While you are unemployed, you still need to contribute to social security.

You will still pay for the first pillar, disability insurance, and military and parental leave insurance. These contributions are based on your unemployment benefits, not your previous salary. The unemployment office will cover half of the contributions (like your employer did), and you will pay the other half.

The unemployment office covers accident insurance. In some cases, you can keep your current accident insurance, but you will have to pay it yourself. It is up to you to see which insurance is better and whether it is worth paying.

And the unemployment insurance itself is paid in part by the office and in part by you.

So, being unemployed should not result in gaps in contributions to the first pillar. However, this can lower your average salary, lowering your retirement pension.

Unemployment and the second pillar

When you become unemployed, you may have to leave your employer’s pension fund. Generally, pension funds will let you keep your money with them for up to six months before you have to move the funds.

Therefore, if you are hopeful of being unemployed for less than six months, it makes sense to keep your money where it is to avoid having to move it around. That is unless you can find a better vested benefits account than your current pension fund.

For your assets, you have two choices. First, you can transfer your assets to a vested benefits foundation. Your assets will stay there until you find another job or until you can withdraw them.

The other choice is to move your assets to the Substitute Occupational Benefits Institution and subscribe to a voluntary plan. This means you can continue to contribute to your second pillar while unemployed. This could help avoid any gaps and lower your taxes. But you will pay your contribution fully; the unemployment office will not cover half as your employer did.

In both cases, the disability insurance and survivor insurance is covered by the Substitute Occupational Benefits Institution. You and the unemployment office pay the premiums.

Unemployment benefits and self-employment

Self-employed people or people who employ other people are treated differently by the unemployment insurance.

First, if you are self-employed as a sole proprietorship, you are often not entitled to unemployment benefits. Indeed, you are not receiving a salary, which matters for the benefits.

The unemployment office will look at the last four years for self-employed people. You need at least one year of salaried work in the last four years. So, you may only get unemployment benefits if you have just recently started your self-employment.

Therefore, self-employed people should be careful about ensuring they can handle the loss of their income on their own.

People who manage a company and employ other people may not always be entitled to benefits, either. First, they need to give themselves a salary. In general, this is fine, but when the company goes poorly, the founders often stop paying themselves first, so they may reduce their unemployment benefits.

Also, the right to the benefits is only if the founders fully stop their activity. In general, this means closing the company entirely or selling it. The main point is that the person must relinquish any decision rights in the company.

Unemployment benefits and foreigners

We should also look at some variants for foreigners.

First, if you do not live in Switzerland (cross-border worker, for instance), you will not be entitled to unemployment benefits. In this case, your country of residency should cover you for unemployment.

Then, if you have a temporary permit, such as a B permit, be careful that the benefits will only cover you while your permit is valid. So, if your B permit is soon ending, and you lose your job, you will likely get benefits for a very short period. You can still renew your permit while receiving the benefits, but it may be harder to get it renewed since you may not meet the financial requirements.

Income protection insurance

If you are worried about unemployment benefits not covering your costs of living, you can take extra insurance.

Several insurers in Switzerland, like Generali, provide income protection insurance. These policies will give you a pension if you become unemployed or disabled. You can choose the amount of pension you want, the waiting period, and the duration of the policy. Your premiums will be computed based on that and your health.

While this sounds like a good deal, I would be careful with this kind of insurance. The only people who need it do not save much money, and these people are unlikely to be able to afford it.

On the other hand, if you save a significant portion of your income, you do not need this insurance since you should be able to deal with a loss of income (from 100% to 70%).

Be careful because, like all complementary insurance, insurers can refuse you if they deem the risk too high. You may be denied if you were already unemployed or in an accident.

But it is interesting to know that this option exists.

Conclusion

We have good unemployment benefits insurance in Switzerland. You can get significant benefits for up to two years.

The system is probably not perfect. The unemployment offices, indeed, may be quite strict with beneficiaries. But if you follow their rules, employees are entitled to a significant pension. However, self-employed people may want to insure themselves if they are worried about unemployment.

Having a great unemployment system means we do not have to worry too much about becoming unemployed in our emergency plans. For instance, we could reduce our emergency fund.

What do you think about our unemployment system in Switzerland? Did I forget anything important about these benefits?

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