Hiring cross-border workers in Switzerland: rules and permit requirements

As Switzerland continues to attract skilled professionals from its neighbouring countries, cross-border employment has become an increasingly common hiring practice – particularly in regions near the borders with France, Germany, Italy, and Austria.

For employers, especially those based in the EU, this opens up exciting talent opportunities without requiring full relocation or permanent immigration. However, it also comes with strict rules on work permits, taxation, and social security, most notably the Swiss G permit.

Whether you’re an HR manager, compliance lead, or business owner looking to employ cross-border workers in Switzerland, understanding the legal obligations and administrative processes is key to avoiding delays or penalties.

This guide will walk you through everything you need to know about hiring cross-border employees, from permit eligibility to payroll compliance, and how a Swiss Employer of Record (EOR) can simplify the entire process.

Rise in cross-border employment in Switzerland

Switzerland’s strategic location in the heart of Europe and its competitive economy make it a hub for international employment. Many skilled workers living in France, Germany, Italy, or Austria commute across the border daily or weekly to work in Swiss cities like Geneva, Basel, and Zurich. In fact, cross-border employees make up a significant portion of the Swiss workforce, particularly in finance, healthcare, and engineering sectors.

To legally employ such individuals, companies must adhere to specific cross-border hiring regulations and G permit requirements, regardless of whether they are based in Switzerland or another country.

What is a G permit and who needs it?

The G permit, or cross-border commuter permit, is designed for foreign nationals who reside in an EU/EFTA country but are employed in Switzerland. It allows them to legally work in Switzerland while continuing to live in their home country.

To qualify for a G permit, the employee must:

• Reside in a neighbouring EU/EFTA country (typically within a daily commuting distance).
• Return to their country of residence at least once a week.
• Have an employment contract with a Swiss employer.

G permits are usually issued for up to 5 years if the employment contract is open-ended or longer than 12 months. For shorter contracts, the permit duration matches the contract’s length. G permits can be renewed, provided the worker still meets the eligibility criteria.

Tax rules for cross-border workers in Switzerland

Income taxation for cross-border workers depends on where they live, where they work, and whether there’s a double taxation agreement (DTA) in place.

For example:

• France has a special agreement with Switzerland under which G permit holders pay tax in France, provided they return home at least once a week. However, the Swiss employer must still withhold a source tax which can later be credited in France.
• Germany, Italy, and Austria typically allow tax to be paid in Switzerland, although the employee may still have to declare income in their home country, depending on national rules.

Swiss employers are responsible for applying the correct withholding tax rates at source and reporting income to both Swiss and (sometimes) foreign tax authorities. Incomplete or inaccurate tax treatment can expose both the employer and employee to fines or double taxation.

Social security coordination across borders

Social security obligations are governed by EU Regulation 883/2004, which coordinates social security systems across the EU and EFTA countries. For cross-border workers, contributions are generally paid in the country of employment, in this case, Switzerland.

This means the employer must register the worker with Swiss social security institutions (e.g., AHV/AVS for pensions, SUVA for accident insurance) and handle monthly contributions accordingly. However, exceptions exist, such as posted workers or those with split working time in multiple countries, so it’s essential to verify the correct jurisdiction.

Swiss employers must also ensure the employee receives all statutory benefits, including pension rights, insurance coverage, and unemployment protections, which can be coordinated across borders when managed properly.

Employer obligations when hiring cross-border employees

When employing a cross-border worker, companies, whether Swiss-based or international, must take several legal steps to remain compliant:

• Draft a written employment contract that meets Swiss labour law requirements.
• Track working hours and return frequency to ensure the individual qualifies for G permit status.
• Register the worker with Swiss social security, tax, and insurance bodies.
• Comply with reporting duties to Swiss cantonal migration and labour offices.
• Inform relevant authorities in the employee’s country of residence, if required.

One of the most common errors employers make is misclassifying cross-border employees as independent contractors or failing to complete the required documentation. These mistakes can lead to financial penalties, back taxes, or even permit revocation.

How a Swiss Employer of Record can simplify cross-border hiring

If your company doesn’t have a Swiss legal entity, or lacks internal HR capacity to manage cross-border compliance, a Swiss Employer of Record (EOR) can be a game-changer.

A Swiss EOR is a third-party organisation that becomes the legal employer of record for your employee in Switzerland. You retain control over day-to-day management and task assignments, while the EOR handles everything related to employment compliance, payroll, and permits.

For G permit holders and cross-border employment, a Swiss EOR can:

• Sponsor the employee for their G permit application, ensuring accurate and timely filing.
• Prepare and issue compliant Swiss employment contracts.
• Handle withholding taxes, including proper deductions for employees living in France, Germany, or Italy.
• Register the worker with all Swiss social security schemes and insurance providers.
• Coordinate communication with cantonal authorities and ensure permit renewals are handled properly.
• Offer support in multiple languages to ensure both employer and employee understand their obligations and entitlements.

This model is ideal for companies based in Spain or other EU countries that wish to expand into Switzerland without setting up a Swiss subsidiary. It also benefits remote-first companies or those hiring one or two employees in Switzerland and wanting a simple, low-risk setup.

For example, a German software company needed to hire a developer who lived in France but would work onsite in Geneva. Without a Swiss entity, the company struggled to manage G permit requirements, tax rules, and social security obligations.

By partnering with a Swiss Employer of Record, the company was able to employ the developer legally within days. The EOR handled the G permit application, registered the employee with Swiss authorities, managed payroll and tax deductions, and ensured full compliance with cross-border regulations, allowing the company to focus on its operations without legal or administrative delays.

How a Swiss Employer of Record simplifies hiring and compliance

Using an EOR allows you to:

• Hire cross-border workers legally in Switzerland within days—not months.
• Skip the complexities of entity formation, tax registration, and social security setup.
• Ensure your team receives correct benefits and is protected under Swiss labour law.
• Avoid errors in G permit filings, withholding tax, and social contributions that could otherwise lead to fines or legal disputes.
• Maintain flexibility and scale your Swiss operations as needed, without long-term administrative commitments.

Hire cross-border workers

Hiring cross-border workers in Switzerland offers access to top-tier talent from neighbouring countries, but it also involves careful management of work permits, taxes, and social security. The G permit is central to this process, requiring workers to return to their country of residence weekly and employers to stay compliant with both Swiss and EU regulations.

For companies without a legal entity in Switzerland, partnering with a Swiss Employer of Record is the most efficient and compliant way to employ cross-border talent. The EOR handles everything from permit processing to payroll, allowing your business to focus on growth, not paperwork.

Looking to hire cross-border workers in Switzerland without the legal hassle? Contact us to find out how our Swiss Employer of Record service can help you hire, pay, and manage employees, compliantly and efficiently.