Wages rising in 2027: here's how much more we could earn (cross-border guide)

Context

Swiss companies expect wage increases by 2027. According to a KOF survey, wage negotiations are expected to lead to an average 1.2% increase in wages next year. Inflation is expected to be at 0.5% next year, which means that the real increase in wages is expected to be at 0.7%.

This increase could translate into an increase of 150-200 Franciscans per month for a worker with an average salary of 4,500 Franciscans. For a worker with a salary of 6,000 francs, the increase could be 360-400 francs per month.

The KOF conducted a survey of 250 Swiss companies to determine the salary increases planned for 2027. The results show that 60% of companies expect a 1-2% increase in wages, 20% expect a 0.5-1% increase, and 20% expect a more than 2% increase.

The expected wage increase may vary by sector and region. For example, companies in the finance and insurance sector could expect a higher wage increase than companies in the manufacturing sector.

The KOF also highlighted that inflation could be an important factor in determining wage increases. Current inflation is around 0.5%, but could increase during 2027 due to economic growth.

In Switzerland, wage increases are regulated by the Labour Act (LStL) of 13 June 1943. According to this law, increases

Operational details

The new year brings with it new opportunities for wage growth for Swiss employees. According to the forecasts of the KOF Research Institute, the most marked wage increase is expected to be recorded in the construction sector, with a 2% increase in nominal terms, after 1.6% thisyear. This means that a worker currently earning 80,000 francs a year could receive an increase of about 1,600 francs, bringing his annual salary to 81,600 francs.

In contrast, bank employees should only benefit from an increase of 1.4%, or just 0.8% taking into account the KOF inflation forecasts. A bank employee currently earning 120,000 francs a year could receive an increase of about 1,680 francs, bringing his annual salary to 121,680 francs.

Switzerland, with its stable economy and strategic geographical location, continues to be an attractive place for investors and businesses. The Swiss government has set a 2% wage increase ceiling for 2027, with the possibility of further increases for the sectors most affected by the economic crisis.

The Federal Minimum Wage Act, which came into force on 1 January 2020, sets a minimum wage of CHF 4,400 per month for adults. This means that an employee with an annual salary of 80,000 francs could receive an increase of about 1,600 francs, bringing his annual salary to 81,600

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Key points

Wage increases are expected to be a major factor for the Swiss in 2027. It is important to note that inflation should remain low, which means that the real increase in wages should be 0.7%. Real wage growth was only 0.2% per year between 2014 and 2023.

According to data from the Swiss Confederation, the average annual income for a worker in Switzerland is currently around CHF 67,000. With a real wage increase of 0.7%, this would mean an average annual increase of about CHF 469 per worker.

But what does this increase mean for workers in Switzerland? Here are some concrete examples:

• A worker with an annual income of CHF 50,000 could see an increase of about CHF 350 per year.
• A worker with an annual income of CHF 80,000 could see an increase of about CHF 560 per year.
• A worker with an annual income of CHF 100,000 could see an increase of about CHF 700 per year.

It is important to note that these are just examples and that the real wage increase could vary depending on the sector, industry and region.

But how do you get to these numbers? Here are some important information:

• The Federal Minimum Wage Act (LSM) states that the minimum wage for workers in Switzerland cannot be less than CHF 4,448 per month (2023 data).
• The Federal Minimum Wage Act (LSM) also states that the real wage increase cannot be

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Source: tio.ch