Opening a business in the canton of Solothurn: costs

Context

In brief

• Swiss taxation operates at three levels
• AFC/ESTV administers IFD and VAT
• Contributions depend on salary
• LAMal is mandatory for residents

Key facts

• Where → Canton of Solothurn
• Taxation → federal IFD, cantonal and municipal tax
• AVS/AI/IPG → 5,3% paid by the employee
• AD/AC → 1,1% up to the annual ceiling
• LPP/BVG → from 7% to 18% on the coordinated salary
• LAMal/KVG → taken out within 3 months of arrival

In the Canton of Solothurn, starting a business means lining up several decision-making levels: legal form, entry in the commercial register, minimum capital, registration fees and insurance obligations. The point is not only the initial cost of the procedure. The framework also includes taxation, social security and personnel-related charges if the company pays salaries.

The map of responsibilities

Swiss taxation is structured at three levels: direct federal tax, cantonal tax and municipal tax. Each canton has its own law and multiplier; municipalities apply a multiplier to the cantonal tax. For those preparing to launch a business in Solothurn, this distinction helps avoid confusing the commercial-register registration fee with the ordinary tax burden.

The institutions also have separate responsibilities. AFC/ESTV is responsible for direct federal tax and VAT. Cantonal administrations manage the cantonal and municipal levels. UFAS/BSV, on the other hand, deals with social security, including AVS/AI and LPP, and does not set taxes. UST/BFS produces statistics and does not set rates.

The same logic applies to planning labour costs. For salaries, AVS/AI/IPG amounts to 5,3% for the employee and 10,6% in total with the employer. AD/AC is 1,1% up to the annual ceiling. LAINF/LAA varies from 0,7% to 1,5% depending on the sector. LPP/BVG, on the coordinated salary, provides for rates of 7%, 10%, 15% and 18% in the respective age brackets. These figures should be considered together with the form of the business and the decision to hire staff.

For this reason, the amount to be estimated does not correspond to a single tax. Separating the responsibilities helps prepare the steps involved in starting up: the register and registration fee on one side, taxation on the other, and social security and salary-related coverage in a third block. This separation is what gives shape to the estimate.

Operational details

The first comparison to make concerns one-off and recurring costs. In the startup dossier, registration in the commercial register and the related fee are a separate item from taxation. Alongside these, the legal form and any minimum capital must be examined. The budget must be built by category, without confusing an administrative expense with a tax.

When wages come into play

If the activity remains without employees, the percentages indicated for wages do not describe a third party's payslip. If, instead, the company hires, the labor cost does not equal the agreed gross amount. The 5,3% AVS/AI/IPG borne by the employee and the 10,6% total including the employer already show the difference between withholding and overall burden. AD/AC adds 1,1% up to the annual ceiling, while LAINF/LAA varies according to the sector.

LPP/BVG requires another step: the indicated contribution rate applies to the coordinated salary and changes with age. It is 7% between 25 and 34 years, 10% between 35 and 44, 15% between 45 and 54, and 18% from age 55 up to the reference age. A serious financial plan must therefore distinguish wages, contributions and coverage, instead of using a single percentage.

Personal costs connected with starting up

For residents, LAMal/KVG is mandatory and must be taken out within three months of arrival. Premiums are per capita, vary by canton and region, and are neither a tax nor a wage contribution. Premium reduction is a cantonal subsidy. Deductibles for adults are CHF 300, 500, 1000, 1500, 2000 or 2500. This chapter should not be included in the company's accounting as if it were VAT or AVS, but it affects the family budget of anyone starting the activity.

The practical reading is therefore in two columns: business costs on one side, social protection and personal expenses on the other. Separating them makes dichiarazione delle imposte easier to read and reduces the risk of assigning a budget item to the wrong authority.

Useful planning tools

To estimate your pension strategy, use the pension planner and the pillar 3 simulator.

Key points

To prepare for starting operations in the Canton of Solothurn, it is advisable to create a plan in distinct steps. First: determine the legal form to be examined and verify any required minimum capital. Second: include the commercial register registration and the registration fee as independent items in the plan. Third: separate taxes from social security contributions, indicating direct federal tax (IFD), cantonal and municipal levels on one side, and AHV/IV, ALV, UVG, and BVG on the other when salaries are involved.

A check for each authority

For direct federal tax and VAT, the institutional reference is the FTA. For cantonal and municipal taxes, the reference is the cantonal administrations. The FSO (Federal Social Insurance Office) concerns social security, not the setting of tax rates. This grid avoids sending a tax inquiry to the social security office or treating FSO statistics as a tax rate table.

Fourth: if the activity involves personnel, apply the percentages on the salary according to their function. AHV/IV/EO is 5.3% for the employee and 10.6% in total with the employer; ALV is 1.1% up to the annual ceiling; UVG fluctuates between 0.7% and 1.5% depending on the sector; BVG follows the coordinated salary and age brackets. Fifth: consider labor regulations: the maximum working hours are 45 hours per week for industry, offices, and sales, and 50 hours in other sectors; minimum vacation is four weeks, five for those under 20.

Sixth: for those residing in Switzerland, remember the mandatory health insurance (LAMal) within three months of arrival and keep premiums, deductibles, and cantonal subsidies distinct. Seventh: if the company applies specific working conditions, include the provided leave: 14 weeks of maternity leave at 80% via EO and two weeks of paternity leave. Regarding termination, the notice periods are one month in the first year, two from the second to the ninth, and three from the tenth year onwards.

To check the result on remuneration, consult the Swiss payslip; for the final estimate of salary and taxes, use the salary/tax calculator.