Multi-currency payroll from Switzerland: paying staff in their own money without taking on risk

A Swiss company employing people beyond its borders always ends up facing the same question: should salary be paid in francs, or in the currency where the employee lives? It looks like an administrative matter. It is not: a badly calibrated conversion clause has already led to an order to pay salary arrears, and the employee's written consent made no difference. This guide separates what the law allows from what it sanctions, then compares the four set-ups that genuinely exist.

1. Why a Swiss company ends up paying in another currency

It is almost never a matter of convenience. Three situations lead there, and they do not call for the same answers.

Attracting and retaining people

An employee paid in francs while living in the euro area bears two deductions their payslip never shows: their provider's charges on receipt, and the gap between the market rate and the rate applied to them. On a monthly salary that gap runs to tens of euros; over a career, to thousands. An employer who absorbs or removes that friction offers a real, immediately visible advantage that does not require a pay rise.

Local compliance

As soon as the work is performed abroad, the country of residence may claim the employee's social security attachment, its own payroll rules and its own minimum wage, expressed in its own currency. The currency then stops being a commercial gesture: it follows from the applicable regime. This is the case most often misidentified, and section 4 is devoted to it.

Operational simplification

Rather than opening an entity in every country, many companies hand local payroll to a third party, often an Employer of Record, which becomes the legal employer on the ground. Multi-currency payroll is then handled by the provider. This route is real, but it carries a cost per employee and it does not cover every case: it is compared with the others in section 7.

2. Is it even allowed?

Yes, and the answer is clearer than is generally assumed. Article 323b paragraph 1 of the Code of Obligations provides for payment of salary in legal tender, but that rule is not mandatory: the parties may depart from it by agreement, as may local custom. The Federal Supreme Court put it without reservation: "In a contractual relationship governed by Swiss law (art. 121 para. 1 PILA), the parties may beyond question agree that the salary will be paid in a currency other than the Swiss franc."

In other words, the currency used is not in itself the problem. A contract may validly provide for a salary in euros, dollars or pounds. What the law examines is what the employee actually receives, and how that amount compares with two benchmarks: the applicable minimum wage, and the pay of colleagues in a comparable situation.

3. So why did one company have to pay 18,881 francs?

Because it had built its clause the wrong way round. The facts, decided by the Federal Supreme Court on 15 January 2019, deserve to be known by any HR department considering a conversion clause.

A Swiss industrial company had staff sign an amendment to their employment contracts in September 2011: if the Swiss franc went below 1.30 against the euro for three consecutive months, the salary would be converted into euros at a fixed rate of 1.30 and paid into a euro account. The clause applied from January 2012 to June 2015. With the franc markedly stronger than 1.30 over the period, the employees concerned received, once converted back, less than colleagues paid in francs.

What the Federal Supreme Court held

The dispute was not about whether payment in euros was lawful, which was expressly accepted. It was, in the words of the judgment, about "whether it is contrary to the Agreement of 21 June 1999 on the Free Movement of Persons to pay cross-border workers a salary in euros which turns out to be lower than the remuneration paid in Swiss francs to workers residing in Switzerland".

The answer was yes, on the basis of article 9 of Annex I to the Agreement on the Free Movement of Persons. The reasoning is worth following step by step, because it reaches well beyond the case decided:

The company was ordered to pay 18,881 francs to that single employee, "as the salary difference for salary paid in euros at an exchange rate of 1.30". An industry arbitral tribunal had already, in September 2012, found the same breach and held similar amendments void.

4. Where does your employee actually work?

This is the question that governs everything else, and it turns on the place where the work is performed, not on residence or nationality. The single-state principle laid down by European regulation 883/2004 on the coordination of social security systems, applicable to Switzerland through the Agreement on the Free Movement of Persons, attaches a person to the legislation of one state at a time — in principle the one where they carry out their activity.

For remote work from a neighbouring country, two distinct thresholds must be watched in parallel, and they do not coincide: a tax limit and a social security limit, the latter being the higher of the two. We set them out, with the supporting documents to keep and the role of the A1 certificate, in our guide to cross-border telework. Crossing the social threshold moves the employee under their country of residence's regime: the Swiss employer must then register there and pay contributions in the local currency — and that, and only that, is where the currency becomes an obligation rather than a choice.

5. Which minimum wage, and at which rate?

There is no federal minimum wage in Switzerland. Five cantons have introduced one, and it applies whatever currency the salary is paid in: it is the equivalent in francs, at the time of payment, that must reach the threshold.

Data retrieved on 16 September 2026. The Geneva figure is the one published by the Republic and Canton of Geneva; the other four are indicative and must be confirmed with the canton concerned before being applied, as these thresholds are indexed annually. A collective labour agreement may also impose a sector minimum above the cantonal minimum.

Which rate, and on which date

The threshold is assessed at each pay run, on the basis of the amount actually paid. Three practical consequences:

• a salary that complies in January may no longer comply in October if the currency of payment has depreciated, with nothing having changed in the contract;
• using a public, verifiable reference rate and documenting it on the payslip avoids having to justify an internal rate after the event;
• the check has to be run by the employer, on its own initiative. There is no mechanism that automatically raises an alert when the threshold is crossed.

Calculator: does the salary paid in another currency clear the cantonal minimum?

This calculator converts the amount paid, reduces it to an hourly rate in francs and compares it with the cantonal threshold. Above all it shows the tipping rate: the point at which the threshold stops being met, and which therefore has to be watched.

6. Who bears the currency risk?

Every cross-border payroll answers this question implicitly, and the answer can be read in how the contract is drafted.

The third and fourth rows are the two set-ups to avoid. They share the same flaw: they make the employee bear a variation that belongs to the running of the business, and over time they produce a measurable gap with colleagues paid in francs. That gap is exactly what a court will quantify.

Calculator: the gap with a colleague paid in francs

This second tool quantifies the exposure. It compares what an employee receives when their salary is converted at a fixed contractual rate with what they would have received at the real rate, then accumulates the difference over the period the clause applied — the very logic behind the 18,881 francs in the 2019 judgment.

7. The four possible set-ups, and what they involve

The Federal Supreme Court criticised the employer for not having considered other measures. Here are the ones that exist, with what they cost and what they settle.

Set-ups 3 and 4 answer a question of attachment: they are called for when the employee falls under a foreign regime. Set-ups 1 and 2 answer a question of currency: they concern the employee who remains attached to Swiss payroll. Confusing them leads either to creating an entity you do not need, or to leaving an employee under a regime that is no longer theirs.

Why the first set-up is the most sober

It is worth pausing on, because it is often dismissed for want of knowing about it. The historical obstacle was practical: an employee residing outside Switzerland could not easily obtain a Swiss IBAN in their own name, or paid dearly for it. That is no longer inevitable: ibani, a financial intermediary and not a bank, issues a personal Swiss IBAN in the employee's name, into which the employer pays francs as it would for any other member of staff — with no bank account opening, no card and no credit. Converting into euros, and when to do so, is then up to the employee.

Where the employee falls under Swiss payroll, the benefit for the employer is not a matter of pricing, it is contractual and operational: there is no longer a conversion clause in the contract, so no rate to negotiate, no difference in treatment to justify on that ground, and no minimum wage threshold to recalculate at every move in the exchange rate. Payroll stays in a single currency. This set-up does not, however, remove the need to examine social security attachment, nor to check the applicable minimum if the work is performed abroad. Our business page explains how it works, and our guide to optimising foreign supplier payments covers the non-payroll side. For the particular case of the cross-border worker, who is subject to specific permit and withholding tax rules, see our employer checklist.

8. The HR compliance checklist

To work through before putting a foreign-currency payment in place, and to revisit whenever an employee's situation changes.

• Establish where the work is performed, not where the employee lives. That is what fixes social security attachment and the applicable minimum.
• Measure the share of work carried out from abroad and compare it with the tax and social security thresholds, which do not coincide.
• Check whether a collective labour agreement applies to the company: it may impose a sector minimum above the cantonal minimum, and set its own rules on the currency of payment.
• Write the salary in francs in the contract if the employee falls under Swiss payroll, and treat the currency of payment as a payment method, not as a clause fixing the salary.
• Rule out unfavourable fixed contractual rates and indexation clauses that reduce pay in line with the exchange rate. A fixed rate that benefits the employee does not raise the same problem.
• Apply the same rule to everyone, regardless of residence: it is the difference in treatment, not the conversion, that founds indirect discrimination.
• Document the rate used on the payslip, and keep the source of that rate.
• Check the minimum wage threshold at every pay run, not only on hiring.
• Keep a record of the alternatives considered and the reasons for rejecting them: that is the item the court found the employer had failed to produce.

9. Frequently asked questions