Considering Contracting in Switzerland as a Software Engineer? Here's What to Know

Mindset and Motivation: 

Contracting is ideal for software engineers who thrive on solving challenges, delivering results, and working on diverse projects. If your goals include:

• Expanding your experience in new industries or technologies,
• Building a more flexible work-life balance,
• Commanding higher rates while broadening your skill set,
  ...then contracting might be the perfect move for you.

To succeed, you need to deliver high-quality work, be proactive in your communication, and adapt quickly to new teams and environments. Contractors are hired to hit the ground running, so a solutions-oriented mindset is key.

Choosing Your Business Structure: 

In Switzerland, software engineering contractors usually choose between two main options for managing their business:

• Umbrella Companies (Payroll Providers): These companies handle administrative tasks like taxes, social security (AHV), pension contributions (BVG), and accident insurance. This is the simplest option if you’re new to contracting. Umbrella companies typically charge 5%-10% of your gross earnings but allow you to focus solely on your work.

• Setting up a GmbH (Limited Company): A GmbH offers more autonomy and higher take-home pay. However, it requires CHF 20,000 in starting capital and involves additional responsibilities, such as registering for AHV, managing your own accounts, and submitting tax returns. Many contractors hire an accountant to simplify these tasks.

Your choice will depend on how much administrative work you’re willing to take on and whether you plan to contract long-term.

Financial Planning: 

Software engineers in Switzerland command some of the highest contractor rates, but it’s essential to plan your finances carefully. Consider these factors:

• Rates: Aim to earn 2-3 times your previous permanent salary. This accounts for expenses like social security contributions, health insurance, pension, and periods without work.
• Expenses: Budget for additional travel, software licenses, and equipment. Also, remember that you won’t receive paid holidays or sick leave as a contractor.
• Payment Terms: Swiss agencies and clients usually work on 30-day payment terms, but confirm this in your contract to avoid cash flow issues.

Use online calculators or consult with an accountant to ensure your rates cover your obligations while maintaining a comfortable lifestyle.

Soft Skills and Expertise: 

While your technical expertise as a software engineer will land you contracts, it’s your soft skills that will make you stand out. Swiss clients value contractors who:

• Communicate effectively and clearly explain technical concepts to non-technical stakeholders.
• Adapt quickly to new tools, environments, and team dynamics.
• Demonstrate a proactive and solutions-oriented attitude.

Additionally, multilingualism is highly valued in Switzerland. If you can communicate in German, French, or Italian alongside English, you’ll have an edge in the local market.