I’m trying to compare compensations for two competing offers, one as an employee, the other as a contractor (IT companies based outside of Switzerland, remote work). Curiously I haven’t seen relevant topics on the forum so far, so here’s mine!
- employee at company A
- contractor at company B
Becoming a contractor allows company B to hire me without having a legal entity in Switzerland. I would still be considered like an employee with similar conditions on their side (unofficially, according to them, no contract seen yet). There are different solutions from my side, like using a payroll company, such as https://payrollplus.ch (but there are many others) which seems to take 3% of the sum billed to the client. Another is to create my sole proprietorship, which seems straightforward from what I’ve seen (I haven’t looked at the taxes though…).
I’m talking numbers with A and B. But how do I compare a contractor yearly rate with a salary?
If I understand https://payrollplus.ch/en/freelancer/calculator/, a salary of 100kCHF (to take a round number) would be obtained with a monthly rate of 10kCHF so 120kCHF billed to the client (my “employer”) yearly.
Does that sound correct? Are there better tools to compute this?
If I do all of this myself would I simply trade time for this 3% fee, or would there be other costs that I’m not foreseeing, making the payroll company more attractive? I see it as a learning experience, and I assume that it should be easy after the first year. And the 3% is not negligible, in this example that’s 3600kCHF per year.
There are other considerations to take into account (I think being a contractor allows you to avoid the 2nd pillar and invest the money better for instance), but right now a raw comparison is my biggest concern, especially for negotiations.