Bonus or gratification in Switzerland: what is owed

In Swiss employment law, “bonus” has no specific legal definition. It is classified case by case as either a salary component (Art. 322 CO) or a discretionary gratification (Art. 322d CO). A bonus paid regularly for three consecutive years without a written reservation can create an entitlement from the fourth year, subject to the applicable conditions. For very high incomes—around CHF 420,000 in 2026—the usual “accessory” test no longer applies, so the bonus can remain a discretionary gratification regardless of its size.

Why the classification decides everything

Swiss law contains no provision dealing specifically with bonuses. It must therefore be determined in each case, by interpreting the parties' intentions at the conclusion of the contract or their subsequent conduct, whether the payment is a salary component or a gratification. Everything else whether it is due, pro-rating on departure, treatment during sickness follows from that classification.

Criterion	Salary component (art. 322 CO)	Gratification (art. 322d CO)
Employer's discretion	Limited: objective, verifiable conditions	Real: award and amount at the employer's will
Award conditions	Clear, measurable, agreed	Vague, subjective or undefined
Enforceability	Due once the conditions are met	Discretionary, unless reclassified
Pro rata on departure	In principle yes, absent a valid clause	In principle no
Unilateral withdrawal	Not possible without agreement	Possible while it remains discretionary and ancillary

Our position at Fed Group: the words "discretionary bonus" in a contract are not enough. A court looks at actual practice, not the heading of the clause. An employer who writes "discretionary" and pays the same amount every year under a formula everyone knows has created an entitlement, whatever the drafting says.

Rule 1: three payments without reservation, and the bonus becomes due

This is the best-known mechanism and the one most often triggered inadvertently. A gratification paid regularly, with no explicit written reservation as to its discretionary character, creates a legitimate expectation. After three consecutive years of payment without reservation, it becomes an acquired right from the fourth year and follows the salary regime.

Two points most guides leave out. First, the reservation must be written, explicit and repeated at each payment: a single mention in a contract signed eight years ago and never repeated holds up poorly. Second, a purely formal reservation contradicted by practice offers no protection: if the amount is calculated each year under the same formula and nobody has actually decided anything, the discretion is not real.

A case seen this spring at an industrial SME in Vaud: a year-end payment made for six years, described as discretionary in a 2018 staff handbook never reissued. Management wanted to withdraw it in a difficult year. The legal exposure was significant not because of the handbook, but because the line appeared on every payslip under the same heading and for the same amount.

Rule 2: the very high income threshold, and a complete inversion of the logic

This is where online information is most widely wrong, and precision matters. It is frequently claimed that the Federal Supreme Court set numerical thresholds 25 % of salary below CHF 75,000, 50 % above. Those percentages do not exist in federal case law. The court expressly declined to set a general proportion between base salary and discretionary bonus, holding that the circumstances of each case remain decisive.

What the Federal Supreme Court actually decided

The accessoriness principle requires a gratification to remain secondary to base pay. A bonus that is very high compared with annual salary, equal to or greater than it, and paid regularly, must exceptionally be reclassified as variable salary. Without a fixed percentage: the judge assesses.

But BGE 141 III 407 set an upper limit on that reasoning. Where total remuneration reaches or exceeds five times the Swiss median salary, the employee's need for protection disappears, freedom of contract prevails, and the accessoriness test ceases to apply. The bonus then remains a discretionary gratification, whatever its proportion to base salary.

That is the exact opposite of what most articles on the subject say, presenting the crossing of a threshold as a ground for reclassification. A senior manager on CHF 250,000 base and CHF 250,000 bonus has, on this ground, no acquired right to the bonus.

The threshold is recalculated each year

The threshold is not a figure fixed in statute: it is five times the Swiss median salary, a value that moves with each Federal Statistical Office survey. Many articles still quote "about CHF 370,000", a figure calculated on the 2009 median.

Basis	Monthly median salary	Annual equivalent	Very high income threshold
2009 median (the judgment's historical reference)			about CHF 354,000
2022 Earnings Structure Survey	CHF 6,788	CHF 81,456	about CHF 407,000
2024 Survey, published 25 November 2025	CHF 7,024	CHF 84,288	about CHF 420,000

The court has further held that crossing the threshold is assessed on the total remuneration actually received during the period in dispute, not on theoretical contractual salary. For a seventeen-month period, the threshold is calculated pro rata over those seventeen months. The gross-to-net mechanics are covered in our gross and net salary method for Switzerland.

Rule 3: the presence clause, the blind spot on leaving

This is where most bonuses are lost, and rarely for the reason the employee expects. The question is not "did I work through the reference period" but "was I present on the date set for payment".

Situation	13th salary	Bonus classified as salary	Discretionary gratification
Leaving mid-year	Due pro rata for months worked	In principle pro rata, absent a valid clause	In principle not due
Clause conditioning payment on presence	No effect: the 13th salary remains due	Limited effect, assessed case by case	Effective in principle
Incapacity through illness	Maintained under the salary regime	Maintained under the salary regime	No obligation to maintain
Maternity or paternity leave	Maintained	Maintained, subject to equal treatment	To be examined; equal treatment may apply

The useful reflex, for candidate and employer alike, is to read the payment clause before the calculation clause. A generous formula coupled with a requirement to be present on 31 March of the following year means a resignation given in January forfeits the whole of the previous year's bonus. That parameter belongs in the negotiation calendar, alongside the notice period covered in our guide to resignation letters in Switzerland.

What does not depend on classification: contributions

One area where a widespread simplification costs employers money. It is sometimes said that a purely discretionary gratification may escape certain social insurance contributions. That is wrong, and it creates a reassessment risk.

Any benefit paid by reason of the employment relationship falls within the salary determining old-age insurance contributions, whether it is legally a salary component or a gratification, and whether paid in cash, in shares or in kind. The civil classification answers the question "is it owed?". It does not answer "are contributions due?", to which the answer is always yes.

The tax position follows the same logic: the bonus is taxable income in the year of payment. Given the progressivity of Swiss income tax, a large bonus can move the recipient into a higher bracket, which is worth anticipating where the payment is foreseeable.

Pursuing an entitlement: the practical route

Salary claims, including reclassified bonuses, prescribe five years from the date they fall due. That is a comfortable window, but evidence decays quickly: payslips are mislaid, colleagues leave, messages vanish from company inboxes.

Gather the contract, its amendments, the staff handbook and any applicable remuneration policy.
Collect payslips for the last five years: they establish the regularity of payments, their heading and their amount.
Look for written reservations. Their existence, wording and repetition at each payment are the heart of the case.
Calculate the total remuneration actually received over the disputed period and compare it with the very high income threshold for the year concerned.
Ask the employer for a written, reasoned position. An unreasoned refusal is itself useful evidence.
If disagreement persists, apply to the cantonal labour conciliation authority or consult a specialist employment lawyer.

For employers the mirror image is simple: an explicit written reservation, repeated at every payment, backed by discretion that is genuinely exercised. The wider pay levers are covered in our article on negotiating and renegotiating your salary.

Frequently asked questions

Can my employer withdraw my bonus overnight?

If it is a gratification that has remained discretionary, yes, the employer has real latitude. If payment has been repeated for three consecutive years without a written reservation, withdrawal is challengeable from the fourth year. And if the bonus is classified as a salary component, withdrawal is excluded without your agreement.

Does a bonus paid in shares or options follow the same rules?

Yes for classification: the Federal Supreme Court treats a cash payment and a grant of shares or options alike. Yes too for social contributions and tax, the attributed value being included in income.

Am I entitled to a bonus during maternity or paternity leave?

If the bonus is a salary component it follows the salary regime and remains due. For a discretionary gratification there is no automatic entitlement, but the principle of equal treatment can be invoked where comparable colleagues received one.

What is the difference between a bonus and profit participation?

Participation in company results is governed by article 322a CO and calculated on accounts prepared under the agreed rules. "Bonus" is a generic term that may cover profit participation, an individual performance award or a gratification.

How much protection does a "fully discretionary bonus" clause give?

It is a strong indicator, not a guarantee. A court examines actual practice. A discretionary clause hollowed out by a calculation formula applied mechanically each year does not protect the employer.

Bonus or gratification in Switzerland: the three rules that decide whether the money is owed