Swiss wages may rise in 2027: what can you expect?

What can a pay rise mean for Hungarians working in Switzerland?

A pay rise directly improves a Hungarian employee’s situation if the increase in gross pay leaves the household with more disposable income even after changes in deductions and living costs have been taken into account. That is why it is not enough to consider a Swiss salary solely in percentage terms.

A nominal wage increase (Nominallohnwachstum) means that the gross salary stated in the contract increases. This is the amount that usually first appears in the employer’s letter or in the addendum to the new employment contract.

A real wage (Reallohn), by contrast, reflects the purchasing power of the salary. If wages increase but everyday expenses rise faster, the higher gross amount does not necessarily mean a more comfortable financial situation.

A Hungarian household living in Switzerland should, in particular, start by looking at its own cost structure. A pay rise has a different impact on someone who rents a flat alone and commutes to work than on someone raising children, paying several insurance premiums, or regularly supporting family members in Hungary.

The value in Hungarian forints of a higher income paid in Swiss francs is not constant either. Anyone with regular expenses in Hungary—such as loan repayments, family support, child support, or the upkeep of a property—must also consider changes in the CHF/HUF exchange rate separately. Swiss wage growth and financial flexibility measured in forints are not the same question.

Which salary figure should be compared?

When receiving the employer’s notification, it is worth placing at least four figures side by side:

1. Previous monthly gross salary: this shows the basis against which the pay rise is calculated.

2. The new monthly gross salary: this is the basis of the nominal change, but it is not yet the same as the amount received in hand.

3. Any 13th-month salary and variable benefits: their terms may also be changed separately or may remain unchanged.

4. The expected net household balance: this is influenced jointly by deductions and regular expenses.

It is not advisable to automatically equate a pay rise with the household’s total annual financial leeway. A one-off bonus, commission or performance-related premium is different in nature from a lasting increase in base salary.

What economic outlook could underpin pay rises in 2027?

The background to the 2027 salary negotiations (Lohnrunde) may include several economic considerations, but these alone do not guarantee an individual pay rise. The employer’s decision, the situation in the sector, the company’s results, labour-market demand and the contractual environment may all jointly influence the outcome.

The Swiss State Secretariat for Economic Affairs (SECO) forecasts from the ETH Zürich KOF Swiss Economic Institute and other economic analysis institutions may describe an environment to which employers, trade unions and employers’ associations can refer. However, a forecast is not an employment contract and does not replace a specific decision by the employer.

A trade union (Gewerkschaft) and an employers’ association (Arbeitgeberverband) may assess the same economic circumstances from different perspectives. On the employee’s side, purchasing power, workload and employee retention may typically be the main concerns. On the employer’s side, costs, demand, competitiveness and the company’s financial position may carry greater weight.

Economic news should therefore not be used to draw direct conclusions about the size of a pay rise expected at a particular workplace. Information more closely related to an individual situation includes communication from management, HR announcements, the payslip and the employment contract.

What can trade unions demand in the 2027 wage negotiations?

Trade union positions may be an important part of wage negotiations, but they are not the same as a pay rise that has already been approved. A demand, proposal or negotiating objective may be the starting point of the process, rather than an amount to which the employee is entitled.

In connection with Swiss wage issues, the names Angestellte Schweiz, Travail.Suisse, Syna and transfair may arise in public and sectoral debates. Employees need to distinguish whether a demand formulated by an organisation applies to their profession, workplace or contractual situation.

When reading news about pay rises, it is useful to distinguish three levels:

• Demand or recommendation: a negotiating position put forward by a trade union or employee representative body.

• Agreement: a settlement accepted by an employer, sector or contracting party.

• Individual application: the specific change stated in your employment contract, payslip or written notification from your employer.

The distinction between these three levels is particularly important if someone is considering changing jobs in Switzerland. A salary range in a job advertisement, a trade union objective quoted in a press report and the wage offered in writing are different types of information.

How may the salaries of Swiss public-sector employees develop?

Statements about the pay of employees working for public-sector or public-institution employers should be treated separately from news concerning the private sector. The Swiss Federal Council (Bundesrat), as well as the context of federal financial and budgetary decisions, may influence debates about public-sector pay issues.

Public statements associated with Karin Keller-Sutter, as well as news surrounding the package of measures known as Entlastungspaket 27 may form part of the broader debate on public finances. However, these do not automatically allow conclusions to be drawn about the future salary of a specific administrative, state or state-affiliated employee.

For a Hungarian employee working in the public sector, the document issued by their own employer should be treated as the primary source. The legal status of the employment relationship, the institution, the position and the applicable regulations may be decisive.

How does inflation affect real wages?

Inflation, or rising prices (Teuerung) shows how changes in household spending can affect the purchasing power of money. A pay rise provides genuine financial relief only if household expenses do not absorb the additional income.

The inflation adjustment (Teuerungsausgleich) is a term that may indicate that a change in pay is intended, in part or in full, to offset the loss of purchasing power. This does not necessarily mean that the employee’s real wages will increase beyond the rate of inflation.

Hungarian families often have expenses in two countries. Alongside the costs of housing, insurance and transport in Switzerland, they may also have banking, property-maintenance or family obligations in Hungary. The impact of a pay rise should therefore be reviewed in a personal budget prepared in Swiss francs and, where relevant, in forints.

What automatic inflation indexation may apply to wages in the hospitality industry?

For people working in hospitality, the National Collective Agreement (L-GAV) may be a document that needs to be examined when interpreting pay changes. However, the abbreviation L-GAV alone does not establish exactly what pay, amendment or inflation indexation will apply to a particular employee in 2027.

In hospitality, it is particularly important to check what job role, employment percentage, working hours and pay components are specified in the employment contract. A fixed monthly salary, hourly wage, allowance, overtime, tips and any benefits in kind cannot be treated as interchangeable.

The contractual classification may determine which rule or minimum wage is relevant. If the employer announces a change, it is advisable to retain the written notification and the date on which it takes effect.

What information is not yet known?

It is not possible to state a single nationwide amount or a percentage applicable to all employees for Swiss pay rises in 2027. There is no single figure from which an individual net salary or household surplus could be calculated with confidence.

The following questions may be answered by information from the employer or the relevant sector:

• How large will any increase in the basic salary be?

• Which employee groups will the change cover?

• From what date will the new pay take effect?

• Will the change be an increase in basic salary, a one-off payment or a variable benefit?

• Will the terms and conditions for the 13th monthly salary, bonus or commission change?

• How will the change affect people working part-time, during a probationary period or under a fixed-term contract?

Practices may vary by canton, municipality, sector and employer. Those planning to move to Switzerland should therefore not factor an assumed 2027 pay increase in advance into their minimum relocation budget or salary expectations.

What should you look out for in employer communications?

In an employer’s communication, the precise wording is at least as important as the headline about the increase. If anything is unclear, it is advisable to clarify in writing what the stated amount refers to.

Pay particular attention to the following:

1. Effective date: the higher salary may only be payable from the date specified in the communication.

2. Gross or net amount: employer salary figures are generally gross amounts, so the salary actually received may differ.

3. Percentage or fixed amount: the same percentage represents different amounts in francs for different salaries.

4. Basic salary or total remuneration: allowances, bonuses and commissions do not necessarily increase together with the basic salary.

5. Employment percentage: for part-time work, the stated full-time amount is not the same as your monthly payment.

6. Need for a contract amendment: if new terms are established, request a written document and keep it.

As a Hungarian employee, you are acting prudently if you interpret Swiss employer documents not merely by translating them, but also by considering their financial consequences. Payslips, contract amendments and annual statements may later also be relevant in tax, family or administrative matters in Hungary.

Sources

• NZZ

• ETH Zürich KOF Konjunkturforschungsstelle

• SWI

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