Unpaid AHV contributions: the personal liability of directors and managers

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A Swiss company that employs staff must deduct social security contributions from salaries and pass them on to its compensation office. If the company fails to do so and later cannot pay, the compensation office may turn to the members of the board of directors and to the managers personally. This article explains the legal basis of that liability in Art. 52 of the Federal Act on Old-Age and Survivors' Insurance, the leading decisions of the Federal Supreme Court and the related criminal provisions. It closes with practical considerations for foreign shareholders who sit on a Swiss board themselves or who appoint nominee directors.

Why this matters for foreign shareholders

Entrepreneurs from abroad who set up a Swiss company limited by shares (Aktiengesellschaft, AG) or a limited liability company (Gesellschaft mit beschränkter Haftung, GmbH) frequently take a seat on the board themselves, or they appoint a trusted person, often a local professional acting as nominee director, to fulfil the requirements of corporate law. For unpaid contributions to the old-age and survivors' insurance (AHV), however, Swiss social security law provides for a personal and subsidiary liability of the company's officers. Since the contributions on salaries are considerable (see AHV contributions on salaries in 2026: what employers and employees pay), arrears can accumulate quickly, and a director who has paid little attention to the company's payroll may find himself personally pursued for the shortfall once the company has become insolvent.

The employer's duty to deduct and remit

Under the Federal Act on Old-Age and Survivors' Insurance (OASIA; German: AHVG), every employer with an establishment in Switzerland is obliged to pay contributions (Art. 12 OASIA). The employer deducts the employee's share from every salary payment and remits it, together with its own employer share, to the competent compensation office (Ausgleichskasse) (Art. 14 para. 1 OASIA). For this purpose the employer must join a compensation office, which will be either the cantonal office or an office run by an industry association.

The Ordinance on Old-Age and Survivors' Insurance (OASIO; German: AHVV) regulates the rhythm of payment. As a rule, contributions are paid monthly, and quarterly payment is possible where the annual payroll does not exceed CHF 200,000 (Art. 34 para. 1 lit. a OASIO). Contributions fall due within ten days after the end of the payment period (Art. 34 para. 3 OASIO). Late payment triggers interest of 5 % per year, which is owed irrespective of any fault on the part of the employer. The employee's share deserves particular attention, because the company withholds it from its staff on behalf of the social insurance system.

Liability under Art. 52 OASIA

According to paragraph 1, an employer who intentionally or through gross negligence disregards the statutory rules and thereby causes damage to the insurance must compensate that damage (Art. 52 para. 1 OASIA). Mere slight negligence is therefore insufficient, whereas a failure to pay contributions over a longer period will often be regarded as at least grossly negligent.

Paragraph 2 extends this liability to natural persons where the employer is a legal entity. In that case the members of the board of directors and all persons involved in the management or liquidation of the company are liable on a subsidiary basis, and they are liable jointly and severally among themselves (Art. 52 para. 2 OASIA). Subsidiary liability means that the compensation office first looks to the company; joint and several liability means that, once the officers are liable, the office may claim the entire damage from any one of them.

The limitation of the claim follows the rules of the Code of Obligations (CO) on tort (Art. 52 para. 3 OASIA). The compensation office asserts its claim by way of a formal decision (Verfügung) (Art. 52 para. 4 OASIA), and the person concerned may appeal against that decision to the cantonal insurance court at the employer's domicile (Art. 52 para. 5 OASIA).

Case law of the Federal Supreme Court

The Federal Supreme Court has shaped the scope of this liability in a number of leading decisions. In BGE 126 V 237 it held that formal and de facto managing officers of a GmbH are liable in the same way as the organs of an AG, whereas persons who are merely members (shareholders) of a GmbH are not liable on that ground alone (Federal Supreme Court, BGE 126 V 237). In BGE 129 V 11 the court confirmed that its established practice on organ liability continues to apply after the entry into force of the Federal Act on the General Part of Social Insurance Law (German: ATSG) (Federal Supreme Court, BGE 129 V 11).

BGE 132 III 523 concerned de facto organs and the right of recourse between several liable persons, which becomes relevant when one director has paid the whole damage and seeks contribution from the others (Federal Supreme Court, BGE 132 III 523). Finally, in BGE 134 V 401 the court held that former organs may contest the amount of the underlying contribution claim within the damages proceedings (Federal Supreme Court, BGE 134 V 401), which is of practical importance for directors who were no longer involved when the contributions were assessed.

For foreign shareholders, the reference to de facto organs is the decisive point. A person who effectively steers the company from abroad, for instance by instructing the local managers on which payments to make, can fall within the circle of liable persons even without a formal appointment, while a nominee director who holds the formal seat remains exposed regardless of how little influence he actually exercises.

Criminal provisions

In addition to civil liability, the OASIA contains criminal provisions. Art. 87 OASIA classifies certain conduct as a misdemeanour, punishable by a monetary penalty of up to 180 daily penalty units. This covers, among other things, evading the obligation to pay contributions and failing to settle contributions, and in particular the case in which an employer deducts the employee contributions from wages and then uses them for other purposes (Art. 87 OASIA). Art. 88 OASIA treats as a contravention, punishable by a fine, the provision of false information or the withholding of information as well as the obstruction of audits (Art. 88 OASIA).

Typical risk situations in practice

The following observations are practical considerations drawn from experience and are not statements of case law. The most frequent risk arises in a liquidity crisis, when the company still pays net salaries to keep its staff but postpones the transfer of contributions in the hope that business will recover. A related situation occurs when management decides to pay suppliers or other creditors whose goodwill seems more urgent for the continuation of the business, while the compensation office is left to wait. Since the employee share has already been deducted, such a decision can carry both civil and criminal consequences for the officers who took or tolerated it.

A further risk concerns directors who reside abroad and rely entirely on local staff, a fiduciary or an accountant to handle payroll. Delegation of the administrative work is permissible and usual, yet the board retains its duty of supervision, and a director who never asks whether contributions have been paid will find it difficult to argue that he did not act with gross negligence.

Practical checklist for directors

• Confirm that the company is affiliated with a compensation office and that all employees are registered.
• Monitor regularly, for example through a short report at each board meeting, that contributions have been paid on time and that no arrears or reminders are outstanding.
• Keep written records of the information you received and of the steps you took, including instructions given to local staff or service providers.
• In a liquidity shortage, give the remittance of deducted employee contributions due weight in payment decisions and seek advice at an early stage.
• If you leave the board, resign properly, make sure that the resignation is entered in the commercial register, and document the state of contribution payments at that time.
• When appointing a nominee director, clarify in advance how payroll information will reach him and how he can verify payments.

How Ressos Legal helps

I advise foreign shareholders, directors and nominee directors of Swiss companies on their duties regarding social security contributions, on the organisation of payroll supervision and on claims brought by compensation offices under Art. 52 OASIA, working alongside their advisers in their home countries. Contact me for an initial assessment of your situation.

Sources: Federal Act on Old-Age and Survivors' Insurance (SR 831.10) and Ordinance (SR 831.101), as of 1 January 2026; information leaflets of the AHV/IV Information Centre (ahv-iv.ch), as of 1 January 2026; decisions of the Federal Supreme Court BGE 126 V 237, BGE 129 V 11, BGE 132 III 523 and BGE 134 V 401. Figures as of October 2026.

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.