Part of the gross salary is obligatorily allocated to the social security system. Switzerland bases its old-age provision on a peculiar model of three pillars.
1st Pillar: AVS and AI (Old Age and Survival Insurance, Disability Insurance)
This is a state distribution fee, mandatory for all residents or workers. Its purpose is to guarantee the vital minimum in old age or in the event of death and disability.
Contribution: Generally speaking, it is around 10.6% of your salary, but the employer assumes half (5.3%) and you assume the other half. It appears directly deducted from the payroll.
2nd Pillar: LPP or Pension Fund (Professional Welfare)
From January 1 after turning 17 (for risks) and 24 (for old-age savings), and as long as the salary exceeds a certain threshold, employees contribute to this private capitalization fund. The objective is that, added to the first pillar, you maintain in retirement a standard of living close to your last working years. This money is yours and it accumulates in your individual account with returns. If you leave the country permanently outside of Europe, you can sometimes recover part of this fund.
Unemployment Insurance (ALV/AC - Unemployment)
Contribution to unemployment insurance is also mandatory (half paid by the employee and half by the employer). If you unfortunately lose your job after having contributed at least 12 months, this organization will pay around 70% or 80% (if you have children) of your last salary, subject to your active and demonstrated effort in searching for a new job.
General summary:
When your contract arrives with a gross number per month, the net salary is received after deducting the AVS/AI, the professional pension, unemployment insurance and (in many cases) the tax at source.