Nobody likes to do it, but it’s still necessary. Paying taxes. On an international scale, taxes in Switzerland are fairly moderate. Note, however, there are considerable differences between the various cantons and municipalities.
The Swiss tax system distinguishes between Swiss nationals and foreign employees. Foreigners pay the so-called withholding tax.
Ordinary tax return
If the foreign individual has his/her residence in Switzerland and one of the following three conditions is met, an ordinary tax return has to be filed:
- Receipt of C-permit or marriage with a Swiss national or a person holding C-permit
- The annual gross salary exceeds CHF 120,000 (in Geneva CHF 500,000)
- The individual has further Swiss-sourced income, and/or has wealth taxable in Switzerland (such as real estate in Switzerland)
Any wage withholding tax that has already been levied will be credited against one’s final tax liability.
Who is subject to withholding tax?
If non of the above described conditions are met, foreigners become subject to the withholding tax. Withholding tax is a tax deducted directly from income. Foreign persons who are liable to withholding tax are:
- a resident in Switzerland for tax purposes, but do not yet hold a permanent residence permit (C permit)
- have no tax residence in Switzerland for their income (cross-border commuters, weekly residents, speakers, athletes, artists, etc.).
Foreign persons with C permit declare their income and assets with their normal tax return, similar to a Swiss citizen.
With the monthly payment of withholding tax, the Swiss state ensures that foreign employees do not return to their home country without first having paid their taxes in Switzerland.
What is taxed
The withholding tax is calculated from the gross salary including all bonuses (child allowances, meal allowances, travel allowances) and flat-rate expenses. The calculation is based on the place of residence, not on the place of work. The workplace principle applies to German border crossers. Switzerland is entitled to a percentage withholding tax deduction of 4.5 percent of gross income. The 4.5 percent border commuter tax levied in Switzerland is credited by the German tax office.
The role of the employer
The employer is obliged by law to deduct the tax due from the foreign employee’s salary and pay it to the cantonal tax authority. He is liable for the payment of the withholding tax.
How much withholding tax do I pay?
Withholding tax rates vary from canton to canton. The tax rates can be requested from the respective cantonal tax authorities. The list of cantonal tax administrations can help (website only available in German, French and Italian).
The withholding tax calculator from Comparis is also a good tool to calculate the amount of withholding tax.
A special regulation applies to foreign employees with a gross salary in excess of CHF 120,000 per year. In this case, they first pay the withholding tax, but must complete the regular tax return once a year. The withholding taxes previously paid are credited.
These are the tariffs
Depending on the life situation, different tariffs are used to calculate the withholding tax. The most important tariffs are:
For single taxpayers (single, de facto or legally separated, divorced and widowed taxpayers) without children.
For married sole earners – living in legally and actually undivided marriage. This tariff is divided into different columns (“without children”, “with 1 child”, “with 2 children”, etc.).
For married taxpayers who are both employed (double earners); this tariff is also divided into different columns (“without children”, “with 1 child”, “with 2 children”, etc.).
For single parent taxpayers (single, de facto or legally separated, divorced and widowed taxpayers) with children or persons in need of assistance.
There are other tariffs, for example for part-time workers and cross-border commuters. These rates also vary from canton to canton.
|Aargau||Link to webseite|
|Appenzell A.O.||Link to webseite|
|Appenzell I.O.||Link to webseite|
|Basel Land||Link to webseite|
|Basel Stadt||Link to webseite|
|Bern||Link to webseite|
|Glarus||Link to webseite|
|Graubünden||Link to webseite|
|Luzern||Link to webseite|
|Nidwalden||Link to webseite|
|Obwalden||Link to webseite|
|Schaffhausen||Link to webseite|
|Solothurn||Link to webseite|
|St. Gallen||Link to webseite|
|Schwyz||Link to webseite|
|Thurgau (Tariff 2017, 2019 not online)||Link to webseite|
|Uri||Link to webseite|
|Zug||Link to webseite|
|Zurich||Link to webseite|
Can deductions be made from withholding tax?
Every withholding tax payer has the option of submitting a so-called correction calculation and claiming the corresponding deductions. However, these deduction options vary from canton to canton. As a rule, debt interest, purchases into the pension fund, further training costs, childcare costs and contributions for pillar 3a can be deducted. Before submitting a correction calculation, you must first check with the cantonal tax office which deductions are accepted.
For executive employees and technical specialists who are sent by their foreign employer to Switzerland on a temporary assignment (for a maximum period of five years), certain special tax deductions apply.
These so-called “expats” are entitled to deduct additional professional expenses as follows:
- costs for travel to Switzerland and back to home country (at beginning and end of assignment)
- travel expenses to and from Switzerland
- costs for accommodation in Switzerland if the expatriate maintains a permanent habitation abroad
- costs for a private school for children if education in a local language is not feasible
However, these additional tax deductions are only possible if these costs are neither directly paid by the employer nor reimbursed to the employee. Foreign local hires do not qualify as expats.
Public officials like Swiss-German
If you want to collect a few plus points with the tax administration, then explain to the clerk in Swiss German what exactly your concern is. He or she will be happy that you have integrated so well. You don’t speak Swiss German yet? Then sign up for our online course today.