Tax at source in Switzerland in 2024
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In Switzerland, we have two different tax systems. The standard tax system is for Swiss citizens and the second is for expatriates. Expatriates will pay a so-called tax at source, where taxes will be taken out of their salary.
In this article, I want to cover tax at source in detail. This is an important subject for many people in Switzerland, since we have many non-citizens. And it is often a misunderstood subject.
Tax at source
Tax at source is a tax that is directly deducted from your income. This is the tax system for Swiss residents without a permanent residency permit. Most foreigners in Switzerland will be subject to this system for multiple years. People working in Switzerland but living abroad are also subject to this tax system.
It is essential to note that this tax system is quite different from the standard tax system for Swiss residents. In fact, it does not even use the same tax brackets, and you do not have to do a full tax declaration, like Swiss citizens.
All earnings from your employer are subject to tax at source. Moreover, wage-loss replacement benefits (disability and unemployment benefits, for instance) are also subject to it.
It is the responsibility of the employer to notify the cantonal tax office about employees liable for tax at source. In case the situation changes (marriage, divorce, children and such), the employee must notify its employer who then must notify the cantonal tax office to adjust the taxes.
So, there are two components to this system:
- The fact that this is deducted from your income (at source).
- The fact that the calculations are done differently (at tax system).
Both of these components are important to know about.
How much tax at source?
As usual in Switzerland, things are different for each canton. In Switzerland, taxes are due at the federal, cantonal, municipal and even church level. So, the taxes you will pay will depend on where you live. You can find the tax brackets online for each canton.
What is essential is that there are some categories and sub-categories with their brackets.
- A: Single person without children
- B: Couples with one single income
- C: Couples with two incomes
- H: Single person with children (or dependents)
- The number of children is generally a different sub-category (C2 would be couples with two incomes and two children).
- The church tax is also a different sub-category (B0Y would be a single-income family without children, but subject to church taxes).
I cannot cover all cantons, but here are some examples for three cantons.
First, a single person would pay the given percentages:
- 60’000 yearly income: 8.94% in Geneva, 10.57% in Fribourg and 6.02% in Zurich
- 80’000 CHF: 12.79% in Geneva, 13.13% in Fribourg and 8.11% in Zurich
- 100’000 CHF: 15.32% in Geneva, 15.15% in Fribourg and 9.68% in Zurich
Or, a couple with two income and two children would pay these percentages:
- 60’000 yearly income: 2.62% in Geneva, 5.99% in Fribourg and 0.41% in Zurich
- 80’000 CHF: 6.26% in Geneva, 8.65% in Fribourg and 1.76% in Zurich
- 100’000 CHF: 8.90% in Geneva, 10.65% in Fribourg and 3.05% in Zurich
Finally, a single parent with 1 child would pay these:
- 60’000 yearly income: 0% in Geneva, 3.48% in Fribourg and 1.94% in Zurich
- 80’000 CHF: 1.57% in Geneva, 6.18% in Fribourg and 3.50% in Zurich
- 100’000 CHF: 4.87% in Geneva, 8.49% in Fribourg and 5.23% in Zurich
So, if you want to know how much you are going to pay with the tax at source system, you will need to know which canton you are going to live, your category and the annual income of your household.
Change to ordinary tax system
There are a few cases where a person subject to the tax at source system would switch to the ordinary tax system.
The first and most common case is by obtaining a C residency permit. Indeed, a C permit is considered permanent. As such, they will use the ordinary tax system, like any other permanent residents. For most foreigners, this happens 5 or 10 years after the B permit. It is important to know that if you are married, as soon as one spouse gets the C permit, you will be switched to the ordinary tax system.
Another case is getting married to someone with permanent residency (Swiss citizen or C permit). In this case, the household will be taxed together, under the ordinary tax system.
It is worth nothing that similarly, after a divorce, somebody could go from the ordinary tax system to the tax at source system.
If you reach retirement age, you will also fall back to the ordinary tax system. The exception is if you are still employed.
Finally, somebody with a full invalidity pension would also be getting out of the tax at source system.
In all cases, the taxes already paid with tax at source will be considered so that you will not pay twice.
Deductions and tax at source
One major difference between the ordinary tax system and the tax at source system is the deductions you can claim. The ordinary tax system implies filling a full tax declaration (a tax return).
When doing your tax declaration, you can deduct many things:
- Work expenses
- Contributions to the retirement system
- Health expenses
- Donations
- And many more tax deductions
However, you cannot claim any of that if you are not doing a tax return. It does not mean you are going to pay more taxes, it simply means that the computation is very different.
However, if you feel like you have enough deductions, and you would profit from filling a tax declaration, you can ask to do one. We will see the details of that in the next section.
Tax declaration and tax at source
Under a few conditions, a person liable for tax at source, will be asked to fill a tax declaration. It is important to note that this will change the tax system, but not the way to pay taxes. So, a personal liable to tax at source filling a tax declaration will still see taxes deducted from their income. So, you can change the tax system but not change tax payment.
There are three cases where a person would have to switch to an ordinary assessment (same as a tax declaration):
- If their gross income reaches 120’000 CHF per year.
- If their taxable assets at the end of the year are worth more than a given threshold. That threshold will depend on each canton. For instance, in Bern, the threshold is 150’000 CHF. And in Zurich, this threshold is 80k for individuals and 160k for couples.
- If they receive an additional income not subject to tax at source of at least 3’000 CHF. This could be side income or a pension, for instance.
When you meet one of these requirements, you should be automatically asked to fill a tax return. If you are not, you can ask for the ordinary tax assessment before March 31st of the following year.
If you do not meet these requirements but want to switch to the ordinary tax assessment, you can file an application for that. Most people do that to claim tax deductions. You must file the application before March 31st of the following year.
However, it is vital to know that even further deductions with a tax return may not make your taxes lower. In fact, some people have switched to doing a full tax return but have increased their taxes.
One way to estimate this is to use the tax software of your canton. You can generally get an estimate of the taxes. So, if you enter all your data, you should know how much you are going to pay. This may still be an estimation because the tax office may not always with you, but this is the best estimation we can get.
If this estimation is significantly lower than your current taxes, you may want to consider requesting switching to the ordinary tax assessment.
How to optimize tax at source?
Unfortunately, there is not much you can do to optimize tax at source.
The main change you can do is move to a canton with a lower tax rate. Obviously, this is not an easy choice and there are many other factors to consider. But geo-arbitrage is very efficient in Switzerland since there are massive differences between cantons.
The other thing you can do is what we already discussed: ask to switch to the ordinary tax system and get more deductions. Again, as seen in the previous section, you need to be careful about the details since this may not always save you taxes.
It is not really an optimization, but if you think you are taxes are not correct, you can ask for a reassessment. You must request it by March 31st of the following year of the taxes for which you think an error was made.
Conclusion
The tax at source system is important to know for people who are subject to it (or may be subject to in the future). It is not always well understood by people because it is both a payment system (deduction from your income) and a tax system.
This tax system has fundamentally different tax brackets than the ordinary tax system. And unless you request to switch to the ordinary tax assessment, you cannot claim most deductions.
If you would like to learn more about ordinary taxes, you can read my guide about Swiss taxes.
Do you have any other questions about tax at source?
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Ordinary taxation starts at exactly 120k yearly income btw, at least in Zurich, not if it “exceeds 120k”. I know someone who came to Switzerland with a contract covering exactly 120k and he was surprised when the demand to fill out a tax declaration fluttered in his mail.
Thanks, I will update that.
Thank you once more for the informative explanation about a system I only new from hearsay.
Glad it was interesting :)
I will be above the 125k CHF mark by the end of this year. Does this mean I will be able to claim the tax deductions you mention here above (e.g. work expenses – Contributions to the retirement system
– Health expenses)?
Yes, Tom! As soon as you have to fill a tax return, you will be able to deduct everything.
Hello Baptiste! Thank you for sharing this information with us :)
I have permit B and my taxes are deducted directly from my salary. With this tax system, I can’t claim deductions? For example transportation costs between work-home.
Hi Larissa
You are correct. The only way to claim deductions would be to ask for an ordinary tax assessment and fill a tax return. However, whether you will pay less or more will depend on many factors.
Hi Baptiste,
thanks for the nice overview!
> If their taxable assets at the end of the year are worth more than 150’000 CHF.
I wonder if the number 150’000 CHF depends on canton or a typo here? At least in Zurich it is 80’000 for individuals and 160’000 for jointly taxable persons.
Hi Vasily
It seems you are right, it depends on the canton. In Bern, it’s indeed 150k, but in Zurich, in depends. I will amend this part, thanks!
Dear Baptiste
No offense, but that’s not the first time you made wrong assumptions about tax at source regulations. Maybe you shouldn’t be writing advice articles about a topic you are not familiar with? It is hard enough as a foreigner on a B permit to find out the rules, the last thing people need is to read wrong rules online on a trusted blog.
Everybody makes mistakes, even experts. I have never claimed to be an expert in anything. As long as I correct my mistakes and I keep my articles up to date, I do not think this is an issue. People are free to find another blog they prefer.
Thanks for the blogpost, definitely very intersting even if I’m not personally affected by it.
Regarding inaccuracies: In my opinion it is pretty clear/transparent that you give your best in each article, and the content is better than 99% of us would put together after quite some research.
I treat the blogposts as a super helpful starting point and if I need the exact infos I’ll afterwards dig into the specific documents myself.
So please keep up the great work (including updating inaccuracies), the vast majority here appreciates it a lot!
Thanks for the feedback, Peter!
And for everybody: don’t hesitate to point out any issue with my articles, I try to always update my articles to be as accurate as possible.
If I move cash from a Swiss bank account to a foreign bank account, will that lower my wealth tax?
No, foreign tax is also eligible for wealth tax. There may be some exceptions if you are also paying tax in the other country, to avoid double taxation, but this is not a mean to reduce your taxes in Switzerland.
you have to declare your worldwide wealth AND income, moving cash abroad and not declaring it is the definition of tax fraud ;-)
Thanks Baptiste! Very interesting, as usual! End of this year I will be in the case of +130K, so from you article I assume they will automatically ask me to fill the tax form, so I don’t need to do anything until my canton asks me to, right?
Also, I have a question about taxes too. I’ve heard that taxes are higher when you get married than staying both single even living together, but depending on the income each of one has. Do you know if this is true and if its applicable to expats? If it is, it’s not very encouraging to get married: organizing a wedding + paying more taxes forever. Which is the point? :D:D
Hi Meux
Normally, they should automatically ask you, yes. This is the responsibility of your employer to properly communicate your income to the tax offices.
As for your question, this is unfortunately right. If the two spouses are working, they will pay more taxes once married. It’s stupid indeed. You can read this article: Switzerland is unfair to married couples
Meux
THere is NO financial reason in Siwtzerland to get married, the only reason to do it is romantic ideas or having children and wanting financial security for them because a spouse will inherit, a life partner won’t.
But for two people without kids where one is not financially dependent on the other? Absolutely no reason. Not only do you have to pay almost twice as much taxes but you only get 150% max of AHV pension as a couple instead of 100% per individual. So more taxes, less pension as a married couple.
Thanks for the useful info – as a newcomer to Switzerland this blog is most useful. I’m still a bit confused regarding deductions if you are taxed at source – as a train/bike commuter who is also paying for his and his partner’s health insurance (one income household, no kids), would it be worth doing the extra declaration for travel/meals/health? Obviously each case is different but if there’s a chance of a significant deduction, it would make sense to do so, right?
Hi J
It depends on too many factors to say. You would need a significant deduction and a significant income for it to be worth. There is really no sure way of knowing. You can try to compute your taxes in your canton software and see the totals. Then, you can compare the total with your current taxes. But even that is an estimation.
If it’s a small deduction, I would not worry about that. If you can deduct 3000 CHF for instance, that’s only deducted from your taxable income, not 100% applied to your taxes. So, unless you have a high marginal tax rate (relatively unlikely below 120k CHF income), it is probably not worth it.
Hello J
It really comes down to which commune you live in and what the tax is there. The tax at source is an average of the whole canton what people pay for each income, if you live in a cheaper than average commune, it’s likely you will get something back with ordinary taxation, if you live in an above-average taxed commune, chances are even if you have deductions you will have to pay more in the end. You could use online tax calculators by the cantonal websites and you can ask a tax advisor to play with your numbers and tell you if it’s worth it. Remember if you do it once, you have to do a tax declaration every year and will always be ordinarily taxed so you should have the same amount of deductions every year guaranteed, don’t just do it because you have one year of an extraordinary amount of deductions.