Is Switzerland really So Expensive in 2021?

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Is Switzerland really So Expensive?

People often cite Switzerland as the most expensive country in the world. Several of its cities, Zurich and Geneva, are also often named in the list of most expensive cities in the world.

Now, is it as expensive as people believe it is? Is everything more expensive, or are just some items significantly more costly than others? And finally, are some things cheaper in Switzerland than in other countries?

In this post, I am going to answer these questions. We are going to discuss the price of several things in Switzerland. It should give us enough material to answer the question of whether Switzerland is so expensive!

Groceries

Grocery shopping is costly in Switzerland. If you have been in any other country, it should be pretty clear that groceries are too expensive here!

If you shop at a medium price shop like Coop and Migros, you can save a lot of money by buying in another European country. However, if you shop at a German discounter like Lidl or Aldi in Switzerland, you will not save that much money. Aldi and Lidl are reasonably priced in Switzerland. And you do not have to cross the border and drive your car far for that!

This fact is especially true for Swiss products. For instance, Swiss meat is incredibly expensive. Except for pork, we rarely buy Swiss meat. It is kind of sad. But I am not willing to pay 50% more for Swiss meat. It is good quality, but it is not that much different in my mind. Many people go to the butcher in France to have cheaper meat, especially beef.

Even though grocery shopping is expensive in Switzerland, there are ways to reduce your food budget. It is mainly done by avoiding Swiss shops and preferring the German discounters. And if you want to lower your bills, you will have to opt for some foreign products.

Shopping

Unsurprisingly, shopping is expensive in Switzerland, even in small cities. For some reason, magazines are significantly more expensive in Switzerland than in other countries. We pay around twice the price of the same magazine in France or Germany.

Cosmetics and clothing are also quite more expensive in Switzerland than in the rest of Europe. Shoes and toys are also a little bit more expensive.

Now, all of these results are based on average prices. If you look for it, you can find cheap clothes in Switzerland, for instance. There are such vast differences between shops that the average is quite high.

For instance, shops like H&M and C&A are not that much more expensive in Switzerland that in other countries. But the average is highly skewed towards luxury items.

Electronics

Electronics are cheaper in Switzerland than in all neighboring countries. It is as cheap as the United States and even cheaper than China for several things.

Laptops, phones, and such are available at an excellent price in Switzerland. I said obscure reasons because that is the only consumer product that is cheaper here than in Europe. And nobody seems to know why. One reason is that the tax on these products is lower than the average in Europe. But that does not explain everything.

I see several possible reasons for that:

  1. All electronics are built abroad with cheaper employees.
  2. A lot of electronics are coming from the U.S. (after being assembled in China) or from China. And our currency is quite strong against theirs.
  3. The VAT on electronics is 7.7%. It is very low compared to some countries such as the U.S., with about 18% VAT on these products.

I am not sure these are the only reasons. But at least, we are lucky to be able to purchase electronics at such prices. For me, it is almost not a good thing since I really like computer gadgets. So I spend too much on them. But it is not that bad.

These days, the best way to buy electronics in Switzerland is to shop online. I have a guide for shopping online in Switzerland.

Going out

Another very expensive thing in Switzerland is going out. Almost everything that you can do to go out is too costly, in my opinion.

Restaurants are costly. Unless you go to a fast-food restaurant, it is difficult to find a meal for less than 20 CHF. And most menus are generally around 50 CHF. And if you add some drinks to that, it can very quickly add up. I may be cheap, but I do not enjoy spending around 100 CHF for an average dinner out.

Even for Swiss people, I feel like restaurants are very expensive. In a lot of countries, you can regularly go eating out. But in Switzerland, eating out often would be very expensive.

If you want to go to the movies, you should plan at least 20 CHF per person if you wish to have a drink or a small food item. These days, I am very rarely going to the movies. There are other ways to have a good time. And going to the city just for a movie does not appeal to me anymore. We can watch good movies at home, on a better sofa.

Other activities are quite expensive as well. Going to the museum or the theater (the actual one) is not cheap either.

Real Estate

Something that is very expensive in Switzerland is Real Estate. Both renting and buying are costly.

Switzerland is one of the countries with the lowest house owners percentage. Two-thirds of the population in Switzerland is renting, even outside of cities. The main reason people are not buying is because of the very high price for real estate.

And the fact that so many people are renting drives up the price of rent. It is a vicious cycle. And let’s not forget that the country is quite small. With the strong regulations that are in place, it cannot expand very fast.

There is one good thing about real estate is that interest rates are very low. So, you will need a substantial downpayment, but you will pay less in interest payments.

Even though the price of entry is higher, it is cheaper in the long-term to own a house than to rent. I mentioned houses because houses are particularly expensive to rent.

If you want to learn more, I have a guide about owning versus renting in Switzerland.

Transportation

Public Transportation is very expensive in Switzerland. I do not like the Swiss public transportation.

It costs me about 60 CHF to go to Geneva by train. And it costs me 16 CHF to go by bus to work and come back. It is simply insane.

If you can take a travel card, it becomes fairer. But a general card to travel in entire Switzerland will still cost you about 4000 CHF per year. And remember that the country is tiny! If you do not have a card, taking public transportation is very costly! Single fare tickets in Switzerland are the most expensive from any country I have ever visited.

Cars are also more expensive than in other countries in Europe. However, gas is cheaper than in most developed European countries such as France and Germany. But you will pay a ton of taxes on your car, and you will have mandatory insurance. Overall, it is probably about 20% more expensive in Switzerland than in the average European country.

Education

In Switzerland, we have an excellent education system, probably around the best in the world.

But contrary to many things in Switzerland, education is affordable. The states fund public schools. This federal funding means you will not have to pay any tuition fees.

And even advanced education such as for Bachelor and Master degrees is subsidized by the state. You will very rarely pay more than 2000 CHF per year for a school. And this is already on the high of the fees. My parents never spent more than 1200 CHF per year for my education.

The Swiss education system is incredibly better than the crazy system in the United States, where students end up with tens of thousands of dollars in student debts.

However, you need to keep in mind that most schools are charging significantly more for foreigners. If you are not Swiss, you may have to pay more than, especially at the university level.

Medical Costs

Healthcare is another thing that is very expensive in Switzerland. Here, health insurance is mandatory. Every member of your household will have to pay health insurance. It can quickly go for 300 CHF per person and month.

And even though you are insured, there are still many things you will have to pay for yourself. Each insurance also has a deductible. And a visit to the doctor or some drugs at the pharmacy can very quickly pile up.

Together my wife and I pay close to 800 CHF per month in health insurance. And we still have to pay almost everything ourselves because of our high deductible.

You can learn more in my guide to health insurance in Switzerland.

Tourism is expensive

A trip to Zermatt will cost a lot of money
A trip to Zermatt will cost a lot of money

One reason that many people say that Switzerland is so costly is that tourism in Switzerland is expensive.

I already mentioned that restaurants are costly. It is already bad for tourists. But the hotels are also expensive. In most cities, even cheap ones, it is complicated to find a hotel below 150 CHF per night. And some hotels are much more expensive than that.

And if that was not enough, popular attractions in Switzerland are incredibly expensive, even from a Swiss point of view. For instance, if you want to go to the Matterhorn, the most famous Swiss mountain, you will have to pay about 100 CHF per person! I think this is just dumb. All around popular Swiss attractions, prices are going up very quickly.

Even for Swiss people, going to these very popular places is very expensive. Even though it is a pleasant experience to go to the Matterhorn, I do not think it is worth more than 100 CHF per person.

The high cost of tourism is a big reason why most Swiss people do not travel much in Switzerland. For us, it is cheaper to travel to European countries than it is to travel to Switzerland. It does not make sense, right?

If you want to travel abroad instead, find out how to travel abroad for less.

Taxes in Switzerland

One thing that is good in Switzerland is that taxes are very reasonable. Switzerland is among the cheapest countries for taxes. We pay taxes on income and wealth in Switzerland.

On average, people are paying about 10.5% of their net income in taxes. However, we are also paying taxes on our gross income. These extra taxes are directly removed at the source, so we never see it. It is about 5% of our gross income on average. So I would say that the real tax average is about 15%.

This average is much lower than in many other countries. For instance, people in the U.S. pay 18% on average, and people in Denmark are paying 36%!

Of course, there are vast differences between the different states in Switzerland. In some situations, taxes can double from one state to another.

Now, it is essential to consider that we also pay some direct taxes based entirely on our gross income. These are deducted directly from our salary every month. Some of these deductions are for our pension, so they should not be counted as taxes. However, we also pay for the invalidity insurance directly from our salary. It needs to be taken into account when comparing with other countries.

If you want to learn more, I wrote a complete guide about taxes in Switzerland.

City differences

Zurich is the most expensive city in Switzerland
Zurich is the most expensive city in Switzerland

When foreigners talk about Switzerland, they often think of places like Zurich or Geneva. And these two cities are the two most expensive cities in Switzerland. Therefore, foreigners directly believe that Switzerland is incredibly costly everywhere. Even some people from Zurich and Geneva think that the prices are the same all over Switzerland.

They could not be more wrong! There are huge differences between cities in Switzerland. It is several times more expensive to live in Zurich city center than to live in a small village in the state of Zug.

For instance, a standard apartment for 4000 CHF per month is not that surprising in Zurich. But in Fribourg, it would be incredibly expensive. You could have a prime apartment in the center of the city for this price.

On average, Switzerland is much cheaper than these two expensive cities. And while it is true that Switzerland is expensive, it is not as extreme as some people believe.

If you want to learn more about the differences between cities and states, read about Geo-Arbitrage in Switzerland.

Income in Switzerland – It is all relative

The high income of Swiss people can explain a lot of the expensiveness of Switzerland.

The median income in Switzerland is about 6200 CHF (6200 USD) per month. The median income in Switzerland is significantly higher than in most countries. There are some significant discrepancies between cities and states and also between jobs. Interestingly, the average income is considerably higher at around 8000 CHF.

Even when you put together the high income with the high prices of Switzerland, we still have a high purchasing power in Switzerland. We do have one of the highest purchasing power in the world. Purchasing power is more important than price.

A very good representation of purchasing power is the so-called Big Mac Index. It compares the price of a Big Mac in every country and compares how long it would like for a person to work to afford one.

This study shows that Switzerland has the most expensive Big Mac in the world at 6.57 USD. However, we only have to work about 11 minutes to get one. For comparison, for a much cheaper Big Mac, a worker in Beijing need to work 42 minutes for it. It is a perfect way to put things in perspective.

Conclusion

Switzerland is indeed expensive compared to the rest of the world. Many things are significantly more expensive here than in most countries.

From my point of view, I do not think that Switzerland is expensive overall. We have high incomes and low taxes. Even with the comparatively high prices, we still have a nice purchasing power. However, I think that some things are too expensive here.

Mainly, I think that health care and public transportation are too expensive. I would also say that real estate is in a pretty bad shape right now.

From a tourist point of view, Switzerland can seem extremely expensive. If you have a good salary in your country, but that country is twice cheaper than here, you may be shocked by the prices here. And it is indeed a costly place for tourists.

If you want to learn more about how people spend money in Switzerland, read about the Average Swiss Household and their expenses.

What about you? Do you think Switzerland is so expensive?

Mr. The Poor Swiss

Mr. The Poor Swiss is the author behind thepoorswiss.com. In 2017, he realized that he was falling into the trap of lifestyle inflation. He decided to cut on his expenses and increase his income. This blog is relating his story and findings. In 2019, he is saving more than 50% of his income. He made it a goal to reach Financial Independence. You can send Mr. The Poor Swiss a message here.

26 thoughts on “Is Switzerland really So Expensive in 2021?”

  1. agree on most things, except the public transportation system where I totally disagree: public transport is LESS expensive vs other countries if you consider the broad network, punctuality, frequency and quality. I doubt you would get these for that level of price in the UK or in France for instance, especially if we take the salary level into consideration…

    Consider the half-fare card and the supersaver tickets to save costs. A lot of companies offer the half-fare card to their employees, or REKA checks up to 20% discount

    But of course if you (really) need to have a car to commute to work for example, and if you take public transportation from time to time, obviously this is more expensive as using either way of transportation

    We are a family of 4 living in Zurich and have no car since more than 10 years (when many of my friends in similar conditions do). We pay no more than 2500-6000 CHF per year (the amount is depending on the workplace locations) for public transportation for all of us, for commuting to work + leisure travel. Public transportation is for sure not always as convenient as a car, but way cheaper and more eco-friendly than a car, if you consider all costs of a car: amortization, SMR, fuel, parking, insurance etc

    1. Hi Judit,

      I guess the perspective on this highly depends on where you life. Of course, if you live in Zurich, the coverage will be great. If you live outside cities, the network is not that good, especially considering the frequency.

      Single-tickets are still at a terrible price here. I still cannot say that they are even decent. I have to pay 15.20 CHF to go to work and back on the same day from my home and that’s less than 20 minutes with a bus. In most countries, I could take a several-hours bus for that price and it would still be cheaper.

      I could nuance my post saying that if you do not need the GA card and live in a city, it is probably not that bad compared to other countries.

      We also have to put into perspective that our country is tiny. If you take the GA card and compare it to another country, it is the same a regional transportation card.

      But congratulations on keeping your transportation fees for 4 on that level, it’s really good!

      Thanks for stopping by!

  2. Electronics are less expensive in Switzerland (vs other European countries), because of two reasons. It is actually not such a big mystery at all when you think about:
    1) Most electronics come from the USA and even if they were manufactured in China, their manufacturing cost would still be priced in US dollars. As we all know, Swiss Franc is stronger in dollar buying terms than other European currencies vs USD.
    2) Lower VAT amount in Switzerland of 7.7% for the consumer, than in other European states where it is around 18%-22%. Can make a big difference on costly items.

    1. Hi Marcus,

      That’s a good analysis!
      With the Swiss franc so strong, we have access to cheap U.S. products. On the other hand, the dollar used to be much more expensive and electronics were still fairly priced.
      But I think that the VAT makes a lot of difference indeed! I didn’t think of that :)

      I will try to incorporate this in the post.

      Thanks a lot for stopping by!

  3. Taxes are much higher in Switzerland than everyone is assuming. This is because some expenses are deducted seperately from income while in other countries they are included in the taxes.

    For example: AHV, ALV, BVG (can be discussed as most if it belongs to you), health insurance: dentist costs not covered, “Billag” and more.

    For someone who is self-employed, you can easily reach >40% marginal tax rate if you are not living in a low-tax canton just with 30% marginal tax rate + 12% AHV/IV/EO/ALV.

    1. Hi Marco,

      This is a very good point! I agree with the direct taxes that are deducted from your salary. Depending on your age, this can easily be 10% of your gross income, which is a lot.
      I do not agree that health insurance is a tax even it’s mandatory. But I see your point. As for the dentist, I do not agree. It’s a choice to go to the dentist and some people have much higher expenses than others.

      Thanks for stopping by!

    2. 100 % on this, Marco. Taxes in Switzerland are high, especially for singles or no kids couples. Especially in French part. Compared to Zug or Schwyz taxes in Geneva are two times higher or more! Even in Zurich my tax rate would be 60 % of what is due to me in Geneva. I really think about moving there, French language is nice, I like the place and people, but these are too big differences to ignore. And system is damn complex – first time filling tax form cost me way too much stress. It is like small book, lots of pages, not any simple sheet with 2 pages like it should be.

      On the top of this, Switzerland has wealth tax, this is such an absurd. I would not mind paying this for assets located in Switzerland, kind of “fee” to live here and Swiss army protects my ass, I live in great country and pay taxes on assets here, no problem. But I have to declare all my assets, including whatever is I left in my home country – on what grounds? This tax is small (not so small in Geneva!), but it enrages me, it is just not logical.

      1. Hi HaEs,

        I agree with you on the wealth tax. This is something that does not make sense. This is double taxation at its best. We are already taxed on income and income is what makes our wealth. It does not make sense to tax wealth again.
        And I also agree with you that the system is too complex! And some people do not know of the reductions they can have, so they end up paying too much. People should have to remember to deduct money, the tax office should do that by itself.
        On the other hand, I still think of the tax system as fair. But maybe once I start paying much more, I will not agree :P

        Thanks for stopping by!

        1. You will not pay high taxes if you have 2 children or more. This is very good part in Swiss system – chilren reduce your taxes almost to zero or negligible %. If you have 3 or 4, you basically do not pay any taxes on income (unless you earn hundreds of thousands per year, have huge wealth etc).

          Re wealth tax – man I hate that wealth tax. It is whole discussion etc, but taxing people above 82 000 CHF (deduction from wealth in Geneva) is ridiculous. If you are frugal, saved 200-300 000 (which is not that high at all in Switzerland) and have no kids (kids allow for more deductions) in Geneva you will pay 450-600 CHF per YEAR. If you will sucessfully invest and have more money, you will pay much much more. Again, I am not mad about the amount, just plain background – this tax feels extremely unjust, becuse it taxes frugality, on most people.

          1. It seems we have to make children to save money :)

            Yes, it does tax frugality and success. If you save a lot of money and invest it well, you will pay more taxes on it. It makes sense to me to pay money on income, but wealth, meh :(

      2. Hi,

        you are really buying meat in France? I was always so proud of Swiss people that they can offer that much swiss product (even for that price)! I actually got used to the prices of meat. What I do find expensive is the ham and the strawberries :-)

        I agree for the electronics. While one would buy the meat abroad, the electronics was ok.

        I love public transport in Zürich! Clean, on time, and save. And actually, the one day ticket is about the same price in Prague, which means, that for the Czech people it is quite expensive! But it is more for the tourists :-)

        Billag, yes, little bit annoying. But we have it the same in the Czech Republic. And since even the radio in the car counts, usually everybody has to pay it.

        Michala

      3. Hi,
        isn´t it the opposite – that the married couple has higher taxes? I heard jokes, that some married couples were thinking of divorcing after realizing the tax impact :-)
        Michala.

        1. That depends on the situation.

          A couple with two incomes will be taxed more when married.
          A couple with a single income with be taxed less when married.

          But these are only rules of thumb since this will change from one state to another.

  4. Very interesting. I knew that you have high salaries, but I didn’t know that your tax rate was SO LOW!
    “On average, people are paying about 10.5% of their income in taxes.”

    When you earn much and don’t pay too much on taxes, it is only natural that your prices are so high. But I think that it is great country for FIRE because you can still save so much!

    Greetings from Northern Europe.
    – FN

    1. Hi Financial Nordic,

      As someone pointed out in the comments, this only accounts for taxes that are paid on net income. We also pay some direct taxes on gross income, about 5% (can be higher for older people). So the average is probably closer to 20% when taking this into account.

      I think it’s an okay country to retire. But you will need to accumulate a very large stash of money to be able to retire here.

      Where are you planning to FIRE?

      Thanks for stopping by again :)

  5. Good article, Switzerland is maybe 10 15% more expanses for groceries than Belgium. However Belgium median bruto Income is 3000 and after butchering the taxes its comes to about 2000e netto. However Switzerland incomes are almost as triple than Belgium for experienced worker, no doubt the prices are good and fine. Coca Cola costs less in Switzerland than Belgium. I feel like a fool choosing Belgium.

    1. Hi Allan,

      Yeah, compared with most of the neighboring countries, the purchasing power is really great.

      Belgium is also a very nice country. We went there a few months ago. It is nice in Bruxelles. But I did not know the difference was so large income.

      Do you know why Coca is more expensive in Belgium?

      There are always places where you could earn more and spend less. In the end, it is just a matter of balance. I could earn more in Zurich or in the bay area. But I would not be as happy as now.

      Thanks for stopping by!

  6. Switzerland…expensive? Could be in Geneva, Zurich, Bern or Lausanne, where all idiot expats try to establish and push up prices.
    The rest of the country is quite well affordable for the typical medium-class swiss. If you have the luck of working in a small/medium city in the middle of nothing, in the industrial/IT sector, maybe your salary could be not so high (or maybe yes :-)…), but your buying power will multiply more than twice compared with Zurich or Geneva!!! You feel like God after cutting more than half the rent cost and food expenses, or commuting by free bike, simplily wonderful.
    And we have not talked about being a frontier worker, swiss salary and european prices, the best of both worlds, the final purpose of any pursuiter of FIRE.

    1. Hi LCM,

      For the medium-class Swiss, it’s quite affordable indeed. And even for the medium-class from Zurich, Zurich can be affordable.
      But if you compare to the rest of Europe, it’s very expensive, even in places that are not Geneva and such.
      If you like, you could indeed live in France and work in Switzerland if that’s what you want. But that’s not something I would consider (knowing quite well what I am paying for not doing it).

      Thanks for stopping by

  7. When buying, all things “local” are expensive – going out, local services, food produced in Switzerland etc. Almost all things that are imported are fairly cheap. Electronics are shockingly cheap, but other things like cars or clothing do not kill your budget either. This is thanks to very strong CHF and pretty acceptable taxes. Ah, and also I think, thats partly because of the way how this country functions – there is no place for waste, all is well organized (logistics etc), which reduces cost of import, distribution. That’s probably not much, but always something.

    Second, Switzerland is expensive to tourists or other incoming folk (one night sleepover, airports). Purchasing power of their salary here is way lower, which makes visiting Switzerland super exspensive. However, whoever comes to Switzerland, please do not make assumptions on Swiss prices buying water in railway station shop or in the airport! Prices there are out of sync with reality and any common sense. Still, 4 CHF for 1 kg of apples in local shop may be 5 or 8 times more expensive than in their/your country (and in my country too, because I am still permit B and apples in my country cost 0.5 CHF per kg :))

    And third – it is all about that above mentioned purchasing power. Average salary in Geneva allows you to buy 3100 litres of gasoline while in my home country – 802 litres. And this is same for everything else, almost. Swiss franc, locally, allows to purchase 3-5 times more for the same amount of work you do. Therefore, Switzerland is great country for those frugal ones.

    Btw, nice comparison site here, you can check many cities or countries (not sure if I can post a link, it is safe but please remove if not) https://www.numbeo.com/cost-of-living/comparison.jsp

    1. Hi HaEs,

      That’s a good point, local products are much more expensive than imported products. But there are some discrepancies. For instance, Swiss pork is very cheap while Swiss chicken is way too expensive.
      It makes sense that a good organization could lower a bit the cost of importing.

      I completely agree that people should not judge based on prices from the train station or airport. These prices are just plain stupid even for a Swiss. I never buy anything at an airport or a train station in Switzerland. And I would recommend that nobody does!
      You can have cheaper apples than 4 CHF per kg, though :) We buy apples at 3.99 CHF for 2.5kg :) This does not beat your 0.5 CHF per kg though obviously. But this is a fair price I think.

      Yes, purchasing power here is really good. And there are some very good places to shop for less around here. But I agree that with a good salary, Switzerland is pretty good. The problem is that with an average salary, it’s not that great.

      Yes, no problem with that link. It seems interesting. Too bad the site blocks itself with an adblocker (although not very difficult to bypass). It’s a really good tool to compare purchasing power. Even though Zurich is much more expensive than my city, it still have more purchasing power given the much higher average salary.

      Thanks for stopping by!

  8. that adblock check must be new thing, I have noticed that too. Been using it for 3 years now and it never checvked for Adblock, now it does. But the page is good, it is fed by locals/residents data and system cuts off extremities , leaving the median. It is almost perfectly precise for my native home city and quite good for others where I have been. The only thing which I think is not precise are rent prices – they are way higher than on the market. Anywhere I lived, I paid less.

  9. Nice article. There are a couple of Things that stood out to me. First, there is no VAT tax in the USA. Each locality has its own Sales tax and that varies from place to place and some places (such as the state of Delaware) don’t have a Sales tax at all. The highest Sales taxes in the US hover around 8-9%.
    Next, I don’t find Health insurance expensive in Switzerland at all. It is actually less that what I was paying in the USA and in Germany.
    Next, I find that if one is earning a typical Swiss salary, life is quite affordable. Our Budget for a Family of 3 is around 5,600 CHF per month including rent, Shopping at COOP, leisure activities, insurances, etc. I am able to save and invest a lot of Money every month in spite of what is considered a high cost of Living here. I made a few Videos detailing our expenses on my YouTube channel “Lisa Culton” in case anyone is interested in the real numbers.
    https://www.youtube.com/c/LisaCulton

  10. You missed elaborating on daycare costs :-)
    With a kid in daycare, my costs explode and it may even discourage work for the partner who earns less…. this is a bit disappointing. Sometimes I feel that this is not the most ‘family friendly’ place and some rules foster old-fashioned role models when it comes to roles of mother and father and so on.

    1. Hi cpm,

      That’s a good point. Daycare is extremely expensive!
      Swiss system is really old-fashioned towards the mother at home and the father working. A lot of things make it difficult when not following this model.

      Thanks for stopping by!

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