Is Switzerland really So Expensive?

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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 really so expensive!

Groceries

Groceries are not as expensive as people think in Switzerland
Groceries are not as expensive as people think in Switzerland

Grocery shopping is really expensive 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 I believe. And you do not have to cross the border and drive your car far for that!

This 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.

However, there are ways to reduce your food budget. It is mainly done by avoiding Swiss shop and preferring the German discounters.

Shopping

Unsurprisingly, shopping is expensive in Switzerland, even in small cities. For some reasons, 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 huge differences between shops that the average is quite high.

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 most things.

Laptops, phones, and such are available at a very good price in Switzerland. I said obscure reasons because that is the only consumer product that is cheaper here than in Europe. And nobody really 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.

Going out

Dining out is very expensive in Switzerland
Dining out is very expensive in Switzerland

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 had drinks to that, it can very quickly up. I may be cheap, but I do not enjoy spending around 100 CHF for an average dinner out.

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. I am going to the movies, maybe twice a year.

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 stupidly 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 people are renting so much drives the price of rent. This 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.

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.

Transportation

Public Transporation is very expensive in Switzerland. I really do not like it.

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 for entire Switzerland will still cost you about 4000 CHF per year. And remember that the country is tiny! But if you travel or if you have a car and want to take public transportation, it is very expensive! 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

Swiss education is quite cheap
Swiss education is quite cheap

In Switzerland, we have an excellent education, probably around the best in the world. But contrary to many things in Switzerland, education is affordable. The states fund public schools. This means you will not have to pay any tuition fee.

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.

This 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 some schools are charging 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 really expensive in Switzerland. Here, health insurance is mandatory. Every member of your household will have to pay health insurance. It can easily 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.

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 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 nice experience to go to the Matterhorn, I do not think it is worth more than 100 CHF per person.

Taxes in Switzerland

One thing that is great 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. This is 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 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. For 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.

This 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.

Income in Switzerland

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. This 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.

Once 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 very good 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 really expensive 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 really so expensive?

About the author

Mr. The Poor Swiss

Mr. The Poor Swiss is the main author behind thepoorswiss.com. In 2017, he realized that he was spending more and more every year, 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 2018, he saved more than 40% of his income. He made it a goal to reach Financial Independence. You can send Mr. The Poor Swiss a message here.

8 thoughts on “Is Switzerland really So Expensive?”

  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!

  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 :)

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