Tax at source in Switzerland in 2025

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):

1. If their gross income reaches 120’000 CHF per year.
   1. If you work only part of the year, they will use your average monthly salary and a limit of 10’000 CHF per month.
2. 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 CHF for individuals and 160k CHF for couples.
3. 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. This will also be valid for the following years, you will not be able to switch back later.

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?