Tax multiplier in Switzerland: what you need to know
The tax multiplier is an important factor for calculating the amount of tax. Comparis explains what it is and why each commune has its own.
29.11.2024
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1. What is the tax multiplier in Switzerland?
The tax multiplier is a key factor for calculating the amount of tax you pay. It is usually stated as a percentage and determines how much the taxes are in a commune or canton.
It is multiplied by the calculated simple tax (from the taxable income after deductions). This then results in the actual tax amount.
Direct federal tax is not multiplied by a tax multiplier. In other words: taxable income × tax rate = direct federal tax.
Types of tax multipliers
Just as there are various taxes in Switzerland, there are also different tax multipliers. There are tax multipliers for income, wealth, profits and capital. In many cases, the tax multipliers for income and wealth are identical, as are those for profits and capital. These tax multipliers are once again divided into tax multipliers for cantonal tax, communal tax and church tax.
Example 1: city of Zug (2024)
In the city of Zug, the communal tax multiplier for income is 52.11%. The simple tax is multiplied by this rate. So the amount is reduced.
Simple tax × 0.5211 = taxes due
Example 2: city of Zurich
In the city of Zurich, the communal tax multiplier for income is 119%. The simple tax is multiplied by this rate. The amount is therefore higher.
Simple tax × 1.19 = taxes due
Tax rate
The tax rate is at least as important as the tax multiplier. It indicates what percentage of your taxable income is used as the basis for the calculation. The tax rate is based on your income and is set by law.
The more you earn, the greater the share of your income that you have to pay as taxes. The tax rate therefore rises progressively.
2. How high is the tax multiplier in my commune?
Each canton and commune has its own tax multipliers. They are determined according to the financial situation and needs of the respective region.
3. Which commune has the lowest tax multiplier in Switzerland?
The lowest tax multiplier for the tax year 2024 can be found in the commune of Genthod in the canton of Geneva. There, the tax multiplier is just 25%. This makes the location very attractive for private individuals.
4. Which commune has the highest tax multiplier in Switzerland?
The highest tax multiplier for the tax year 2024 is in Lungern in the canton of Obwalden. The tax multiplier there is 525%.
Should I move to a commune with a lower tax multiplier?
Not necessarily. The tax multiplier only makes sense when compared within one canton. The tax rate is subject to cantonal differences. You may therefore pay less tax in a commune with a high tax multiplier but a low tax rate than in one with a lower tax multiplier but a high tax rate.
5. How can I save on taxes?
There are several ways to reduce the tax burden in Switzerland.
Use all possible tax deductions. These include professional expenses, insurance premiums and further training costs.
Do you have few ties to your place of residence? In that case, a change of residence to a more tax-friendly commune may lead to considerable tax savings.
Contributions to pillar 3a are tax deductible and can reduce your tax burden. At the same time, you contribute to your pension with the deposits you make.
In the case of property, the imputed rental value is taxed in Switzerland. This means that owner-occupied residential property is treated as additional income for tax purposes. However, you can save by claiming tax deductions for residential property.
6. FAQs
Communes and cantons face different financial challenges and resources. They don’t want to get into financial trouble or collect too much tax. Therefore, the tax multipliers differ and are adjusted to the economic situation.
No. Even the canton of Basel-Stadt has a different tax multiplier for its three communes. The same applies to the canton of Appenzell Innerrhoden for each of its five districts.
The tax multiplier can be adjusted annually by the communes and cantons. The calculations for this are based on budget and financial requirements.
However, the electorate has the option of initiating a referendum. In some communes, the tax rate is even determined at the communal assembly.
This article was first published on 19.01.2022
