Withholding tax Switzerland: taxes for immigrants
After you move to Switzerland, you usually have to pay withholding tax. We explain when you need to pay tax, and what you need to know about withholding tax in Switzerland.
01.11.2023
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1. What is withholding tax in Switzerland?
Withholding tax is taken directly from your salary by your employer. A tax return is therefore not necessary for foreigners in Switzerland.
How much withholding tax you pay differs from canton to canton. Cantonal withholding tax is calculated as the average of the tax rates of all municipalities in the canton.
2. Who has to pay withholding tax?
In principle, the following groups of persons are subject to withholding tax:
Foreigners living in Switzerland with residence permits B and L.
Cross-border commuters.
However, there are some exceptions.
In the following cases you do not pay withholding tax, but are instead taxed directly:
You have a C (permanent) residence permit.
You are married to a Swiss citizen.
You are married to a foreign person who has a C (permanent) residence permit.
Withholding tax for cross-border commuters in Switzerland: what applies?
Depending on the canton, you pay a maximum of 4.5% withholding tax in Switzerland. In order to fall under the tax rate for cross-border commuters, you will need a certificate of residence from the tax office.
If you do not return to Germany for professional reasons for at least 60 days within one year, you will be subject to withholding tax as if you were resident in Switzerland.
You pay income tax in Germany. Taxes paid in Switzerland are deducted from your taxable income.
Cross-border commuters from Austria pay withholding tax the same as persons residing in Switzerland. You do not pay taxes in Austria.
For cross-border commuters from Liechtenstein, taxation depends on their type of employment:
Working for a private company: you do not pay any withholding tax in Switzerland. You pay taxes as normal in Liechtenstein.
Working for a public company with Liechtenstein’s financial participation: you do not pay any withholding tax in Switzerland. You pay taxes as normal in Liechtenstein.
Working for a public company without Liechtenstein’s financial participation : You pay withholding tax as if you were a resident of Switzerland. You do not pay any tax on Swiss income in Liechtenstein.
3. Subsequent ordinary assessment
In some cases, a subsequent ordinary assessment takes place for cross-border commuters with residence permit B or L, if:
You earn more than 120,000 francs gross per year.
You have taxable assets of at least 80,000 francs at the end of the tax year or tax period.
In a tax year, you earn additional income that is not subject to withholding tax of at least CHF 3,000. This includes, for example, income from self-employment, income from securities or alimony.
In the case of a subsequent ordinary assessment, you pay withholding tax monthly and fill out a tax return once per year.
Afterwards, you either have to pay taxes or you will receive a refund. The withholding tax already paid will be credited against the ordinary tax. This means you won’t pay double tax.
4. How does standard taxation work?
For ordinary taxation, taxpayers complete a tax return once a year. You provide information on your income, assets and possible deductions.
You usually pay taxes to the federal government, canton and municipality. Unlike withholding tax, ordinary taxes vary by municipality.
This makes the Swiss tax system different from that of certain other countries. Income tax goes directly to the federal government, not to the commune.
Important to know: In Switzerland, employees receive their wages without tax deductions – even if they are liable to pay tax. Tax must be paid once a year.
5. How much withholding tax do I have to pay in Switzerland?
The percentage and amount of your withholding tax should appear on your monthly pay slip and annual salary statement. Withholding tax is calculated on the basis of:
your gross income
your marital status
your religious denomination
your canton of residence
Your employer receives a tariff ruling from the communal tax office. This shows the respective tariff classification (A, B, C etc.). If the ruling does not correspond with the facts, employees can raise an objection in writing or in person at the appropriate communal tax office.
Example withholding tax calculation
The basis is a single, non-denominational employee with a gross monthly salary of 6,500 francs. This person would pay 240 francs in withholding tax per month in the cheapest canton – Zug. In the most expensive canton – Neuchâtel – the monthly tax is 910 francs (last updated September 2023. Source: Comparis withholding tax calculator).
With the Comparis withholding tax calculator, you can easily calculate how much withholding tax you’ll pay – online and free of charge.
When do I have to pay withholding tax?
The tax due will be deducted from your gross income automatically each month. Your employer then pays it directly to the responsible tax authority in Switzerland. You do not have to submit a tax return in order to pay withholding tax.
This article was first published on 01.10.2010
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