Switzerland Tax Laws and Regulations

Home » Countries » Europe » Switzerland » Switzerland Tax Laws

Switzerland Tax Laws

Dealing with tax, payroll, and employment regulations for your staff from overseas is always tricky and poses complications that demand expert guidance. Switzerland is no exception, with liability at federal, canton and municipal levels applying to personal and corporate taxation.

With over 20 years’ experience in the front rank of international payroll providers, Bradford Jacobs ensures our clients comply with every level of taxation and employment law across the globe. Our ‘knowledge’ is vital for foreign companies expanding into Switzerland.

Switzerland has a complex and multi-layered tax system which operates federally with the Federal Tax Administration (FTA), plus individually through 26 cantons and local municipalities. Additionally, the Federal Social Insurance Office (FSIO) administers social security for a workforce that enjoys strong protection in terms of benefits and entitlements.

Overview of Taxes in Switzerland

Switzerland has a complex tax structure. Taxation is collected at federal level, by 26 individual cantons and also by municipalities. In some cases, the church also levies taxes. At the personal level there are different rates for single taxpayers, married couples or single taxpayers with children.

Personal Income Tax:

Federal taxes for single taxpayers have 11 bands beginning with a tax-free allowance up to CHF 14,500 (€14,000, US$15,830). Rates on the various taxable excesses range from 0.77% up to CHF 31,600 (€30,500, US$34,500) to a maximum 11.5% for income over CHF 755,200 (€728,966, US$824,393), although the previous tax band has a liability of 13.2%.

Federal taxes for married couples or singles with minor children have a tax-free allowance of CHF 28,300 (€27,316, US$30,890). Fourteen further tax bands reach a maximum 11.5% on income above CHF 895,900 (€864,760, US$977,730), although the previous tax band has a liability of 13% on taxable income.

Cantons add personal taxes to the federal levies. In Zurich canton, for example, single taxpayers’ liability begins at 2% on taxable income from CHF 6,700 (€6,466, US$7,312) through a further 11 bands to a maximum of 13% on income above CHF 254,900 (€246,034, US$278,218).

Additionally, in each of the 26 cantons the various municipalities also apply communal tax and church tax, if applicable. Overall tax burdens can therefore range between 22.5% and 45.5%.

Social Insurance Taxes: Employers and employees equally share 10.6% of salary towards old age, survivors, and disability insurance; 2.2% towards unemployment insurance capped at CHF 148,200 (€143,061, US$161,676); 1% towards supplementary unemployment insurance above CHF 148,200. Additionally, employers contribute between 1% and 3% towards family compensation fund, uncapped; 0.17% and 13.5% to occupational insurance, capped at CHF 148,200. Employees contribute between 1% and 4% to non-occupational accident insurance.

Corporate income Tax (CIT): Companies are taxed federally at 7.83% on pre-tax profits and 8.50% after tax. Depending on location in Switzerland, total CIT from federal, cantonal, and municipal corporate taxes ranges between 11.9% and 21.6%. Federal liability is paid by March 31 of the following year, but deadlines vary between cantons. Resident companies are taxed on their worldwide income.

Withholding Tax (WHT): Rates on dividends, royalties and interest vary between 0% and 35% depending on whether companies are resident or non-resident and any tax treaties with other countries.

Capital Gains Tax (CGT): According to where companies are based in Switzerland, CGT rates vary between 11.9% and 21.6%.

Value Added Tax (VAT): A standard rate of 7.7%.

Net Wealth Tax (NWT): This does not apply at federal level, but cantons and municipalities apply taxes between 0.15% and 1.01%.

Swiss Individual Tax – Single, Married

Tax liability is based on residency and with different regimes depending on marital and family status. Liability is at federal, cantonal, and municipal levels with the addition of church taxes where applicable. Residents are taxed on their worldwide income in a tax year running from January 1 until December 31, while non-residents are taxed on certain categories of income earned or accrued in Switzerland.

* As a guide these are selected amounts of taxable income that apply to federal taxation. In all cases, cantonal, municipal / communal taxes are added, plus church taxes in some instances.

In Swiss francs CHF, Euros and US dollars

Single taxpayers

From	To	Percentage on excess
Tax-free allowance up to 14,500 (€14,000, US$15,830)
14,500	31,600 (€30,500, US$34,500)	0.77%
31,600	41,400 (€39,886, US$45,230)	0.88%
(Five further bands between	41,400 – 103,600 between 2.64% and 8.80%)
134,600 (€129,765, US$147,102)	176,000 (€99,880, US$113,236)	11.0%
176,000	775,200 (€747,110, US$846,781)	13.2%
Over 775,200		11.0%

Married taxpayers and single payers with minor children

From	To	Percentage on excess
Tax-free allowance up to 28,300 (€27,284, US$30,928)
28,300	50,900 (€27,280, US$30,924)	1.00%
50,900	58,400 (€49,071, US$55,627)	2.00%
(11 further bands at 1.00% increments between 58,400 and 145,000 (€139,777 US$158,460)
1445,000	895,500 (€863,195, US$978,685)	13.0%
Over 895,500		11.5%

Additionally, in each of the 26 cantons the various municipalities also apply communal tax which, with church tax, can create total tax burdens between 22.5% and 45.5%.

Employee Social Insurance Contributions (as percentage of salary):

Insurance	Percentage	Cap
Old age, survivors, disability	5.30%	No
Unemployment	1.10%	CHF 148,200 (€142,687, US$161,700)
Supplementary unemployment	0.50%	Above CHF 148,200
Non-occupational accident	1.00%-4.00%	CHF 148,200

Employers deduct the employees’ share from their gross salary and remit to the social insurance authorities.

Download Guide

Back to Main Page