New to Switzerland: what awaits you on the tax side

You have just arrived, you have a contract and a B permit. On your first payslip there is a line marked “withholding tax” that nobody has explained to you, and no administration is asking you for anything. That is normal: in Switzerland, the tax of a B permit holder is deducted by the employer, month after month.

It is not a tax reserved for foreigners. It is the same federal, cantonal and communal income tax that Swiss residents pay — only the manner of collection differs. The comparison of the two regimes sets out the mechanism; this page deals with your first year.

The B permit places you at source

Taxed at source is any employee domiciled in Switzerland who does not hold a settlement permit (C permit) and who is not married to a person of Swiss nationality or holding a C permit. The B permit, the L permit and the F permit all fall under this regime.

Your employer applies a tariff published by your canton, withholds the corresponding amount and pays it to the administration. The tariff depends on four parameters only:

• The amount of the month’s gross salary, including bonuses and the thirteenth salary paid that month.
• Your civil status, and whether or not your spouse carries out a gainful activity.
• The number of dependent children giving entitlement to family allowances.
• Your membership of a church recognised by the canton, where church tax is levied at source.

The tariff code appears on your payslip: a letter, a digit, then a final letter. It is worth checking from the very first month — a mistake costs more here than elsewhere, because it repeats twelve times.

Your first year is incomplete

If you arrived in May, you have received only eight months of salary. The administration does not for that reason tax you as if you had earned a reduced annual income: to determine the rate, it scales your salary up to twelve months. You are taxed on what you actually earned, but at the rate that would correspond to a full year.

The rule is logical — without it, every newcomer would enjoy an artificially low rate — but it is surprising, and it has three practical consequences.

• The threshold that makes ordinary taxation mandatory, set at CHF 120'000 of gross income, is likewise assessed on income scaled up to twelve months. A high salary over eight months may cross the threshold.
• Non-periodic income — a joining bonus, a one-off premium — is not converted: it counts as it stands.
• Social deductions, those tied to your family situation, are on the other hand granted in proportion to the duration of your liability.

The flat rates tied to days worked follow the same logic: the meal and travel costs of a year beginning in May are worth eight months, not twelve. Pillar 3a, however, escapes that pro-rating — the annual ceiling remains whole as soon as you have received income subject to AHV. That is a useful difference in the first year, set out in the pillar 3a guide.

The first weeks, in order

1. 01

   Register your arrival with the municipality

   Within fourteen days and before you start work, at the residents’ registration office. It is this registration that fixes your tax domicile, and therefore your canton and municipality of taxation.

2. 02

   Give your situation to your employer

   Civil status, spouse’s activity, children, religious affiliation. It is on that basis that they choose the tariff, and they guess nothing.

3. 03

   Take out health insurance

   Mandatory within three months of arrival, with retroactive effect to that date. Premiums are only partly deductible, and only under ordinary taxation.

4. 04

   Check the first payslip

   The tariff code, the number of children, the canton. A mistake spotted in February can be corrected; the same one spotted in December requires a procedure.

5. 05

   Keep everything

   Payslips, contract, housing certificate, transport invoices. You may never need them — and if you do, it will be a year later.

When the regime switches without asking your opinion

Three events end withholding taxation, and two of them do not depend on you.

The C permit is generally obtained after ten years of residence, five for nationals of States bound to Switzerland by a settlement agreement. Note the nuance of the third case: mandatory subsequent ordinary taxation does not stop if your income falls back the following year. Once in, you stay in until the end of your liability at source.

The calendar of the first tax return

If you decide to request ordinary taxation, or if you are obliged to, the first year follows a tight calendar. Nothing starts before January.

1. 01

   January – February: the salary certificate

   Your employer hands it to you. It carries the net salary and the total tax withheld — see how to read it.

2. 02

   February – March: the estimate

   Compare what you would have paid under ordinary taxation with what was withheld. An arrival mid-year, a move or distant accommodation weigh heavily.

3. 03

   Before 31 March: the request

   A forfeiture deadline, with no extension and no catch-up. After that date, the year is definitively closed.

4. 04

   Spring: the access codes

   The canton confirms and sends you the credentials for the ordinary tax return. Allow a few weeks.

5. 05

   Then: the return, then the decision

   The filing deadline appears on the document and can generally be extended on request. The assessment decision, on the other hand, arrives several months later, sometimes more than a year.

The complete procedure, canton by canton, appears on the dedicated page.

The mistakes of the first year

• Believing that the administration’s silence means all is well. No letter will tell you the withholding is too high: it is up to you to check.
• Waiting until the second year to deal with it. Each year is requested within its own deadline, and nothing can be made up after 31 March.
• Requesting ordinary taxation as a reflex. It is irreversible and commits the following years — see the cases where it costs money.
• Forgetting to report a change in situation. Birth, marriage, separation, spouse’s activity: each changes the tariff, and the employer only learns of it if you tell them.
• Paying into pillar 3a believing the withholding will fall. It will not move: the deduction exists only under ordinary taxation.

Frequently asked questions