Withholding tax in Switzerland: the guide for expats

Who pays withholding tax in Switzerland?

Subject to withholding tax are foreign employees with tax residence in Switzerland who do not hold a C settlement permit — typically people with a B permit, short-term residents (L permit) and cross-border commuters (G permit). Anyone married to a Swiss citizen or holding a C permit drops out of withholding tax and is assessed under the ordinary procedure.

Unlike Swiss employees, the employer deducts the income tax directly from the salary and transfers it to the cantonal tax administration. You therefore already receive a net salary reduced by the tax — in contrast to the ordinary procedure, where the tax is invoiced separately.

How is the withholding tax calculated?

The amount depends on three factors: the gross salary, the canton of residence and the tariff code, which reflects your family situation. Each canton publishes its own tariff tables, which already include cantonal, municipal and federal tax as well as flat-rate deductions.

The main tariff codes:

• Tariff A — single people without children
• Tariff B — married, only one person in gainful employment (single earner)
• Tariff C — married, both in gainful employment (dual earners)
• Tariff H — single with children in their own household
• Tariff D / others — secondary employment and special cases

A surcharge or reduction for church tax is added via the letter (for example “A with church tax” / “A without church tax”).

An important difference between cantons is the calculation model: most German-speaking cantons (such as Zurich) use the monthly model, in which each month is considered separately. Cantons such as Geneva, Vaud, Ticino and Valais calculate under the annual model, which smooths irregular salaries over the year. Anyone receiving a 13th month’s salary or bonuses sees different monthly deductions depending on the model.

The CHF 120,000 threshold

If your gross annual income exceeds CHF 120,000, in most cantons you are, in addition to the withholding tax, subsequently assessed under the ordinary procedure (NOV). This means: you fill in a tax return like everyone else, and the withholding tax already paid is credited against the effective tax debt. This NOV then also applies to all following years, even if your income later falls back below the threshold.

The advantage: you can claim all effective deductions. The disadvantage: in tax-favourable municipalities, the ordinary assessment can turn out higher than the flat-rate withholding tax.

Getting money back with the tariff correction

Even below CHF 120,000, a second look is often worthwhile. The withholding-tax tariffs contain only flat-rate deductions. If you have higher actual costs, you can claim them via a subsequent ordinary assessment on application or a tariff correction:

• contributions to pillar 3a
• buy-ins into the pension fund
• further-training costs
• childcare costs
• debt interest and maintenance payments

The deadline is decisive: the application must reach the cantonal tax administration by 31 March of the following year. Anyone who misses this deadline loses the right for the year concerned.

What you can do now

First check whether your tariff code matches your actual situation — a wrong code (for example A instead of C after a marriage) is the most common error. Then work out how much of your gross salary actually remains after social deductions: the salary calculator shows you the social-security contributions that fall due in addition to the withholding tax. And if you are thinking about a move, a look at the cantonal tax comparison is worthwhile — withholding tax follows the same cantonal differences as ordinary tax.

Note: this guide is for general information. The withholding-tax tariffs and leaflets of your cantonal tax administration, as well as the FTA circular on withholding tax, are authoritative.