Updated : 12/2012
Salaries and wages are any amounts earned by an individual for work performed in a dependent position (employment), including ancillary income related to employment such as compensation for special services, commissions, bonuses and other similar payments.
Benefits in kind are subject to income tax at their market value or at a value fixed by the tax authorities.
Costs directly related to employment income are deductible. This includes commuting costs, costs for further education and subsistence costs. Certain personal deductions, e.g. for a child, for education of children, medical expenses, are granted in proportion to the foreign wealth/income. A standard deduction of CHF 1,500 for extraordinary professional expenses is granted.
Employment income is subject to social security contributions to old age, survivors’ and disability insurance, the family compensation fund, compulsory health insurance as well as unemployment insurance. The contributions are shared between the employer and the employee. The rate of the employee contributions is 5.05 % of the gross salary. Furthermore, each employee has to pay contributions to accident insurance and the occupational old age scheme.
Taxable income of a person subject to unlimited tax liability is subject to tax at a progressive rate (8-bracket schedule). The marginal rates, including the municipal surcharge, range from 3.5 % (for income exceeding the tax free allowance) to 28 %.
The schedules and tax free allowances differ for single taxpayers, single parents and jointly assessed married couples.
In case of limited tax liability a wage tax is levied (between 4 % to 19 %), unless there is a regular assessment (see below). In case of a regular assessment the same tax rate applies as for taxpayers subject to unlimited tax liability.
Your employer deducts the amount of tax due from your salary on a monthly basis (wage tax withholding) and remits this amount to the Fiscal Authority on your behalf.
Taxpayers subject to unlimited tax liability receive a tax return form and are requested to file it usually by the middle of April of the calendar year following the respective tax year. The wealth and income of husband and wife are aggregated for tax purposes. However, married couples may, upon joint application, be assessed separately.
In the assessment, the Fiscal Authority specifies the tax assessment basis, the tax rate and the amount of tax due. The tax due is reduced by wage tax withheld and remitted by the employer. The balance is payable within 30 days from receipt of the assessment. If the taxpayer leaves the country, the tax must be paid at the latest on the date of relocation.
Taxpayers subject to limited tax liability with income exceeding CHF 150,000 have to file tax returns and are regularly assessed by the Fiscal Authority. For taxpayers subject to limited tax liability with income of CHF 150,000 or less the personal income tax is generally covered by the wage tax withheld and remitted by the employer. However, upon application such taxpayers can opt for a regular assessment; in this case the taxpayers have to file a tax return.
If you disagree with your tax assessment, you can file a written appeal to the Fiscal Authority within 30 days from receipt of the assessment. If you disagree with the objection decision of the Fiscal Authority you may subsequently appeal to the National Tax Commission within 30 days of service of the objection decision. A decision of the National Tax Commission can be appealed to the Administrative Court within 30 days of service.