How a Swiss payslip works
A Swiss payslip (Lohnabrechnung) always carries the social contributions, which are federal and the same in every canton: old-age, survivors' and disability insurance with income compensation (AHV/IV/EO), unemployment insurance (ALV) up to an annual ceiling, the employee's share of the occupational pension (BVG, the second pillar) and non-occupational accident insurance (NBU). Whether it also carries income tax depends on who you are.
Swiss citizens and foreigners with a settlement permit (C) are not taxed through the payslip at all. They file a tax return each year and pay federal, cantonal and municipal income tax directly, in instalments. Foreign employees without a settlement permit, which usually means a residence permit B or a short-term permit L, are taxed at source (Quellensteuer): the employer takes the tax off every payslip at a rate from the canton's official tariff. The same holds for their spouse, unless one of the two is Swiss or has a settlement permit, in which case neither is taxed at source.
The calculator shows the payslip of someone taxed at source by default, because that is the situation of most people moving to Switzerland for a job. Untick the option to see the payslip of a Swiss citizen or C permit holder, which has no income tax line; their tax still has to be paid, just not by the employer.
The withholding tax tariff
The tax at source is a single rate applied to the whole of a month's gross pay. The rate is read from the canton's tariff, which the federal tax administration (ESTV) publishes for every canton and every tariff code, and it already includes federal, cantonal, municipal and, where it applies, church tax. The tariff code is a letter for your family situation, a number for your children and a mark for church membership:
- A: single, divorced, separated or widowed and not living with children;
- B: married, and your spouse has no income from work;
- C: married, and both of you earn;
- H: single and living with children you mainly support.
Zurich applies the tariff month by month: each month's pay picks its own rate. Because the rate applies to the whole month's pay and rises in small steps as pay rises, a raise that just crosses a step can leave you slightly worse off in that month. Near a few wider steps the effect is larger, and the result warns you when your salary is close to one.
The rates for Zurich are the same in every municipality of the canton: the tariff builds in an average of the municipal tax rates, so the city of Zurich and Winterthur withhold alike. Other cantons publish their own tariffs, and some of them, Geneva and Vaud among them, apply the rate to the year's pay rather than month by month.
When the tax at source is not the final word
If your gross pay reaches the federal threshold for a subsequent ordinary assessment, you have to file a tax return after the year ends, and the tax withheld counts only as an advance on the tax assessed then. Below the threshold you can ask for an ordinary assessment yourself, by the end of March of the following year, to claim deductions the tariff does not know about, such as payments into a pillar 3a account, high commuting costs or childcare. If you do not ask, the tax withheld is final.
Social contributions
AHV/IV/EO is a fixed percentage of all your pay with no ceiling, matched by the employer. Unemployment insurance is charged, and matched, only up to an annual ceiling. The occupational pension is shown at the legal minimum: an age credit on the part of your salary between the coordination deduction and an upper limit, rising with age from 25, and split equally with the employer. Most employers' pension plans insure more of the salary or at higher rates, so your real pension deduction is often larger. Non-occupational accident insurance is paid by the employee at a rate set by the employer's insurer; the field is filled with the rate the federal tax administration uses when it builds the tariffs, and you can type your own from your payslip.
Health insurance is not a payroll item. Every resident buys a basic policy from a health insurer and pays the premium out of net pay, so it still has to come out of the figure shown here, and so does any daily sickness insurance the employer passes on.
What the employer pays on top
The employer section shows the employer's share of AHV/IV/EO, unemployment insurance and the pension's legal minimum, the canton's family allowance fund at the cantonal fund's rate and Zurich's vocational training fund. Employers affiliated with a professional family allowance fund pay that fund's rate instead. The section leaves out the occupational accident premium, which depends on the activity, and the compensation fund's administration costs.
What this calculator assumes
The result models an employee who is paid in twelve equal monthly instalments and works the whole year in the canton of Zurich. It does not cover:
- A thirteenth month's salary or a bonus. Paid in a single month, either raises that month's pay and with it the rate the tariff applies.
- Cross-border commuters, who have their own tariff codes, and more than three children.
- Pension plans above the legal minimum, voluntary pension purchases, pillar 3a payments and daily sickness insurance.
- The ordinary income tax of Swiss citizens and C permit holders, which depends on the municipality, deductions and wealth, and is assessed once a year.