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Old 18.12.2012, 21:58
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Tax in Zurich

Hi,

I'm coming to Switzerland for short time work (~4months). My employer is giving me 5400CHF before tax. I am shocked because I expected it to be much higher. I'm wondering how much it would be after tax?
FYI, I'm married with no children.

Thanks in advance.
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  #2  
Old 18.12.2012, 22:36
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Re: Tax in Zurich

I am surprised that you can have an employer and not have tax deducted at source (Quellensteuer).

As your total payments will be about CHF21,600 in a tax year (Jan - Dec), you will pay very little tax, but it is unclear how this will work as you will need to complete a tax declaration...
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Old 18.12.2012, 23:10
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Re: Tax in Zurich

Thanks for your answer. I am not familiar with switzerland's tax system. Is it similar to US? With tax return at the end of year?

Also, how much the tax rate would be? I have seen different numbers from 15 to 40%.

Can I file tax report as a foreigner when I do not reside in Switzerland?
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Old 18.12.2012, 23:18
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Re: Tax in Zurich

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Thanks for your answer. I am not familiar with switzerland's tax system. Is it similar to US? With tax return at the end of year?

Also, how much the tax rate would be? I have seen different numbers from 15 to 40%.

Can I file tax report as a foreigner when I do not reside in Switzerland?
I bet you will have tax deducted from your pay check, but you should check with your employer on that. How much will depend on where you live in Switzerland. You can use this calculator to figure out how much would be taken out each month. http://en.comparis.ch/steuern/quelle...r/default.aspx For example, if you lived in Zurich, you would pay about 210 CHF in taxes per month from your paycheck plus (I would guess) social taxes.

In Switzerland, foreigners making more than 120,000 CHF a year also file a tax return at the end of the year. Since you'll be pretty far under that, I think you will not file a tax return as well. But check with your employer to see how tax will be handled and whether you will need to make social contributions.
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Old 18.12.2012, 23:38
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Re: Tax in Zurich

Oo, one more thing - note that you will be liable for US taxes on this money earned, minus any Swiss taxes paid. Since you won't be out of the US for very long, you won't have any foreign earned income exclusions on the amount earned.
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Old 03.01.2013, 17:53
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Re: Tax in Zurich

Hi Phoenix,

Hope you will have a great time in Zurich. As a foreign citizen, in principle you will be taxed directly on your payroll, which they call "imposition at source". This is typically an average figure in each Kanton. You can have a pretty good idea of what you are going to pay by going onto the Kantonal Finance Department.

For more specific infos use the official Kanton Tax Website: http://www.steueramt.zh.ch/internet/...eitnehmer.html

Should it come up in german, top right hand side is the language button, but they havent translated all available pages.

The figure I could come up with so far was 6.42% for the "Quellensteuer" assuming the 5400. Hope this helps.

Cheers
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Old 05.01.2013, 04:25
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Re: Tax in Zurich

Thanks Blackadder. 6% would be awwwwesome! But I doubt it is true. I have heard something around 15-20%. It's still not clear how it works. Someone told me, they tax you more and you get tax return when you exit Switzerland.
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Old 05.01.2013, 05:42
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Re: Tax in Zurich

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Hi,

I'm coming to Switzerland for short time work (~4months). My employer is giving me 5400CHF before tax. I am shocked because I expected it to be much higher. I'm wondering how much it would be after tax?
FYI, I'm married with no children.

Thanks in advance.
From the little information you give, it looks like your employer will be applying for what is known as a "120 Day Permit", in which case you will remain on your employer's US payroll and as such will not be subject to Swiss income taxes.

However you need to make sure that you have adequate health and accident insurance to cover the period as most travel type insurances will not cover this type of stay.

You should also note that this type of permit will not cover your wife and as such she will be subject to the standard 90 day rule.
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Old 05.01.2013, 08:41
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Re: Tax in Zurich

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Hi,

I'm coming to Switzerland for short time work (~4months). My employer is giving me 5400CHF before tax. I am shocked because I expected it to be much higher. I'm wondering how much it would be after tax?
FYI, I'm married with no children.

Thanks in advance.
If the employer is providing accommodation (worth between 1500 and 4000 CHF per month depending on whether you get a shoebox or a 3 bedroom apartment) and if your occupation is sewing buttons on pyjamas, then it is a good wage.
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Old 05.01.2013, 08:58
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Re: Tax in Zurich

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Oo, one more thing - note that you will be liable for US taxes on this money earned, minus any Swiss taxes paid. Since you won't be out of the US for very long, you won't have any foreign earned income exclusions on the amount earned.
This is important. The Swiss tax may be peanuts but when you file your US tax return and include the Swiss earned salary you will have a BIG US tax liability.

If as someone else suggested you stay on the US payroll you will just pay taxes as you do now and while you will earn less now at least you won't have a nasty surprise at the end of the year.

If you are not earning more CHF than you would normally USD, depending on who is paying accommodation, then you are getting duped. But it`s only 4 months so hopefully it`s a good opportunity for you.
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Old 05.01.2013, 09:01
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Re: Tax in Zurich

@FriendlyKiwi

Neither accommodation nor insurance

I'm getting my PhD in Computer Science from a top-tier school in US. This internship would be in the middle of my PhD. How does it sound now?
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Old 05.01.2013, 09:06
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Re: Tax in Zurich

@BrianJW, @Jim2007.

I'm not American. I'm a student here. I don't think that I need to include my salary in Switzerland in my 2013 US tax report since this has nothing to do with US. Am I correct?
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Old 05.01.2013, 09:38
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Re: Tax in Zurich

Phoenix, US tax applies to 'US Persons' not only US citizens. Citizen or not, if you are a 'US person' as defined by the IRS then your Swiss salary - or any money earned anywhere in the world - must be included in your 2013 US tax filing.

Did you have a green card? If so, you'd need to take steps to formally abandon it in order to avoid Uncle Sam's ever-widening tax net.

If you don't have a green card, and if you are not considered a US Person under the IRS definition and have cut all ties with the US, that's a different matter.
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Old 05.01.2013, 09:47
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Re: Tax in Zurich

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@FriendlyKiwi

Neither accommodation nor insurance

I'm getting my PhD in Computer Science from a top-tier school in US. This internship would be in the middle of my PhD. How does it sound now?
Ah, that makes a big difference. I was starting to think you were a corporate executive, and might have been expressing your income in kCHF.

Your best bet: ring the HR manager at the location you will be working / studying and ask them for all the advice. They will have dealt with your situation many times in the past and will know the definite rules.
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Old 05.01.2013, 10:28
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Re: Tax in Zurich

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@BrianJW, @Jim2007.

I'm not American. I'm a student here. I don't think that I need to include my salary in Switzerland in my 2013 US tax report since this has nothing to do with US. Am I correct?
Unlikely you state you are only here for 4 months so the US revenue will want to know about it as they want to put their nose into any business of americans. If you have a tax number in the US and have previously submitted then 4 months here will not even qualify you for swiss resident tax but you will still need to state it in the US I expect.

Also 5400CHF is damn good for a student cant understand why you would be disappointed at that amount when you are only a student
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Old 05.01.2013, 10:42
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Re: Tax in Zurich

@Jim2007, same company pays ~8K USD/month if I stay here. They are even paying less relocation however it would be an international relocation. They didn't negotiate anything and told me my pay is competitive with other companies there.

Anyways, I kind of accepted the offer and I'm preparing my documents for my visa application. Hope I get my visa in time.
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Old 05.01.2013, 11:15
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Re: Tax in Zurich

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@Jim2007, same company pays ~8K USD/month if I stay here. They are even paying less relocation however it would be an international relocation. They didn't negotiate anything and told me my pay is competitive with other companies there.
.
You've hit upon another of the myths of Switzerland. While it is true that in many sectors, especially for jobs that in other countries would be the lower paid end, Swiss wages tend to be higher. However in some sectors/levels - finance especially - Swiss salaries are often lower than what the same job (even when COLA'ed) would command in NY or London.

It's the 'mountains and clean air' bonus. For these positions companies can afford to pay less than what would be competitive in NY and London without fear of losing key staff, because there are enough people who want to live here and are willing to take a pay cut to do so.

As you said, it's international experience that may open doors in the future.

Last edited by meloncollie; 05.01.2013 at 11:27.
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Old 05.01.2013, 16:02
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Re: Tax in Zurich

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However in some sectors/levels - finance especially - Swiss salaries are often lower than what the same job (even when COLA'ed) would command in NY or London.
It's the 'mountains and clean air' bonus. For these positions companies can afford to pay less than what would be competitive in NY and London without fear of losing key staff, because there are enough people who want to live here and are willing to take a pay cut to do so.
I am getting confused. Why would that apply to Finance jobs specifically ? Are Finance folks more avid skiers/hikers than other professions ?
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Old 05.01.2013, 17:26
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Re: Tax in Zurich

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I am getting confused. Why would that apply to Finance jobs specifically ? Are Finance folks more avid skiers/hikers than other professions ?
Well, that's one sector - or more accurately, a small slice thereof - with which I'm familiar.
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