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Old 02.10.2014, 00:20
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Income tax question

Hi

I've read through the forum and lots of useful info exists but there's one difference I can't account for.

Trying to calculate the net monthly salary of 110k/annum, these 3 websites yield very different results:

The official tax website: http://www.estv2.admin.ch/e/dienstle...er/2013/zg.htm



Is the total tax burden the final amount of tax or the total deductions? It's very badly written. It looks like the total amount is 10628.



Another website - http://en.comparis.ch/steuern/quelle...lensteuer.aspx - has 8029 this time as total tax:



And finally this one has even more:

http://www.lohncomputer.ch



That's around 23,000!


Which one should I believe? I've set single person, no church tax, living in Zug as the criteria for all of them but results fluctuate greatly.

At a loss...
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Old 02.10.2014, 02:10
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Re: Income tax question

Indeed these are all different.
1. This is a pure tax calculator. CHF 10628 is the total amount of federal, cantonal, community and church tax you pay. You have to pay lots of other things in addition to tax eg. Unemployment Insurance. However, Unemployment Insurance is tax deductable, hence it appears in the list.

2. Tax at source (Quellensteuer) is usually more advantageous but you don't get tax relief on your company pension fund contributions etc. (which you omitted in the Tax Calculator but you have to pay anyway).

3. Appears to be an attempt to calculate Take Home Pay. So things like Unemployment Insurance etc. , which your employer deducts from your salary, are accounted for.
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Old 02.10.2014, 02:49
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Re: Income tax question

I see so the third figure is the most accurate one then? That's still around 20% so not so bad for a comparatively high salary (to the median country salary, for EF it's a disgrace I know )
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Old 02.10.2014, 13:01
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Re: Income tax question

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I see so the third figure is the most accurate one then? That's still around 20% so not so bad for a comparatively high salary (to the median country salary, for EF it's a disgrace I know )
At 28 years old and single, you'll certainly scrape by on a gross salary of CHF 110K pa . Just don't order the Ferrari yet.
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Old 02.10.2014, 13:08
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Re: Income tax question

Haha yeah exactly what I mean, not very different than getting 50k in the UK I guess. Better off than most but doesn't mean much are saved every month or that you're rich.

Thanks again for reply!
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Old 10.08.2015, 13:55
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Re: Income tax question

Hi All,

Picking up on this old thread, how would it work under the light of the below information:

1). Annual gross salary is 150 K CHF given in 13 installments.
2). Plus there is an additional bonus of 15 %, which amounts to 22500 CHF
3). And last but not the least that the person starts on 1st September. Clearly enough he'd not earn the whole 150k CHF but only the salary for 4 months amounting roughly to a 46153 CHF + the 13th month salary (pro-rata basis ?) + the annual bonus ( 15% of the actual earnings or the whole expected salary).

While using any of these online tax calculators do i need to add the bonus payout in the gross salary? If yes then how would it then be separated to calculate the net take home and if no then how would it be taxed?

Many thanks in advance for your response !

PS : The tax deduction is at source.
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Old 10.08.2015, 14:06
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Re: Income tax question

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Hi All,

Picking up on this old thread, how would it work under the light of the below information:

1). Annual gross salary is 150 K CHF given in 13 installments.
2). Plus there is an additional bonus of 15 %, which amounts to 22500 CHF
3). And last but not the least that the person starts on 1st September. Clearly enough he'd not earn the whole 150k CHF but only the salary for 4 months amounting roughly to a 46153 CHF + the 13th month salary (pro-rata basis ?) + the annual bonus ( 15% of the actual earnings or the whole expected salary).

While using any of these online tax calculators do i need to add the bonus payout in the gross salary? If yes then how would it then be separated to calculate the net take home and if no then how would it be taxed?

Many thanks in advance for your response !

PS : The tax deduction is at source.
1) You will pay income taxes on the income received in 2015. If the bonus for 2015 is paid in 2016, it will be included in income for 2016 and subject to income tax for that year.
2) Generally, the income tax rate will be on the annualized amount that you would have received if you had worked from January to December.
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Old 10.08.2015, 14:40
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Re: Income tax question

Thanks Mullhollander for your response however with all due respect what you mentioned seems contradictory in nature:
specifically the below two parts:

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1) You will pay income taxes on the income received in 2015.
2) Generally, the income tax rate will be on the annualized amount that you would have received if you had worked from January to December.
Also isn't it a bit unfair to tax me according to the income that I'd not receive in the financial year in question? But if it's a law then that's how it is and I understand.

Excuse me for being so specific about it but I'm just trying to get as much clarity as I could :

1). My monthly gross salary should be 150k divided by 13 which equals to 11538 CHF right? This gives a net of 7630 CHF as per the calculator, it's roughly a 34% of deduction. Health insurance added (assuming 500 CHF) it roughly equals to the German tax rates, someone said about taxes being on a lower side in Switzerland
2). The 13th salary paid in Dec would be 4/13 or 4/12 of 11538 and then tax deductions would be done separately on this ?
3). The bonus payout (assuming its given on 25th Dec) would it be 15 % of the estimated annual earnings or 15 % of the actual earnings in FY. Is it something that depends on the company policy about bonus?

Thanks once again for your help and time, much appreciated !
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Old 10.08.2015, 14:48
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Re: Income tax question

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Thanks Mullhollander for your response however with all due respect what you mentioned seems contradictory in nature:
specifically the below two parts:



Also isn't it a bit unfair to tax me according to the income that I'd not receive in the financial year in question? But if it's a law then that's how it is and I understand.

Excuse me for being so specific about it but I'm just trying to get as much clarity as I could :

1). My monthly gross salary should be 150k divided by 13 which equals to 11538 CHF right? This gives a net of 7630 CHF as per the calculator, it's roughly a 34% of deduction. Health insurance added (assuming 500 CHF) it roughly equals to the German tax rates, someone said about taxes being on a lower side in Switzerland
2). The 13th salary paid in Dec would be 4/13 or 4/12 of 11538 and then tax deductions would be done separately on this ?
3). The bonus payout (assuming its given on 25th Dec) would it be 15 % of the estimated annual earnings or 15 % of the actual earnings in FY. Is it something that depends on the company policy about bonus?

Thanks once again for your help and time, much appreciated !
Nothing contradictory about that. You will pay taxes on the approx. four months of income actually received in 2015 at the tax rate as though you had worked the full 12 months in 2015.

Fictitious example to illustrate the concept:
Sep to Dec 2015 income: CHF 50'000 (income received)
Normal tax rate for annual income of CHF 50'000: 10%
However, since your annualized income is CHF 150'000, the rate applied would be 15%.
Actual taxes due: CHF 50'000 x 15% = CHF 7'500

Last edited by Mullhollander; 10.08.2015 at 15:05. Reason: Added example
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Old 10.08.2015, 15:26
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Re: Income tax question

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Fictitious example to illustrate the concept:
Sep to Dec 2015 income: CHF 50'000 (income received)
Normal tax rate for annual income of CHF 50'000: 10%
However, since your annualized income is CHF 150'000, the rate applied would be 15%.
Actual taxes due: CHF 50'000 x 15% = CHF 7'500
Thanks once again, it's crystal clear now. So to summarize irrespective of what I actually earn the tax rate would be determined on the basis of what the projected annual income is.

Although I'm still awaiting answers specific to the questions quoted below:
Quote:
1). My monthly gross salary should be 150k divided by 13 which equals to 11538 CHF right? This gives a net of 7630 CHF as per the calculator, it's roughly a 34% of deduction. Health insurance added (assuming 500 CHF) it roughly equals to the German tax rates, someone said about taxes being on a lower side in Switzerland am I missing something here?
2). The 13th salary paid in Dec would be 4/13 or 4/12 of 11538 and then tax deduction would be done separately on this ?
3). The bonus payout (assuming its given on 25th Dec) would it be 15 % of the estimated annual earnings or 15 % of the actual earnings in FY. Is it something that depends on the company policy about bonus?
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Old 10.08.2015, 15:50
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Re: Income tax question

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Thanks once again, it's crystal clear now. So to summarize irrespective of what I actually earn the tax rate would be determined on the basis of what the projected annual income is.

Although I'm still awaiting answers specific to the questions quoted below:

If you were to receive the 13th salary and 15% bonus in December, you gross income would be:
Monthly salary = 150K / 13 = 11'538.50
Pro-rata 13th salary for 4 months = 150K / 13 / 12 * 4 = 3'846.20
Pro-rata bonus for 4 months = 150K * 15% / 12 * 4 = 7'500.00
Total = 22'884.70

That would also be the amount that would be used to determine the withholding tax rate. So in such month the amount of withholding tax would be rather high.

Where I work, bonus for 2015 will be paid in Q1 of 2016. The policy of course varies from company to company.
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Old 10.08.2015, 15:58
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Re: Income tax question

A few more comments -

- in the calculator that you used, one of the deductions is the Pension Fund (second to last item) - this is a mandatory deduction but the amount depends on your employer's pension fund and some choices that you can make. It could be more or less in the end. It is the second pillar of the pension system here and all the money that you accumulate there plus your employer's contributions (which are the same as yours or more) and returns on the investment of the fund is yours [-tax at that point of time] when you retire (or in case you move outside EU/EFTA). It is an individual account.
- the overall deductions are not so low and depend on canton/commune
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Old 10.08.2015, 16:10
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Re: Income tax question

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Indeed these are all different.


2. Tax at source (Quellensteuer) is usually more advantageous but you don't get tax relief on your company pension fund contributions etc. (which you omitted in the Tax Calculator but you have to pay anyway).
True Just thought I would mention the below since not everyone is aware..

You can still claim back Pillar 3a pension payments and also commuting costs, Charity donations, and several other things.

Here are the forms for Basel.
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