Hi All -

I came across this Swiss goverment study today, and it confirmed my suspicions that the higher salaries and low tax in Switzerland is not enough to compensate for the extremely high cost of living.

http://www.bfs.admin.ch/bfs/portal/e...terloehne.html

As an example, one would be better off in Germany by 7,000euros.

Comments?

Badener.

the figures you quoted are gross wages. not disposible income. when you factor in lower taxes in switzerland, you might get a different picture.

If gross income still results in less disposable income, wouldn't it be logical that net income also results in less disposable income?

No, it would not when in some countries 50% or even more will be taken of your gross income, whilst in CH only 15%-25%.

It gives a purchasing power figure as well though

Another important factor, which many people probably never thought of is, that the income averages are bumped up by high earners (such as expats, Phil Collins etc. and other random people who only "reside" here because of the tax advantage). I'd like to see a study conducted with more realistic figures where they just take into account the average joe that has to survive on a more economical salary.

This figure here is actually a median value rather than a traditional average. So the 'few high earners' effect is negated to an extent.

The 46k Euros figure seems a bit low when converted to Swiss francs today. But this is from 2007 when the EURO to CHF rate was very different.

Euro to CHF is 1.2 nowadays but back then was about 1.65

It's wage levels, Phil Collins etc on a tax deal can't work here so he is not included. In any case the tax they pay is based on 5 times their rent, nothing to do with income.

The data is based on 2006, the CHF is far stronger V the Euro and nearly double to the £ ! so it has verzy little relevance today-

Ah yes, didn't see the "mean" at the bottom.

Regardless of whether he works here, he's still paying taxes.

Investment income is not included, it's wages from a job, not taxable income, very different numbers for some people. Even if PC was included it's median earnings not average.

Depends on your situation. For example, in Germany a single person will indeed pay about 45% But a married person with a non-working wife pays significantly less. For a start you are only taxed on half your income (which considers you non-working wife).

Here as well!

Tom

I wouldn't calla 5% reduction significant, but go on.

But the report doesn't compare the % of Swiss income to % of foreign income. It compares % of Swiss disposable income to % of foreign disposable income.

So, if non-Swiss have more disposable income, and more deductions than Swiss, then...

More like 35%, not 5%, at least for me.

Tom

I earn about that average and pay 2.9% tax per month because my wife is not working.

Go on

My reply was not clear, I mean in absolute terms:

In ZH tax is about 12% for a single person, for a married person with one child about 7%. That's not much of a reduction at all in my opinion, when expressed in kCHF.

What do the "average gross annual wages of full-time employees" (at ppp) have to do with "disposable income"?


Please enlighten me?!

Well you see, in the link I posted they present the Average gross annual wages of full-time employees expressed in terms of purchasing-power standards (which eliminates the impact of differing national price levels
- to use their definition).

So with those figures you have to subtract income tax, social insurances and health insure, to end up with you net annual wages in terms of purchasing power.

The point is that Switzerland is so much lower then the figures for Germany and Luxemburg, that I wondered if lower tax really compensate the difference -a quick calculation I made using Lohnsteuer calculators showed that it does not.

Switzerland is far below the equivalent figures presented for Germany and Luxemburg for example.

That is actually not the correct way to do this calculation:

You'd calculate the disposable income first, then correct for ppp. It does not really make sense to correct for price levels when it comes to paying taxes.