1 more question regarding salaries: how common/often is it that company:

- pays 13th salary (so no base split into 13 payments but base plus equivalent of 1-month-salary extra)?

- pays holiday allowance?

I'm referring here to big pharma/fmcg multinationals (think Nestle, Novartis, Roche, etc.)

The reason why I'm asking is that I'm currently based in the Netherlands and it's pretty much standard here to have extra 13th salary in December and holiday allowance in May (8% of yearly base i.e. almost 1 month salary)

What you are talking about is known here as 13th and 14th month. It used to be common, but in the last few years (10) the number of companies having this system has reduced substantially. In any case it is disadvantageous to people paying tax through PAYE as each month is individually calculated thus when you have a large additional payment in one month you move up the tax bracket and lose more than if you simply were paid x% more per year spread evenly.

For large companies such as you mention there is no real way of finding out unless you ask people working for the company. Also note you would need to know what grade you are as some companies will say grades 1-7 receive a 13th salary and those in grades 8-15 don't!

I work at one of the big pharma firms so if you like you can pm me and I can let you know how it works here

Wouldn't be this be paid back to you then in April or so the following year Richard? I know I got some tax back this year from the 2006 year due to bonuses etc pushing up my tax bracket.

No not necessarily. It only will be returned if 1, you stay long enough in Switzerland to be able to claim it... and 2, you fill out a tax return form. Dependent on your salary this might be accepted or not - I know it theoretically must be accepted but theory does not always work in practice

Richard, I'm in need of some more of your wisdom in this regard (or anyone else that can help). I'm teaching a course at a university this term. According to their rules, I won't get paid until the course is complete, which means that I will get an extra 17,000 CHF probably on my February pay-cheque. Is there anything that I can do to avoid being taxed exorbitantly that month, and if I am then how do I claim the extra tax back? I'd rather not wait more than one year to claim it back.

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One colleague on PAYE did get hammered for tax in a higher band one December by being unexpectedly paid out for holidays. I can't see how filling out a tax form would give rise to a refund even if your observation above about salary wasn't a problem (and it might have been).

If you receive a lump sum in one month and are taxed through PAYE there is precious little you can do to avoid the hit in that month and the associated delay (which could be very long) in claiming it back. There are several ways to get around this issue though but none are easy.

1. Marry a Swiss or C permit holder, or a house owner - okay thats not likely...
2. Buy a house.
3. Go the local town hall and ask if you can be taxed like a Swiss person. (Ordentlich besteuert)

So given you get the money in February the only option is 3.

In order to do 3 you need to be aware of the local QStV. This can allow for anyone to apply to be taxed like a Swiss person providing they provide sufficient security. The generally accepted security is an irrevocable promise of payment from a Swiss bank to the level of 30% of your annual salary. But then it depends on the kantonal interpretation of the QStV

Guys - thanks for replies.

Mimi - sent you PM.

Thanks for listing my options. Since none of them seems possible, then I'll look into whether it would be best to try to file a tax return at the end of the year. I found a very useful thread regarding this here: Questions on quellensteuer (tax at source for expats).