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-   -   Marriage and Taxation - Please Help! (https://www.englishforum.ch/finance-banking-taxation/180752-marriage-taxation-please-help.html)

arwana 26.06.2013 02:33

Marriage and Taxation - Please Help!
 
Hello

My husband and I arrived in Zurich on March and he started working when we got here. I'm now looking for a job, but I heard the taxation is insane being a married couple.
He's getting around CHF80000 per year. This month I worked on a project for one week and all of a sudden the taxation just increased to double!!! So from the CHF 2000 I earned, lefts now CHF800!!!! Which means I kind of worked for free!

How do I know what we are going to pay when I start a full-time job?
And if we get a divorce?? For me this is just ridiculous! I came from a country where the government is taking all people's dignity increasing taxes and now this.
I'm currently living in Adliswil. Is there a place when I can go and get information about this matter?
Thank you.

slingb 26.06.2013 07:19

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by arwana (Post 1913182)
Hello

My husband and I arrived in Zurich on March and he started working when we got here. I'm now looking for a job, but I heard the taxation is insane being a married couple.
He's getting around CHF80000 per year. This month I worked on a project for one week and all of a sudden the taxation just increased to double!!! So from the CHF 2000 I earned, lefts now CHF800!!!! Which means I kind of worked for free!

How do I know what we are going to pay when I start a full-time job?
And if we get a divorce?? For me this is just ridiculous! I came from a country where the government is taking all people's dignity increasing taxes and now this.
I'm currently living in Adliswil. Is there a place when I can go and get information about this matter?
Thank you.

You will find that your net pay went from 2000->800, but at the same time your husbands net pay also went UP by more than that difference. So I suspect you are actually slightly better off, taken together as a couple.

The idea with the at source rates, at least in VD was that, once married, only one of them (usually the one with the higher salary) gets all the allowances that each was getting separately up to then (increased a small bit as a bonus for being married), and the other is taxed from the first franc.

In Switzerland taxation is a household issue, not an individual issue. You need to add your earnings and taxes with those of your husbands to compare, and I think if you do that you will see you are either at the same position of slightly better off.

PlantHead 26.06.2013 09:55

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by slingb (Post 1913203)
You will find that your net pay went from 2000->800, but at the same time your husbands net pay also went UP by more than that difference. So I suspect you are actually slightly better off, taken together as a couple.

The idea with the at source rates, at least in VD was that, once married, only one of them (usually the one with the higher salary) gets all the allowances that each was getting separately up to then (increased a small bit as a bonus for being married), and the other is taxed from the first franc.

In Switzerland taxation is a household issue, not an individual issue. You need to add your earnings and taxes with those of your husbands to compare, and I think if you do that you will see you are either at the same position of slightly better off.

My experience in Kanton Zürich is the opposite.

Pre-marriage both earning 100k - taxed at 15%.
So in total we both paid around 30k a year in tax.

When we got married they took our joint earning as 200k and charged 45% tax (higher earnings higher tax bracket) So now our tax bill is 45k a year, or an increase/penalty of 15k for getting married.

paizuri 26.06.2013 10:05

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by PlantHead (Post 1913304)
My experience in Kanton Zürich is the opposite.

Pre-marriage both earning 100k - taxed at 15%.
So in total we both paid around 30k a year in tax.

When we got married they took our joint earning as 200k and charged 45% tax (higher earnings higher tax bracket) So now our tax bill is 45k a year, or an increase/penalty of 15k for getting married.

Yes, but 200K vs 104K is quite different. Tax rates are progressive.

dodgyken 26.06.2013 10:05

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by PlantHead (Post 1913304)
My experience in Kanton Zürich is the opposite.

Pre-marriage both earning 100k - taxed at 15%.
So in total we both paid around 30k a year in tax.

When we got married they took our joint earning as 200k and charged 45% tax (higher earnings higher tax bracket) So now our tax bill is 45k a year, or an increase/penalty of 15k for getting married.

^^^^Maths fail!!!

200k * 45% = 90k.

You mean 200k*22.5% = 45k

You will need to ensure you contact your HR to update their records to show you are married. This will effect the rate and boundaries.

Check the ZH Steuramt for details of the rates and boundaries

EDIT:
Married
200k gross is approx 170k net
8,700chf Bundes tax
24,000chf Gemeinde and kantonal tax
33,400chf TOTAL

Single
100k gross is approx 90k net (lower deductions)
2,300chf Bundes tax
5,400chf Gemeinde and kantonal tax
7,700chf TOTAL * 2 = 15,400chf

NotAllThere 26.06.2013 10:10

Re: Marriage and Taxation - Please Help!
 
Strange. I put those numbers into Comparis.ch, and there was a saving of 3'000CHF each.

5thSwiss 26.06.2013 11:03

Re: Marriage and Taxation - Please Help!
 
Something doesn't make sense here. Progressive taxation doesn't increase the tax on the first franc, except (in particular with wealth tax) when some assets and income are exempt in Switzerland because located abroad.

There are numerous Web sites that allow you to work out your hypothetical tax, including on Cantonal and bank web sites http://ge.ch/impots/calcul-et-paiement-des-impots

While I am not tax-resident in Switzerland now (it works out cheaper for me to elect to be tax resident in the UK and I can do that because I am retired and dual resident) I found that I save considerable tax by filing complete declarations with Swiss canton(s) and HMRC. HMRC doesn't give total tax credit (it claims to follow the Treaty and that I should get a refund from the Swiss, but I can't because it's a voluntary return). On the other hand I pay a lot less because I can deduct mortgage and expenses not otherwise deductible.

Temporary employed residents subject to tax only by way of withholding may have other options too, as I did. I just asked for a meeting with the tax office and they explained. Or I could have hired a tax accountant but I didn't because I did this stuff for a living.

sam ali 26.06.2013 11:06

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by PlantHead (Post 1913304)
My experience in Kanton Zürich is the opposite.

Pre-marriage both earning 100k - taxed at 15%.
So in total we both paid around 30k a year in tax.

When we got married they took our joint earning as 200k and charged 45% tax (higher earnings higher tax bracket) So now our tax bill is 45k a year, or an increase/penalty of 15k for getting married.


I do find this totally crazy. Should it not be the other way round? Penalizing people who wish to be maried and stay together.

krlock3 26.06.2013 11:23

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by PlantHead (Post 1913304)
My experience in Kanton Zürich is the opposite.

Pre-marriage both earning 100k - taxed at 15%.
So in total we both paid around 30k a year in tax.

When we got married they took our joint earning as 200k and charged 45% tax (higher earnings higher tax bracket) So now our tax bill is 45k a year, or an increase/penalty of 15k for getting married.

Using this link:

http://www.estv2.admin.ch/e/dienstle...er/2012/zh.htm

First with one earner of 100K and assuming no church affiliation and you put the max chf 6682 in your 3a account: Total tax burden 11,669

Now, married with second earner 100k, and both putting chf 6682 in:Total tax burden 26,888

According to this at least, your tax burden together does increase but only by CHF 26888 - (2 * 11669) = 3550.

Where's the discrepancy?

fatmanfilms 26.06.2013 12:10

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by krlock3 (Post 1913399)
Using this link:

http://www.estv2.admin.ch/e/dienstle...er/2012/zh.htm

First with one earner of 100K and assuming no church affiliation and you put the max chf 6682 in your 3a account: Total tax burden 11,669

Now, married with second earner 100k, and both putting chf 6682 in:Total tax burden 26,888

According to this at least, your tax burden together does increase but only by CHF 26888 - (2 * 11669) = 3550.

Where's the discrepancy?

Of course the secret is to live a long way from work, drive & claim 70 cents a km :D

krlock3 26.06.2013 12:17

Re: Marriage and Taxation - Please Help!
 
Could it partially be that you got married mid year and they lumped more than one years tax change into your next bill to account for that?

Maybe it will even out over time?

tom tulpe 26.06.2013 13:36

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by sam ali (Post 1913384)
I do find this totally crazy. Should it not be the other way round? Penalizing people who wish to be maried and stay together.

That's everywhere else, but not Switzerland. Google "Heiratsstrafe" ("marriage penalty"). Yes, if both spouses earn, they are taxed more than if they were both unmarried.

And in canton Zurich, to add insult to injury, if you're taxed at source, the higher tax is always applied to the wife's income, and any reductions for children are alway applied to the husband's income, irrespective of who actually earns more - see page 6 onwards here.

3Wishes 26.06.2013 13:55

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by krlock3 (Post 1913456)
Could it partially be that you got married mid year and they lumped more than one years tax change into your next bill to account for that?

Maybe it will even out over time?

That's what happened to us. When we first got married (halfway through the year) they adjusted our next bill as if we were both earning the same amount. Translation: Massive increase in tax bill!:eek: However after the year was over and we filed corrections, they re-adjusted downward.

NotAllThere 26.06.2013 14:37

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by tom tulpe (Post 1913527)
...in canton Zurich, to add insult to injury, if you're taxed at source, the higher tax is always applied to the wife's income, and any reductions for children are alway applied to the husband's income, irrespective of who actually earns more...

That only applies to quellensteuer though, doesn't it? Mine and my wife's income is added together (we're on C permits), and we get one bill per tax demanding entity.

BaselPT 26.06.2013 15:59

Re: Marriage and Taxation - Please Help!
 
Hey arwana.

As far as I understand, while you are unemployed / earning only a little, the net effect from being taxed as a married couple is beneficial for the couple (and can be a significant effect - try on some online tax calculators).

However, if both spouses are working and earning about the same amount, the effect is not beneficial for the couple.

You can try different amounts on the online calculators to check what happens: you can do 3 calculations and compare.
Calculate first a single person earning what your spouse earns, then a single person earning what you earn. Add these together after tax.

Compare that to calculating the couple with the sum of the earnings.

You can redo the whole calculation raising your amount from 0 to 2000 and see if it matches what you saw happening this time, and going up all the way until you are earning a full time salary like your husband.

PlantHead 26.06.2013 16:04

Re: Marriage and Taxation - Please Help!
 
My figures were just an illustration and not meant to be taken as fact. - although I should have checked my percentages.

The real issue for our tax was the federal tax amount which increased dramatically, the Gemeinde and Kantonal taxes didn't change that much.

When you get married you should check with your Gemeinde and get them to readjust your taxes, otherwise in 3 years when you get your tax form back you could be in for a nasty shock.

Comparis.ch


Taxable income (per year) CHF 100,000
Taxable income CHF 0
Civil status single
Denomination none
Number of children (under 18 years) 0
Number of children (19 to 25 years) 0
Double earner no



Taxes per year
16,882


Taxable income (per year) CHF 200,000
Taxable income CHF 0
Civil status married
Denomination none
Number of children (under 18 years) 0
Number of children (19 to 25 years) 0
Double earner yes


Taxes per year
42,583


That is an increase of 8819 chf a year just for getting married.

dodgyken 26.06.2013 16:44

Re: Marriage and Taxation - Please Help!
 
^^^ but the above is not a fair representation of the situation.

100k taxable income is on a gross of say 110k
200k taxable income for a married couple is on a gross of 240k

There are greater deductions for a married couple - I would have to go through a tax return to check.

Remember though - if/when reduced to a single income then you are far better off as a married couple.

tom tulpe 26.06.2013 17:23

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by NotAllThere (Post 1913597)
That only applies to quellensteuer though, doesn't it? Mine and my wife's income is added together (we're on C permits), and we get one bill per tax demanding entity.

Yes. Hence "if you're taxed at source" :msnwink:

PlantHead 26.06.2013 17:28

Re: Marriage and Taxation - Please Help!
 
Quote:

Originally Posted by dodgyken (Post 1913744)
^^^ but the above is not a fair representation of the situation.

100k taxable income is on a gross of say 110k
200k taxable income for a married couple is on a gross of 240k

There are greater deductions for a married couple - I would have to go through a tax return to check.

Remember though - if/when reduced to a single income then you are far better off as a married couple.

Taxable income is gross income.

krlock3 03.03.2014 11:21

Re: Marriage and Taxation - Please Help!
 
So lets say I was to get married mid year this year. What actually happens in terms of our tax situation, assuming we fill out our own tax forms rather than quellensteuer?

In other words, when in early 2015 we fill out our tax returns for 2014. Do we actually then just fill out one together?

Are we hit for some greater than normal amount than evens out over the next years, as seems to be indicated here?


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