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Old 19.05.2020, 18:51
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120k and tax at source / quellensteuer

I'm rather confused as to how tax at source works for permit B holders.
Up to 120k income it's clear, everything is taxed at source, above 120k what happens?

Is it the case that ( salary - 120k ) is untaxed at source and it's taxed later?

Is it the case that ( salary - 120k ) is still taxed at source but it's also taxed later?
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Old 19.05.2020, 18:53
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Re: 120k and tax at source / quellensteuer

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I'm rather confused as to how tax at source works for permit B holders.
Up to 120k income it's clear, everything is taxed at source, above 120k what happens?

Is it the case that ( salary - 120k ) is untaxed at source and it's taxed later?

Is it the case that ( salary - 120k ) is still taxed at source but it's also taxed later?
Your employer still will deduct the taxes from your salary, regardless of the amount.
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Old 19.05.2020, 18:56
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Re: 120k and tax at source / quellensteuer

You would pay tax at source as prepayment on the full income, you have to do a regular tax declaration, and you will be taxed at the normal rate. If you paid too much you will get it back, if not you will get a bill. Can take months to years till you get the final amount is known.
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Old 19.05.2020, 19:00
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Re: 120k and tax at source / quellensteuer

If you are not swiss and don't have C permit, you will continue to pay tax at source regardless of amount received. Normally tax at source is set at cantonal average tax.

If you earn more than 120k then you are asked to do tax declaration, now if calculated tax is more than tax deducted at source then you need to pay difference otherwise you will receive the difference back.

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I'm rather confused as to how tax at source works for permit B holders.
Up to 120k income it's clear, everything is taxed at source, above 120k what happens?

Is it the case that ( salary - 120k ) is untaxed at source and it's taxed later?

Is it the case that ( salary - 120k ) is still taxed at source but it's also taxed later?
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Old 19.05.2020, 19:58
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Re: 120k and tax at source / quellensteuer

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If you are not swiss and don't have C permit, you will continue to pay tax at source regardless of amount received. Normally tax at source is set at cantonal average tax.

If you earn more than 120k then you are asked to do tax declaration, now if calculated tax is more than tax deducted at source then you need to pay difference otherwise you will receive the difference back.
What do you mean cantonal average tax? average across what ?
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Old 19.05.2020, 20:09
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Re: 120k and tax at source / quellensteuer

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What do you mean cantonal average tax? average across what ?
The average of tax rates across the Kanton
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Old 20.05.2020, 10:07
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Re: 120k and tax at source / quellensteuer

Total tax payable is made of three parts: Federal + State(Canton) + Municipality(gemeinde)



Within a state first two remains same but third one(Municipality) varies a lot. Here is the table for municipal tax in canton Zurich


https://statistik.zh.ch/internet/jus...uerfuesse.html


lower than 100 means lower than cantonal average
equal to 100 means equal to cantonal average
higher than 100 means higher than cantonal average




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What do you mean cantonal average tax? average across what ?
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Old 20.05.2020, 11:06
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Re: 120k and tax at source / quellensteuer

How does this work if you earn exactly 120K and say, get a bonus (based on last year performance) of 3K? Same applies I assume, that you need to fill in tax declaration papers now?

If I take few weeks of unpaid leave to get the overall total back to under 120K, then all should be ok?
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Old 20.05.2020, 11:18
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Re: 120k and tax at source / quellensteuer

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How does this work if you earn exactly 120K and say, get a bonus (based on last year performance) of 3K? Same applies I assume, that you need to fill in tax declaration papers now?
Yes, if your total income (bonus is income) last year was over 120k then you have to file.
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Old 20.05.2020, 11:38
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Re: 120k and tax at source / quellensteuer

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How does this work if you earn exactly 120K and say, get a bonus (based on last year performance) of 3K? Same applies I assume, that you need to fill in tax declaration papers now?

If I take few weeks of unpaid leave to get the overall total back to under 120K, then all should be ok?
Note that it's not how much money you actually earned, but projected earnings if you would've worked the whole year: for example if you started you job in June and you yearned 70k, you will be asked to file taxes (because it makes it 140k per year).
I'm not sure how the "unpaid leave" would count here - maybe worth checking with the tax office
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Old 20.05.2020, 14:59
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Re: 120k and tax at source / quellensteuer

In Geneva threshold to file tax return is 500K not 120K. https://www.ch.ch/en/tax-source/


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How does this work if you earn exactly 120K and say, get a bonus (based on last year performance) of 3K? Same applies I assume, that you need to fill in tax declaration papers now?

If I take few weeks of unpaid leave to get the overall total back to under 120K, then all should be ok?
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Old 20.05.2020, 15:29
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Re: 120k and tax at source / quellensteuer

I have received a withholding tax credit note from my canton (aargau) saying that the amount of taxes paid by my employer have been forwarder to my local municipality as an account.
I will have to fire a tax declaration and i will get refunded if it will result that i have to pay less.
Is it the normal procedure to anticipate the money and eventually have the difference later? (I am a B permit)
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Old 20.05.2020, 17:03
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Re: 120k and tax at source / quellensteuer

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Yes, if your total income (bonus is income) last year was over 120k then you have to file.
And it seems, given what happened to a student in another thread, if you receive a tax return - best fill it in.
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Old 20.05.2020, 20:57
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Re: 120k and tax at source / quellensteuer

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Yes, if your total income (bonus is income) last year was over 120k then you have to file.
The ZH tax authorities confirmed me that only fixed income (salary) is taken into account for determining this 120K threshold, excluding bonus or other variable pay.

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Note that it's not how much money you actually earned, but projected earnings if you would've worked the whole year: for example if you started you job in June and you yearned 70k, you will be asked to file taxes (because it makes it 140k per year).
I'm not sure how the "unpaid leave" would count here - maybe worth checking with the tax office
Correct. Not checked but I would logically assume that unpaid leave has no impact in that regard.

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In Geneva threshold to file tax return is 500K not 120K. https://www.ch.ch/en/tax-source/
Yes and no. Currently the case but they finally realized that this (unique across all cantons) was obsolete and not applied in practice anymore so with the new reform it will be 120K as from 1st January 2021.
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Old 20.05.2020, 20:59
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Re: 120k and tax at source / quellensteuer

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The ZH tax authorities confirmed me that only fixed income (salary) is taken into account for determining this 120K threshold, excluding bonus.
Sounds strange as it is income and therefore taxed
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Old 20.05.2020, 22:20
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Re: 120k and tax at source / quellensteuer

note that if your base salary+bonus goes over 120K by even 1chf you will then be required to fill a tax return for that year and all future years.

Happened to my husband (took on additional duties for 6 months, was paid a 'bonus' - plus the subsidy for school fees provided by hsi employer is also counted as 'taxable' - with three kids... so even though the 'base salary' was not high, it all added up quickly...

Went over by less than 1000chf for the year, just once... Then had to do tax returns for all future years. Estimated additional tax over 10 years - well over 10K.
'taxable' income for future years was significantly lower, but too bad, still need to put in tax returns.

Oh, and it was stuffed up by the employer (failed to declare discount on school fees as taxable) for 4 years - so not only did thy mess up the back-taxes, yearly statements, and we had to then get a tax advisor, and organise 4 years of tax returns in one month....then get the bills...

It was sorted out best by a short visit to the cantonal tax department. Their advisor was very helpful. Two key pieces of information:

- it's totally 'fair' - once you go over 120k you pay the 'same as any Swiss person'....

- if you get a big bill (which can feel 'big' if your salary has dropped, expenses have increased and you weren't expecting it).... it's completely straightforward to organise a payment plan - once you get the bill, you just write to them straight away to request it split into however many months you like. We were advised that as long as this is less than 12 months (we were suggested maximum 9-10 months)... they won't question it, and you can pay it in installments...

Oh, and someone else said, the actual processing of tax returns and bills will 'lag'.

One final tip - you can delay lodgement of tax returns as well - if you request before end March you can usually delay 6 months - to September. So it can spread it out a bit if you get a 'back tax' bill and are getting close to the next one being due in.
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Old 21.05.2020, 00:15
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Re: 120k and tax at source / quellensteuer

Does that mean in the end you had to pay more tax because the real calculated tax was more, than the default one applied by employer on the average level?

That's what I'm afraid of, that taxes will be significantly higher and there is going to be some crazy bill for the tax..

(I'm in Lausanne area (Vaud canton) if that matters)
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Old 21.05.2020, 06:37
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Re: 120k and tax at source / quellensteuer

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Does that mean in the end you had to pay more tax because the real calculated tax was more, than the default one applied by employer on the average level?

That's what I'm afraid of, that taxes will be significantly higher and there is going to be some crazy bill for the tax..

(I'm in Lausanne area (Vaud canton) if that matters)
It isn’t a default one applied by the employer. It is set by the canton. The employer is just collecting on behalf of the tax authorities. As has been written above, the withholding tax is just a pre-payment of the actual tax that you would owe, as would any Swiss or foreigner with a C permit (and various other cases).

You can look on the tax office’s website as you have been told above, to see whether the commune you live in has a tax rate above or below the cantonal average, you can call up/email the tax office and ask them, or you can use one of the many online tax calculators to get an idea of what money would be owed in which direction.
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Old 21.05.2020, 07:19
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Re: 120k and tax at source / quellensteuer

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Sounds strange as it is income and therefore taxed
Yes, it is taxed at source. They just don't include it in the criteria for "must fill in a return". Not that strange.
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Old 21.05.2020, 07:27
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Re: 120k and tax at source / quellensteuer

I was told by them that total salary matters not just the fixed one. Unfortunately I once crossed 120k due to bonus and later received forms for the tax return. Since then I am receiving forms however my fixed salary is much lower than 120k. In Zurich city actual tax rates are much higher than the tax at source.

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The ZH tax authorities confirmed me that only fixed income (salary) is taken into account for determining this 120K threshold, excluding bonus or other variable pay.
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