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-   -   Taxes in Switzerland (https://www.englishforum.ch/finance-banking-taxation/301424-taxes-switzerland.html)

chemles 25.11.2020 23:38

Taxes in Switzerland
 
Hi all

New post, new member! (please be gentle!)

I have a question. I am Spanish, I work in London in the pharma sector. I have received a job offer from a company in Switzerland (Canton Schwyz). All happened in less than a week.. mad, I know! Approached me on LinkedIn, job offer in 3.5 days!

I am now considering whether to move or not and net pay is important. My offer is for CHF 200k. 7% will be my contribution towards my company's pension. Therefore I will be taxed on CHF 186k.

The company is in Pfaeffikon, in zip code: 8808. I am 33years old, single, no kids, no religion, no net worth and if I move to Pfaeffikon I will get an apartment there. Could you please advise what taxes I will pay?

I am trying the different tax calculators and get different results. The one posted here:

https://swisstaxcalculator.estv.admi...ome-wealth-tax

shows that my cantonal+communal+direct federal taxes will be 22,065. Therefore am I right believing that my net pay will be 186,000-22,065=163,935. So, on a per month basis: 13,661 net?

However, eth:

https://ethz.ch/en/the-eth-zurich/wo...alculator.html

shows 11,757 net.

Could you please explain which one is correct? Thank you very very much!

(Please guys do not go to the route of telling me both amounts are high enough and I should be grateful. I am providing financial support to a member in my family and the 2k difference is important)

Landers 26.11.2020 01:25

Re: Taxes in Switzerland
 
You need to find the tax calculator for the canton Schwyz. Beware there is also a Pfaeffikon in Kanton Zurich. Global income is taxed either directly or indirectly. I think Schwyz is a low tax canton. You get taxed based on where you live, not where you work.

aSwissInTheUS 26.11.2020 01:41

Re: Taxes in Switzerland
 
Quote:

Originally Posted by chemles (Post 3243054)
Tax calculators and get different results. The one posted here:

https://swisstaxcalculator.estv.admi...ome-wealth-tax

shows that my cantonal+communal+direct federal taxes will be 22,065. Therefore am I right believing that my net pay will be 186,000-22,065=163,935. So, on a per month basis: 13,661 net?

However, eth:

https://ethz.ch/en/the-eth-zurich/wo...alculator.html

shows 11,757 net.

Could you please explain which one is correct? Thank you very very much!

The first is for regular taxation to second for tax at source. As your gross income is >120k you will have to use the one for regular taxation. Otherwise there will be a ~5k difference for your salary. In the end the calculator can only give you a ballpark figure as long as the deductions are only estimated.

You also have to know if you have to enter gross or net income and what is net income. But with your pay check you should be smart enough to find this out for yourself or able to afford a professional which can explain it to you.

neorion 26.11.2020 01:51

Re: Taxes in Switzerland
 
The ETH calculator calculates all uni withholding, including insurance AND *pension* (which you say you would already be paying at your company and have pre-subtracted). If you put in your full salary (200,000), it gives you 12,634, which is closer to the other calculation you made. Working at ETH may also require you to pay for some Zurich things that you may not have to pay for if you work and live in Schwyz (not 100% sure on the accuracy of this, as I am no expert - just trying to be helpful).

I would say if this is a make-it-or-break-it moment for you, tell the HR that you need tax guidance and a better understanding of take-home pay. It sounds like they really want you, so they should be willing to give you a realistic estimate or at least point you in the direction of someone who can (and maybe pay that someone as part of your recruiting costs).

Good luck, and I hope you get the info you need to make the choice that fits you best.

P.S. If you've been reading this forum about the cost of living in Switzerland/Zurich, people here (IMHO!) absolutely over-estimate how much money is "necessary" to live a good life. You can lead a modest (but comfortable!!) lifestyle and have generous savings to support others! I don't know what kind of lifestyle you're looking for, but just thought I'd flag up in case you took some of these "120k is minimum wage in CH" posts too seriously. :)

Landers 26.11.2020 01:55

Re: Taxes in Switzerland
 
Quote:

Originally Posted by aSwissInTheUS (Post 3243079)
The first is for regular taxation to second for tax at source.


The second gives a choice for tax at source or not. The problem is it's the wrong canton (unless I've majorly missed something)

aSwissInTheUS 26.11.2020 03:52

Re: Taxes in Switzerland
 
Quote:

Originally Posted by Landers (Post 3243081)
The second gives a choice for tax at source or not. The problem is it's the wrong canton (unless I've majorly missed something)

You can chose the canton of residence. If you deselect tax at source option it will not calculate any tax but just the usual deductions only.

Quote:

Originally Posted by neorion (Post 3243080)
Working at ETH may also require you to pay for some Zurich things that you may not have to pay for if you work and live in Schwyz (not 100% sure on the accuracy of this, as I am no expert - just trying to be helpful).

There is no canton Zurich specific stuff. Selecting the correct canton of residence is all it takes. Pension contributions however are ETH specific.

chemles 26.11.2020 10:16

Re: Taxes in Switzerland
 
Thank you all for your responses. (In the ETH calculator you can select the canton and I did Schwyz as the plan is to live there).

May I please understand what are the taxes that one pays? Am I right in assuming you have to account for 1) cantonal, 2) federal, 3) municipal, 4) withholding?

I tried to use the canton Scwhyz one (https://www.sz.ch/steuern/steuern-na...3487-3483-3481) and the answer is the same with the first calculator I mentioned. However, there is no mention of withholding tax which given my permit B I think I should take into account. Right?

komsomolez 26.11.2020 10:23

Re: Taxes in Switzerland
 
Quote:

Originally Posted by chemles (Post 3243135)
Thank you all for your responses. (In the ETH calculator you can select the canton and I did Schwyz as the plan is to live there).

May I please understand what are the taxes that one pays? Am I right in assuming you have to account for 1) cantonal, 2) federal, 3) municipal, 4) withholding?

I tried to use the canton Scwhyz one (https://www.sz.ch/steuern/steuern-na...3487-3483-3481) and the answer is the same with the first calculator I mentioned. However, there is no mention of withholding tax which given my permit B I think I should take into account. Right?

Federal, cantonal, municipal. Tax at source (which you may mean by withholding) is a proxy for the sum of these three. With B permit, this will be deducted form your salary directly (lists of tax burden available on sz.ch, depends on your family situation as well). At the end of the year you do a proper tax filing and the final tax will be calculated against what you have already paid over the year. So it is just a cash issue.

Taxable income will be calculated after deduction of social security, health insurance.

SZ is cheap.

Here are the at-source tax tariffs for SZ. With (left) or without (right) church tax. A (single), B (household with one income), C (two incomes). The number, e.g. C2N, is for the number of kids.

https://www.sz.ch/unternehmen/auslae...3-441-439-4667

chemles 26.11.2020 11:32

Re: Taxes in Switzerland
 
@komsomolez - thank you! I don't speak German so can't navigate things very well as on that website the auto translate does not work.

I now understand - so withholding tax includes federal, cantonal and municipal. However I am also hit with deductions for social security on top of those three.

Thank you.

Phil_MCR 26.11.2020 11:47

Re: Taxes in Switzerland
 
you can also try this calculator which can give you an idea of some of the other deductions: https://www.lohncomputer.ch/de/ergebnis/

komsomolez 26.11.2020 12:55

Re: Taxes in Switzerland
 
Quote:

Originally Posted by chemles (Post 3243176)
@komsomolez - thank you! I don't speak German so can't navigate things very well as on that website the auto translate does not work.

I now understand - so withholding tax includes federal, cantonal and municipal. However I am also hit with deductions for social security on top of those three.

Thank you.

Hit with deductions?

You will pay a very reasonable amount for pension (state, AHV, 5.2% or so), unemployment insurance (1.1%, ALV) and pension fund (company, probably the 7% you mentioned). Plus health insurance.

These costs will be deducted from your gross income. You pay tax only on the taxable income ("steuerbares Einkommen") which is gross after deductions.

Sean Connery 26.11.2020 13:04

Re: Taxes in Switzerland
 
you will be really fine with that income. Do a tax return with expert advise and you'll pay less; Pfäffikon SZ is quite low on taxes but is a dump of the highest order.

all-in-all, you will survive and will not go hungry :)

komsomolez 26.11.2020 13:07

Re: Taxes in Switzerland
 
Quote:

Originally Posted by Sean Connery (Post 3243225)
you will be really fine with that income. Do a tax return with expert advise and you'll pay less; Pfäffikon SZ is quite low on taxes but is a dump of the highest order.

all-in-all, you will survive and will not go hungry :)

Pfaeffikon sucks, I agree. Some better options in the area exist, but for sure it is not city life.

And yes, for a single 33yo this is quite a lot of money. But be careful, there have been examples of people here that managed to spend all of their 180-200k income on god only knows what.

bankman 26.11.2020 13:58

Re: Taxes in Switzerland
 
Suppose someone earns 200K and lives in Pfaffikon sz

What annual take home pay would they likely get after all deductions and 7% pension

I think that would help the OP

Personally I think 150K take home is the right number

Also I d love to know what niche skills he has to get 200K salary

aSwissInTheUS 26.11.2020 14:02

Re: Taxes in Switzerland
 
Quote:

Originally Posted by bankman (Post 3243254)
Suppose someone earns 200K and lives in Pfaffikon sz

What annual take home pay would they likely get after all deductions and 7% pension

I think that would help the OP

Personally I think 150K take home is the right number

It is a good ball park number. But could also be also be 155k or 148k.

eyebeebe 26.11.2020 18:40

Re: Taxes in Switzerland
 
Quote:

Originally Posted by bankman (Post 3243254)

Also I d love to know what niche skills he has to get 200K salary

The OP says pay of 200k, not salary. One could get that working in a bank, man.

eyebeebe 26.11.2020 18:57

Re: Taxes in Switzerland
 
Quote:

Originally Posted by Sean Connery (Post 3243225)
Pfäffikon SZ is quite low on taxes but is a dump of the highest order.

Pfäffikon is in the joint lowest tax Gemeinde in Switzerland. We keep the nice parts hidden to keep the riff-raff out.

komsomolez 26.11.2020 19:32

Re: Taxes in Switzerland
 
Quote:

Originally Posted by eyebeebe (Post 3243413)
Pfäffikon is in the joint lowest tax Gemeinde in Switzerland. We keep the nice parts hidden to keep the riff-raff out.

:D

You are not keeping anyone out. There are like 30.000 cars queueing through every day.

eyebeebe 26.11.2020 19:53

Re: Taxes in Switzerland
 
Quote:

Originally Posted by komsomolez (Post 3243427)
:D

You are not keeping anyone out. There are like 30.000 cars queueing through every day.

Exactly. They aren‘t stopping. I can understand if you just drive down Kantonstrasse why you think it’s dump, but those who do are wrong.

I should update my location, as I live in Wilen now. However, I still have a soft spot for misunderstood little Pfäffikon.

komsomolez 26.11.2020 20:10

Re: Taxes in Switzerland
 
Frankly, if I was 33 and single with 200k, I would pay the tax and live in Zurich. Enge or Wiedikon maybe. Going to cost also for rent and commute, but still plenty left of that salary.


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