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Old 22.10.2021, 14:16
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tax for couple with 1 child after marriage

Hello,

I was wondering whether I miss something here, I searched the forum but I could not find this specific situation.

I investigate the case for a couple (2 people with 100K gross income each) with one child. Whether it is worth marrying from the tax perspective. .

In the first picture you can see the tax per person (so multiplied by 2 for total couple tax) (CHF 14'612) and in the second you can see the situation of the couple as married (CHF 26'042).

So when they get married, despite with one child, they will pay more than 15K more. Do i miss something?

Thank you.
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  #2  
Old 22.10.2021, 14:24
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Re: tax for couple with 1 child after marriage

For some reason the pictures were not uploaded and I could not edit my answer. They are attached, taken from here: https://swisstaxcalculator.estv.admi...ome-wealth-tax


Thank you.
Attached Thumbnails
tax-couple-1-child-after-marriage-5.png   tax-couple-1-child-after-marriage-6.png  
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  #3  
Old 22.10.2021, 14:26
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Re: tax for couple with 1 child after marriage

I did not run the numbers before we came here, as we were already married, but you hear about the "marriage penalty" in Switzerland. There are various ideas how to abolish it, but so far, it is the case.
I do think it still holds with children, as single people can also claim dependents (but how do you do it? Each claims 1/2 the money for the same child? Again, no personal experience).
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Old 22.10.2021, 14:33
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Re: tax for couple with 1 child after marriage

I googled that recently as I thought with Ehe für alle me and my OH will be able to formalise our relationship but as @LiquidPaper already mentioned there is a "Heiratsstrafe" that leads to an additional tax burden and apparently also the AHV benefits will be reduced.
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Old 22.10.2021, 17:18
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Re: tax for couple with 1 child after marriage

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I did not run the numbers before we came here, as we were already married, but you hear about the "marriage penalty" in Switzerland. There are various ideas how to abolish it, but so far, it is the case.
I do think it still holds with children, as single people can also claim dependents (but how do you do it? Each claims 1/2 the money for the same child? Again, no personal experience).
Of course people complain while they ignore the benefits.

For not-so-high incomes marriage is actually a tax bonus, that benefits the vast majority of couples. And that doesn't even begin to account for AHV bonus, widow pension, and a full host of additional advantages.

Just tax everybody individually and be done with it. But those who fight that the most are exactly the same political groups who whinge about the marriage penalty.
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Old 22.10.2021, 18:02
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Re: tax for couple with 1 child after marriage

Married couples are taxed jointly and their incomes are added together.

The marriage penalty aka Heiratsstrafe affects high-income earners. You have to calculate it yourself but if both parters earn 2x100k CHF this is already around this threshold.

Only couples with low incomes are usually not affected by the marriage penalty. Below an income of around 150k CHF per year married couples pay less tax than cohabiting couples in many cantons depending on the canton.

AHV: Cohabiting couples can receive a combined AHV pension of up to CHF 4780 CHF/month, while married couples can receive a maximum of 3585 CHF/month.

BVG: My pension fund and I believe other as well pay out a pension or a one-time lump-sum settlement to the cohabiting partner in the event of death. This can be arranged by submitting a written declaration of beneficiary.

Pillar 3a: Similar to BVG, a correction in the the order of beneficiaries has to be submitted.

Inheritance law: Cohabitating couples obviously do not inherit anything from each other. If they have no children and neither an inheritance contract nor a will, the deceased's inheritance goes to the parents. As before… also this can be regulated.

https://www.vita.ch/de/vorsorgetheme...der-konkubinat

As I do not have and do not intend to have children, I do not currently see the advantages of marriage. Most aspects that are important to me can easily clarified by declaring the order of beneficiaries etc.
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Old 22.10.2021, 18:30
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Re: tax for couple with 1 child after marriage

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Married couples are taxed jointly and their incomes are added together.

The marriage penalty aka Heiratsstrafe affects high-income earners. You have to calculate it yourself but if both parters earn 2x100k CHF this is already around this threshold.

Only couples with low incomes are usually not affected by the marriage penalty. Below an income of around 150k CHF per year married couples pay less tax than cohabiting couples in many cantons depending on the canton.

AHV: Cohabiting couples can receive a combined AHV pension of up to CHF 4780 CHF/month, while married couples can receive a maximum of 3585 CHF/month.

BVG: My pension fund and I believe other as well pay out a pension or a one-time lump-sum settlement to the cohabiting partner in the event of death. This can be arranged by submitting a written declaration of beneficiary.

Pillar 3a: Similar to BVG, a correction in the the order of beneficiaries has to be submitted.

Inheritance law: Cohabitating couples obviously do not inherit anything from each other. If they have no children and neither an inheritance contract nor a will, the deceased's inheritance goes to the parents. As before… also this can be regulated.

https://www.vita.ch/de/vorsorgetheme...der-konkubinat

As I do not have and do not intend to have children, I do not currently see the advantages of marriage. Most aspects that are important to me can easily clarified by declaring the order of beneficiaries etc.

I run the same with two earners of 75k each. the tax difference is still >10k in Zurich...
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Old 22.10.2021, 20:18
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Re: tax for couple with 1 child after marriage

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Married couples are taxed jointly and their incomes are added together.
And taxed at a reduced rate. Which you conveniently brush under the carpet, as well as the fact that median household income in Switzerland is in the 90k area. Further, DINKS where both work 100% are the rare exception.

Thx for the immediate confirmation of what I said. You really couldn't make this stuff up if you tried.

As for the rest, see this article (in German). The two barcharts alone say it all. Note that the author is Avenir Suisse, a distinctly pro-business association. And that's taxation only, without considering the other advantages.
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Old 22.10.2021, 20:25
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Re: tax for couple with 1 child after marriage

All things considered, our tax here (both working full time, married, with a kid) is very reasonable for the quality of life we enjoy. I can't and won't complain. But I do know people who will not marry because of the "marriage penalty".
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Old 22.10.2021, 20:39
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Re: tax for couple with 1 child after marriage

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As for the rest, see this article (in German). The two barcharts alone say it all. Note that the author is Avenir Suisse, a distinctly pro-business association. And that's taxation only, without considering the other advantages.
So the OP with his 2x100,000 CHF income would actually fall in the 15100-18300 CHF bracket and pay more when married

Thanks for the link, this is the first I see a comprehensive comparison with concrete numbers.

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Old 22.10.2021, 20:41
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Re: tax for couple with 1 child after marriage

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Hello,

I was wondering whether I miss something here, I searched the forum but I could not find this specific situation.

I investigate the case for a couple (2 people with 100K gross income each) with one child. Whether it is worth marrying from the tax perspective. .

In the first picture you can see the tax per person (so multiplied by 2 for total couple tax) (CHF 14'612) and in the second you can see the situation of the couple as married (CHF 26'042).

So when they get married, despite with one child, they will pay more than 15K more. Do i miss something?

Thank you.
I’m a little concerned that you are “investigating the case for two people”, but seem to have no idea of the Swiss tax system, and look to EF for answers.

I hope that you are not being remunerated for this ‘service’?
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Old 22.10.2021, 21:31
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Re: tax for couple with 1 child after marriage

As for AHV, the payout may be lower, but you need to consider the contributions as well. The main or single earner model is still the norm, so his contributions are split between his and her AHV account, which advantages them compared to an unmarried person.

Again, you can't look at one side only.
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So the OP with his 2x100,000 CHF income would actually fall in the 15100-18300 CHF bracket and pay more when married
Without considering the child (which should be a net reduction for taxable income):
100k gross is 85k net (age 25-34, more like 83k for age 35-44), 78k after pillar 3a. ~156k together, the other deductions probably get the couple into the 140k range, 12k monthly. Overall they should clearly gain by marrying. Whether that's a good idea for the man is a different question.
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Thanks for the link, this is the first I see a comprehensive comparison with concrete numbers.
Glad to be of service.

Worth noting that the data are representative real tax data, actual taxes paid, as opposed to some paid-for theoretical calculations where the client predetermines the outcome.
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Old 22.10.2021, 22:11
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Re: tax for couple with 1 child after marriage

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So the OP with his 2x100,000 CHF income would actually fall in the 15100-18300 CHF bracket and pay more when married

Thanks for the link, this is the first I see a comprehensive comparison with concrete numbers.


According to the official calculator above, even for those earning 75k each (12.5k/month) the tax as married is much more than the graph depicts. Is it for a specific canton?
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Old 22.10.2021, 22:16
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Re: tax for couple with 1 child after marriage

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I’m a little concerned that you are “investigating the case for two people”, but seem to have no idea of the Swiss tax system, and look to EF for answers.

I hope that you are not being remunerated for this ‘service’?
What did I miss and you assumed that I "have no idea of the Swiss tax system"?

And even if this is the case, is it so bad to ask you? if it is, you are free to ignore this topic.
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Old 22.10.2021, 22:18
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Re: tax for couple with 1 child after marriage

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What did I miss and you assumed that I "have no idea of the Swiss tax system"?

And even if this is the case, is it so bad to ask you? if it is, you are free to ignore this topic.
You didn’t answer my question, and please don’t talk to me like that
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Old 22.10.2021, 22:52
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Re: tax for couple with 1 child after marriage

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What did I miss and you assumed that I "have no idea of the Swiss tax system"?

And even if this is the case, is it so bad to ask you? if it is, you are free to ignore this topic.
If this is the case it's not bad to ask but you shall be receiving an invoice from the EF admin shortly. Please, PM me your contact details.

Each case is very unique and should be calculated by a professional, even I assumed marriage is not tax efficient for me and after reading the Urs Max's post I might have changed my mind...
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Old 22.10.2021, 23:08
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Re: tax for couple with 1 child after marriage

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If this is the case it's not bad to ask but you shall be receiving an invoice from the EF admin shortly. Please, PM me your contact details.

Each case is very unique and should be calculated by a professional, even I assumed marriage is not tax efficient for me and after reading the Urs Max's post I might have changed my mind...

I was just curious about this tax topic and just went on a government tax calculator to run a very simple case which is close to mine and probably also be close to the real one for many here in the forum. Therefore, I just wanted to verify that there is nothing outstandingly wrong in my specific real-world case.

Nobody asked for a specific tax return service or anything similar. And I do not think that there are no topics with hundreds replies analysing more trivial stuff, without anybody asking for an invoice..

I understand that you can be suspicious of some people asking some stuff, I would also be, or that may be sensitive politically for some; but this is not the reason to be talked like that and each person should be evaluated separately.

Anyway, obviously there is no willingness for adding more value to this topic, so I wish you good luck, thanks.
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Old 23.10.2021, 10:12
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Re: tax for couple with 1 child after marriage

Has anyone considered divorce and then konkubinat for money reasons?

I got married for love and that has not changed 20 yrs later, however my understanding of the tax and pension system was not as good when I was young and lately I am very pissed at this whole AHV thing and not getting 2 full payments despite both working forerever plus all the additional taxes which are getting more since we have less and less children deductions (ok also less expenses but...)

So was wondzif anyone considered or has done this and happy to discuss in PM also.
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Old 23.10.2021, 15:02
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Re: tax for couple with 1 child after marriage

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I am very pissed at this whole AHV thing and not getting 2 full payments despite both working forerever plus all the additional taxes which are getting more since we have less and less children deductions (ok also less expenses but...)

So was wondzif anyone considered or has done this and happy to discuss in PM also.
Well, I’m also pissed that despite being single (divorced) - and so will only get one full AHV payment on reaching official retirement - that amount will be as much as someone that has paid far, far less into the system since 1986 than I have.

I’m also unhappy that the official retirement age for women was raised from 63 to 64 recently.

But the AHV is a touchy subject for many I expect…
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Old 23.10.2021, 23:18
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Re: tax for couple with 1 child after marriage

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According to the official calculator above, even for those earning 75k each (12.5k/month) the tax as married is much more than the graph depicts. Is it for a specific canton?
It looks like I misunderstood, and the sums are gross income.

That said, many higher earners own real estate. That gives significant wiggling room to steer taxes in some years, and may be cause for significant additional differences. Plus, many higher earners will be self-employed or business owners, neither are member of the employee's 2nd pillar which in turn opens the path to signifcant additional pillar 2 contributions (up to 30-35k per year, all tax-deductible).
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I’m also unhappy that the official retirement age for women was raised from 63 to 64 recently.
In reality you should be pissed that it wasn't raised to 65. Unless you're not really for equality.
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