super open question and I can't divulge too many details BUT looking for any suggestions/thoughts... or just criticism and banter

- married couple, 2 kids
- both working and employed
- canton vaud, lausanne
- gross salary above the EF benchmark i.e. we live comfortably

I've always believed that it is better to grow your income rather than "optimize" your expenses i.e. there is a floor but there is no ceiling. for that reason taxes has always been an after thought and the priority is on being compliant and following the law.

I've always outsourced my tax declaration to an accountant and he's done a good job. Sometimes I get a bill, other times I receive some money back. Usually in the +/- 1k-5k range. But he is an independent and probably does the standard... I also pay him accordingly

This year I decided to understand what % of my gross revenue is taxes. It's close to 35% (federal, cantonal, commune). It "feels" much higher than what I would expect. I would expect to be in the high 20s but certainly under 30%. Am I leaving tax optimization strategies on the table? Aside from moving to Zug, which is not realistic, what else can an employee do to optimize the tax bill?


(go ahead hit me with the EF criticism... but ideas & suggestions are also welcome)

The explanation is that you live in one of the most expensive cantons.

Something's missing, you need to differentiate between income and wealth tax.

200k net income costs you around 43k.
4kk taxable wealth costs you 30k.
Combined you're at around 35% of income.

No church tax assumed, kids 9+11. Here's the toy for you to play with.

35% is pretty standard. you could make huge contributions to pension to reduce your taxable.

thanks that's interesting. I always thought wealth was a minor contribution. in your example 43K out of 200K is ~20%... this means wealth is actually significant.

what falls under wealth? I'm guessing all assets: cash, equities, investments, etc. but what about property. say on a $1M house with $800K mortgage. Is the wealth $1M or $200K or something entirely different

correct assumptions

I already do an indirect mortgage amortization via 3rd pillar so that's maxed out unfortunately. or do you mean topping up my 2nd pillar. quick calculations show investing is more efficient than topping up the 2nd pillar.

what about 2nd pillar?

I thought about and edited my previous comment. quick calculations show investing is more efficient than topping up the 2nd pillar.

Renting or home owner - that makes a big difference to your options.

The allowances for travel, professional costs etc are small individually but add up to quite a subtraction from your gross so it's worth checking you have them all.

Depends on your age - the immediate tax saving takes a good few years to catch up with increased investment growth, and you have the volatility to contend with.

If you say 3% growth for P2 vs 10% growth for investment, it's about 5 years to even out a 30% tax reduction.

interesting, will look into that, thanks

You could also top up pillar 2 and then withdraw to pay off mortgage. or spend on deductible home renovations. or donate to charity.

$200K.

Your interest payments are tax deductable from income tax, but you'll have an imputed rent added to your income.

Wealth is taxed progressively (same for income), the maximum rate (it depends on canton and municipality) can be as gigh as 1%. For Lausanne the maximum is 0.8%, considering the level of precision in this thread you could assume below 300k is free and above it's the maximum.

Your worldwide wealth and income is taxed, unless it's taxed by another country (typically real estate).

10% investent performance is a tall order, especially in CHF. Keep in mind that pillar 2 also insures against death and invalidity, that's not free.

State your income and your assets, then we can tell. Without, it is a stupid guessing game.

Have you also topped up for any missing years of pension, and topped up your wife's pension fund as well to the max ?


I'm not saying that's the best use of available funds.... but the tax optimisation makes it quite attractive, and you may want to do the maths on how many 'realistic' years you have left to retirement age, and how much you really should have in the pension fund to afford it...



And yes, you are in the third highest canton for tax....

The insurance part is a separate payment based on your salary and not impacted by additional voluntary payments, at least in the three PK I've been a member of.

I was waiting for the 1st stupid answer and you got it - congrats!

Others have provided a lot of helpful insights so I do appreciate that. I wasn't looking for precisions but rather ideas & suggestions (it's in the 1st post)

have a nice day

Widower and orphan pension payouts? I disagree.

OK, so half of your statement was correct and half of mine - disability is based on insured salary, death / survivor pension is based on savings.