Employer Tax Contributions

Tax Type	Rate (Employer Share)	Base
Old Age and Survivors' Insurance (AHV/AVS) / Disability Insurance (IV/AI) / Income Compensation (EO/APG)	5.3%	Gross Salary
Unemployment Insurance (ALV/AC)	1.1%	Gross Salary (up to CHF 148,200 annually)
Occupational Pension (LPP/BVG)	Varies by age (at least 50% of total)	Coordinated Salary (above CHF 22,050 annually)
Occupational Accident Insurance (UVG/LAA)	Varies by industry/risk	Gross Salary (up to CHF 148,200 annually)

Filing & Compliance

• Register with a compensation office (AHV/AVS fund) and relevant social security and tax authorities.
• Deduct contributions monthly and remit payments to authorities and insurers monthly or quarterly.
• Provide employees with annual salary certificates and file year-end declarations.

In Switzerland, employee tax deductions vary based on residency, canton, and individual circumstances.

Federal Withholding Tax

Withholding tax (Quellensteuer) applies primarily to foreign residents without a C permit and those residing abroad with Swiss income. The employer deducts tax directly from the salary and remits it to the cantonal tax authorities. This covers federal, cantonal, and communal income taxes.

Ordinary Tax Assessment

Swiss citizens and C permit holders typically fall under the ordinary assessment procedure. They file an annual tax return and pay taxes directly.

Key Deductions

• Social Security and Pension Contributions: Contributions to the Swiss social security system and pension plans are deductible, including voluntary contributions to the 3rd pillar (up to specified limits).
• Commuting Expenses: Deductions for commuting costs, primarily public transport, are generally capped (CHF 3,000 for federal tax, varying cantonal limits).
• Professional Expenses: Work-related expenses (e.g., professional training, unreimbursed business expenses) are deductible. A lump-sum deduction (3% of net salary, minimum CHF 2,000, maximum CHF 4,000) also covers expenses such as work-related materials. This applies federally and some cantons have their own regulations as well.
• Interest Payments: Interest on private loans and mortgages is deductible.
• Health and Insurance Premiums: Premiums for health, accident and life insurance, are deductible up to specified limits, which are higher for those not contributing to the second pillar.
• Alimony Payments: Periodic alimony payments to ex-spouses and children under 18 are deductible.
• Charitable Donations: Contributions to Swiss-based charities are deductible.
• Double-Earner Deduction: If both spouses work, a deduction of 50% of the lower income applies (minimum CHF 8,600, maximum CHF 14,100 as of 2025).
• Child Deduction: CHF 6,700 deduction per dependent child is applicable.
• Education Expenses: Expenses for education beyond secondary level are deductible up to CHF 13,000 (as of 2025).

Cantonal Variations

Cantons have different regulations impacting deduction types and amounts. Consult cantonal tax authorities for specific details.

Additional Considerations for Expatriates

Expatriates might qualify for further deductions or tax-free reimbursements, which are reviewed on a case-by-case basis.

Employer Responsibilities under Withholding Tax

Employers are responsible for deducting withholding tax from relevant employees' salaries and remitting it to the cantonal authorities monthly or quarterly, depending on the canton.

Please note that this information is current as of February 5, 2025, and is subject to change.