Side Job in Switzerland: How to Tax Your Additional Income Correctly and Save Money

Did you know that in Switzerland you are taxed on side jobs starting from the very first franc you earn? At the same time, you can save money if you know and apply the right deductions. Many employees lose hundreds of francs every year because they are unaware of the lump sums and deductions available to them when it comes to side income taxation.

Tax Liability on Side Income: The Basics

Every franc from side activities is taxable – this rule applies across Switzerland without exception. Whether you freelance on the side, give tutoring lessons, or work a mini-job: the tax office is interested in all your income from secondary activities.

The 20 Percent Rule: Your Path to Lower Taxes

Here’s the good news: for federal tax and in most Swiss cantons, you can deduct 20% of your side income for work-related expenses as a lump sum. This system works as follows:

• Minimum deduction: CHF 800 per year
• Maximum lump sum: CHF 2,400 per year
• Calculation: 20% of side income (within the above limits)

Practical Example of the Lump Sum

With side income of CHF 6,000, you can deduct CHF 1,200 (20%) as a lump sum. If you earn CHF 15,000 on the side, you reach the maximum lump sum deduction of CHF 2,400.

Actual Expenses vs. Lump Sum: Which Is Better?

If your actual work-related expenses are higher than the lump sum, you must be able to prove them. That’s why it’s important to collect receipts for:

• Travel costs related to the side job
• Work materials and tools
• Training and education costs
• Work clothing
• Computers and software

A detailed expense log can really pay off if your actual costs exceed the lump sum.

Cantonal Specifics: Where Do Other Rules Apply?

Not all cantons handle side income in the same way. These important exceptions are worth knowing:

• Cantons without side income deductions
  • Schwyz: No deduction for side income
  • Basel-Stadt: No lump sum for side income
• Special rules
  • Ticino: Lump sum is only CHF 800 (instead of 20% of income)
  • Appenzell Ausserrhoden and Innerrhoden: Special rules for secondary official duties
  • Nidwalden: Specific rules for official duties

Strategic Tax Planning for Your Side Income

Optimize your tax situation with smart planning:

• Documentation is everything: keep an expense log for all work-related costs
• Mind the timing: spread large purchases over different tax years
• Leverage cantonal differences: consider local tax rules if moving cantons

Conclusion: Mastering Side Job Taxation

Taxation of side income in Switzerland follows clear rules but also offers optimization opportunities. With the 20% lump sum or proof of higher actual expenses, you can significantly reduce your tax burden. Stay informed about the specific regulations in your canton and make full use of all legal deductions.