Withholding tax in Switzerland – simply explained for expats
If you're an expat working in Switzerland, you've probably heard of "withholding tax." But what does it actually mean? Who is affected? What can you do if you think you have paid too much? You will find all the key information clearly explained here.
What is withholding tax?
Withholding tax is a special type of income tax. It is deducted directly from your salary by your employer, meaning it is deducted at the "source." This means you receive your pay after taxes, similar to the way payroll taxes are handled in many other countries.
Your employer then transfers the tax directly to the authorities. If you are subject to withholding tax, you usually don't need to file a tax return.
Who is subject to withholding tax?
Withholding tax generally applies to foreign employees working in Switzerland who do not have a C residence permit. If you come to Switzerland with a B or L permit and begin working here, your income will be taxed automatically.
How high is the withholding tax?
The level of withholding tax depends on several factors:
- Your gross salary
- Your marital status (single, married, separated, etc.)
- The number of children or dependents
- Your place of residence, as tax rates differ by canton
Standard "withholding tax rates" take these factors into account. However, these are lump sums and may not always reflect your exact personal situation.
When does it make sense to file a voluntary tax return?
In many cases, it may be worthwhile to file a tax return in Switzerland, even if withholding taxes have already been deducted. This process is called a "subsequent ordinary assessment." It allows you to claim deductions that were not included in the withholding tax, such as:
- Work-related expenses (e.g., commuting or training costs)
- Pillar 3a contributions
- Medical expenses or childcare costs
This can be especially beneficial for those with higher incomes, property ownership, or split income between spouses, often resulting in refunds of several thousand francs.
How does the tax refund work?
If you choose the standard assessment, you must submit a complete tax return to your canton of residence. Then, the tax authorities will check to see if you have paid more than required and will refund you the difference.
Note that in many cantons, this request must be filed by March 31 of the following year. Missing the deadline means losing the right to a refund for that year.
Our tip
We recommend that expats who are subject to withholding tax have their personal tax situation reviewed, especially during the first year after moving. Accurate declarations can lead to unexpected benefits and refunds.
More key information for expats
Residence & tax liability
In Switzerland, all expats living or employed here must pay taxes – but the applicable regulations change according to their residency status.
Ordinary assessment
To benefit from available deductions, you can submit a voluntary tax return in Switzerland – which often results in significant savings.
International income
International income must be included in the Swiss tax return – we guide you on how to declare everything correctly and completely.
Double taxation
International agreements protect you from double taxation – what matters is declaring your income correctly in Switzerland.
Tax deductions
With targeted deductions such as pillar 3a or commuting costs, expats in Switzerland save several hundred francs in taxes each year.
Assets & foreign accounts
Foreign assets must be reported in Switzerland – complete declaration protects you from legal issues and unnecessary tax risks.
Spouse living abroad
Cross-border marriages often involve complex tax issues – we support you in determining the correct tax rate and tax authority.
Do you have any questions?
Not every withholding tax situation is the same. If you are unsure how to classify your case for tax purposes, feel free to contact us.