Withholding tax in Switzerland: practical guide

Scales, calculation, rectification and transition to ordinary taxation: everything expatriates need to know.

If you hold a B (residence) permit in Switzerland, your income tax is directly deducted by your employer each month: this is tax at source. This system, which concerns around 1.2 million people in Switzerland, simplifies tax collection but has important subtleties. Since the reform entered into force in 2021, the rules have been harmonized at the federal level, notably offering the possibility of requesting subsequent ordinary taxation to claim additional deductions. This guide details how the system works, the applicable scales and your rectification options.

Who is affected by withholding tax?

Withholding tax does not concern all foreign residents in Switzerland. Here are the categories of taxpayers subject to this regime and those who are exempt.

• Holders of a B permit (residence): subject to withholding tax until they obtain a C permit
• Holders of an L (short-term) license: systematically subject to withholding tax
• Cross-border workers (G permit): subject to cantons that tax cross-border workers (mainly Geneva)
• Foreign artists, athletes and speakers: submitted to the source for their performances in Switzerland
• Directors domiciled abroad: submitted to the source on their directors' fees
• Exempt: holders of a C permit (establishment), Swiss citizens, spouses of Swiss citizens with a B permit

Withholding tax scales

The number following the letter indicates the number of dependent children. For example: B1 = married, one child, spouse without income; C2 = married, two children, spouse with income. Children are taken into account up to 18 years old (or 25 years old if they are in training).

Scale	Situation	Description	Indicative rate (income CHF 8,000/month, canton VD)
A	Single without children	Single person, divorced or widowed without family responsibilities	14 – 17%
B	Married, spouse without income	Couple where only one spouse works in Switzerland	6 – 10%
C	Married, spouse with income	Both spouses work in Switzerland or the spouse has income abroad	10 – 14%
H	Single-parent family	Single person with dependent child(ren)	8 – 12%
D	Incidental income	Secondary activity (scale without deductions)	10 – 15%

Calculation and monthly withdrawal

Withholding tax is calculated and deducted each month by your employer, who pays it directly to the cantonal tax administration. The amount withdrawn depends on your gross monthly income, your scale (A, B, C, etc.) and the canton of residence.

The calculation takes into account the gross monthly salary, including the 13th month (distributed over 12 months or imposed on the month of payment), bonuses and gratuities, benefits in kind (car, housing), and family allowances. Compulsory social contributions (AVS, LPP, unemployment insurance) are deducted from gross income before application of the scale.

Calculation example

Let's take the case of a single engineer (scale A0) residing in the canton of Vaud, with a gross monthly salary of CHF 8,500.

Subsequent ordinary taxation (TOU)

Since the 2021 reform, any taxpayer taxed at source can request subsequent ordinary taxation (TOU). This procedure consists of completing a classic tax return and being taxed according to the ordinary scale, taking into account all possible deductions.

The TOU is particularly advantageous if you have significant deductions not taken into account in the source scale: 3rd pillar contributions, 2nd pillar buyouts, childcare costs, mortgage interest, training costs, etc.

TOU required

Subsequent ordinary taxation is obligatory in the following cases:

• Annual gross income above CHF 120,000: you are required to file a tax return
• Income not subject to source: real estate income, alimony received, significant wealth income
• Spouse of Swiss nationality or holder of a C permit: compulsory joint taxation

ALL on request

If your income is less than CHF 120,000, you can voluntarily request TOU. This request must be made before March 31 of the following year. Please note: once the TOU is granted, it is irrevocable for the entire duration of the stay with a B permit. Switching to ordinary taxation is therefore not always advantageous - do a simulation before committing.

Rectification and complaint

If you notice an error in the withholding tax - incorrect scale, family situation not updated, child not taken into account - you have recourse available.

• Immediately report any change in situation to your employer (marriage, birth, divorce, arrival of spouse) so that the scale is adjusted the following month
• Request a correction of the tax at source from the cantonal tax administration before March 31 of the following year
• File a formal complaint within 30 days of notification if you dispute the amount withheld
• In the event of persistent disagreement, an appeal to the cantonal administrative court is possible within 30 days following the complaint decision.

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Frequently Asked Questions

What happens when my income exceeds CHF 120,000?

If your annual gross income exceeds CHF 120,000, you are automatically subject to subsequent ordinary taxation (TOU). You will receive a tax declaration form to complete, like any ordinary taxpayer. The withholding tax already deducted will be deducted from your final tax. Depending on your deductions, you may receive a refund or have to pay more. This threshold of CHF 120,000 is assessed per taxpayer (not per household).

How is the tax calculated for a married couple where both spouses work?

If both spouses work in Switzerland, scale C is applied to each spouse on the basis of their own income. Each employer withholds tax separately. However, Schedule C takes into account the fact that the household has two incomes, and the rates are adjusted accordingly. If only one spouse works, scale B (more favorable) applies. If the spouse works abroad, scale C is applied with declaration of foreign income to determine the rate.

What happens if I move to another canton during the year?

Your withholding tax is recalculated according to the scale of the new canton from the month following your move. It is the canton of residence on December 31 that determines the taxation for the entire year in the event of TOU. Inform your employer immediately when moving so that the correct scale is applied. The cantons do not have the same rates: moving from Geneva to Zug can reduce your withholding tax by 30 to 50%.

Can I deduct my contributions to the 3rd pillar if I have tax at source?

The withholding tax scale already includes a flat rate for certain deductions (professional expenses, health insurance, welfare). Contributions to the 3rd pillar are NOT included in this package. To claim them, you must request subsequent ordinary taxation (TOU) if your income is less than CHF 120,000 (voluntary TOU), or declare them in your tax return if your income is greater than CHF 120,000 (mandatory TOU). The deduction is a maximum of CHF 7,258 in 2026.

When does one switch from withholding tax to ordinary taxation?

The transition to ordinary taxation occurs automatically in three cases: obtaining the C permit (establishment, after 5 to 10 years of residence), marriage with a Swiss citizen or a C permit holder, or acquisition of Swiss nationality. From the year following this event, you complete a traditional tax declaration and pay your taxes by quarterly or monthly installments. The passage is final and cannot be reversed.