Withholding tax in Switzerland

Who pays it, how the scales work, and how to request a correction or a move to ordinary taxation.

Short Answer

If you hold a B or L permit and work in Switzerland, your employer deducts income tax directly from your salary each month and pays it to the cantonal tax authority. This is withholding tax (Quellensteuer / impôt à la source). Depending on your income and situation, you may later be taxed under the ordinary system instead, either automatically or on request.

Withholding tax is the standard way most foreign employees are taxed in Switzerland while they hold a residence permit without settlement rights. Rather than filing a tax return once a year, you see the tax already deducted on your payslip, calculated from a scale that reflects your marital status, number of children and canton of residence.

The system was harmonised at the federal level in 2021, which standardised the tariff codes and the conditions for requesting subsequent ordinary taxation across cantons. This guide explains who is concerned, how the amount is worked out, when you can or must switch to the ordinary tax return, and what to do if you think your withholding tax is wrong.

Who is subject to withholding tax in Switzerland

Withholding tax applies to foreign nationals who work in Switzerland and do not hold a C permit (settlement permit) or Swiss nationality. It is deducted automatically by the employer, without any action needed from the employee for the deduction itself to happen.

Holders of a B (residence) permit: subject to withholding tax on employment income until they obtain a C permit
Holders of an L (short-stay) permit: subject to withholding tax for the duration of their stay
Cross-border commuters (G permit): subject to withholding tax in the canton where they work
Foreign artists, sportspeople and speakers, and board members domiciled abroad: taxed at source on their Swiss-sourced fees
Not subject: C permit holders, Swiss citizens, and spouses of Swiss citizens or C permit holders, who are taxed under the ordinary system instead

How the withholding tax scales work

The amount withheld is set by a tariff (or scale) identified by a letter, which encodes your marital status and whether your spouse also earns income, plus a number for dependent children. A married person whose spouse does not work in Switzerland and who has one dependent child, for example, is taxed on a different code than a single person with no children.

The exact rate for each scale, at each income level, is published by every canton in its own official tariff tables, because withholding tax remains a cantonal tax collected on behalf of the canton, the commune and the Confederation. The rate you actually pay therefore depends on your canton of residence (or, for cross-border commuters, your canton of work) as much as on your family situation, and can differ noticeably from one canton to a neighbouring one.

Single, divorced or widowed without dependent children
Married, only one spouse earning income in Switzerland
Married, both spouses earning income (each spouse is taxed on their own scale)
Single parent with one or more dependent children
Secondary or incidental employment, taxed on a flat scale without personal deductions

Dependent children are generally taken into account up to age 18, or longer while they are in initial education or training. Report a birth, marriage, divorce or separation to your employer immediately so the correct scale applies from the following month.

What counts towards the taxable amount

Your employer calculates withholding tax on your gross monthly income, which includes your base salary, a pro-rated share of the 13th-month salary where applicable, regular bonuses and gratifications, and taxable benefits in kind such as a company car or subsidised housing. Compulsory social contributions, including AVS/AHV, occupational pension (LPP/BVG) and unemployment insurance, are deducted before the scale is applied.

Because the scale already includes a standard, flat-rate allowance for common deductions such as basic professional expenses and standard insurance premiums, withholding tax does not automatically account for your personal circumstances beyond marital status and children. Deductions such as pillar 3a contributions, additional pension buy-ins, childcare costs for young children, or training costs are not reflected in the monthly deduction and can only be claimed by requesting ordinary taxation.

Moving to ordinary taxation

Since the 2021 federal reform, the rules for leaving the withholding tax system and being taxed under the ordinary regime, using a full tax return, are the same across Switzerland. This can happen automatically, because you cross a threshold or your circumstances change, or on request, if you want to claim deductions the scale does not cover.

When ordinary taxation is mandatory

You are required to file an ordinary tax return, and are taxed on your full income rather than only through withholding, in these situations:

Your gross annual income from employment reaches or exceeds CHF 120,000, assessed per taxpayer
You have significant income not covered by withholding tax, such as real estate income or substantial wealth
You marry a Swiss citizen or a C permit holder, or you obtain Swiss nationality or a C permit yourself

Requesting ordinary taxation voluntarily

If your income stays below the mandatory threshold, you can still ask to be taxed under the ordinary system, typically to claim pillar 3a contributions, pension buy-ins, childcare costs or training expenses that the withholding scale does not capture. The request must be filed with the cantonal tax authority by 31 March of the year following the tax year concerned, and once granted it generally applies, and cannot be reversed, for as long as you remain subject to withholding tax.

Because this choice is binding, it is worth estimating in advance whether your deductible expenses genuinely exceed the flat allowance already built into your scale before you commit to a full tax return.

Correcting an error or contesting your withholding tax

Withholding tax is calculated from the information your employer holds about your marital status, children and income. When that information is incomplete or outdated, the deduction can be wrong, and you have specific channels to fix it depending on what went wrong.

Report any change in family situation to your employer straight away, so the scale is corrected from the following payroll month onward
Ask the cantonal tax authority for a correction of the tariff applied (tarif rectification) by 31 March of the year following the tax year, if a factual element such as a child or your marital status was not properly taken into account
File a formal objection with the cantonal tax authority within the statutory time limit indicated on the decision if you dispute the withholding tax itself, and pursue a further appeal if the objection is rejected

Working out which scale applies to your situation, whether a correction request or a full switch to ordinary taxation makes sense, and what to file with which cantonal authority can be difficult to navigate on your own. Our consultants help you make sense of your withholding tax situation as part of your relocation and settling-in support, and coordinate with qualified tax specialists for anything requiring formal advice.

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Also Worth Reading

Service Settling-In Services in Switzerland Guide Quellensteuer Switzerland: What Is Withholding Tax?

Frequently Asked Questions

Do I still pay withholding tax once I earn more than CHF 120,000 a year?

No. Once your gross annual income reaches or exceeds CHF 120,000, you move to mandatory ordinary taxation and file a full tax return like any Swiss resident. The withholding tax already deducted by your employer during the year is credited against your final tax bill, and you either receive a refund or pay an additional amount depending on your actual deductions.

Can I deduct pillar 3a contributions if I am taxed at source?

Not directly through your payslip: the withholding tax scale includes only a standard flat-rate allowance for common deductions, not your actual pillar 3a contributions. To claim them, you need to request subsequent ordinary taxation, by 31 March of the following year if your income is below the mandatory threshold, or automatically through your tax return if you already exceed it.

What happens to my withholding tax if I change canton during the year?

Your employer applies the scale of your new canton of residence from the month following your move. Cantonal tariffs differ because withholding tax funds cantonal and communal taxes as well as federal tax, so the amount withheld can change meaningfully when you relocate within Switzerland, even with no change in income or family situation.

When does withholding tax stop and ordinary taxation start permanently?

The switch to permanent ordinary taxation typically happens when you obtain a C permit, marry a Swiss citizen or C permit holder, or acquire Swiss nationality. From the tax year following that change, you file an ordinary tax return and settle your tax bill directly with the cantonal authority instead of through payroll deductions.

Who is exempt from withholding tax in Switzerland?

Swiss citizens, C permit holders, and the spouses of Swiss citizens or C permit holders are taxed under the ordinary system rather than at source, provided they are themselves resident in Switzerland. Anyone else working in Switzerland without one of these statuses is, in principle, subject to withholding tax on their Swiss employment income.

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