page 39 “Tarif C” for a married couple both working

page 31 “Taric B” for a married couple with one working
I see that if my wife starts to work for 10%, I will pay suddenly a very high tax because I moved from scale B to C.
Looking at https://swisstaxcalculator.estv.admi…ome-wealth-tax , I see that I have only to pay 1000 to 2000 more if my wife starts to work 10%. Also, reading on the internet about the marriage penalty in Switzerland. The penalty seems to only affect couples who both have high incomes (100 each let’s say in Vaud).
Now, the problem is that looking back to https://www.vd.ch/fileadmin/user_upl…yeurs_2023.pdf , I see if my wife starts to work, then migrating from scale B to C will happen and I will pay 5 to 7% more tax. (This amount of tax essentially means that my wife should only go to work when she is ready to take a 100% load job, otherwise nearly half of her earnings will be paid as tax).
Where does the discrepancy between the tax calculator, online readings, and this official document come from?

First of all, when both are working then the rate C is applied to each salary (person) separately, they are not added. So your calculation C is wrong.

Secondly, the online calculator is for ordinary taxation which has nothing to do with tax at source.

If you both start working, then on your 85k salary you will have to pay a higher percentage tax (moving from scale B to scale C as you correctly mention), but your wife with 12k (or even 24k for that matter) will pay nothing, as it is at the 0% rate. Basically there is a re-distribution of tax between you and your wife, but you will not be worse off.

Also comparing 85k single with 85k+12k couple is misleading, of course the taxes on the second would be higher; to see the 'marriage penalty' issue you need to to compare 97k single versus 85k+12k couple.

Still, as you figured the marginal tax rates are quite steep, not half as you say but can get to 33-40%. So yes, the addition of 12k will mean that 1/3 or more is lost in tax (making your wife questioning whether she ought to work or not), but this is also the case if your earnings (as a single earner) grow by 12k per year.

How is ordinary taxation different from tax at source? I can report to them and ask for revision.

Why is there such a law when couples can stay together without getting married? Is there any good reason for people to get married? I see them still around!

There are reports every so often oc couples that get divorced, but stay together, solely for tax reasons. But it isn’t something to take lightly as it has other implications. Inheritance, for example.

You can request the ordinary tax papers and then you are subject to ordinary taxation (Taxation ordinaire ultérieure TOU). Be aware that there is no way back. https://www.vd.ch/themes/etat-droit-…urce-sourciers

I see at https://www.expattax.ch/resources/In…%20earners.pdf that this is the case when we are both taxed in the source.
If we go for ordinary, it will be added, meaning that the tax percentage will be extracted from the table by looking at the combined value of salaries.
Am I right?
If this is the case, better to stay with taxed at the source! No matter what the scale or who is working.

If I do, this is per year, yes? Next year will be taxed at the source again until we meet the requirements of the ordinary tax declaration. Am I correct?

As long as you don't have permanent residence or a local passport, you'll will be taxed at source.

In addition to that, you can ask for an ordinary tax assessment (there won't be way back - if you do it once, it becomes obligatory for all following years). Once it is checked, either some already paid taxes will be refunded or you'll get an additional bill if you underpaid.

Once you do it you will do it forever. But as long as you are on permit B tax at source will be deducted as a collateral/advance payment.

Note that regular taxation uses actual deduction, tax at source implied deductions. Also the regular tax rate depends on your commune of residence, tax at source uses a cantonal average. Do not cry if you have to pay more tax when you switch to regular tax. You have bee warned.

Thanks for the information IFL and aSwissInTheUS.
I see that the tax table is different for tax at source and ordinary tax. For ordinary tax in Vaud for example, you can find it here for 2023: https://www.vd.ch/fileadmin/user_upl…evenu_2023.pdf
Now I have another question. If I ask for ordinary taxation, which table will be used (Barèmes et instructions concernant l’imposition à la source or Barème de l’impôt sur le revenu 2023? This seems a stupid question, but I prefer to be sure rather than be surprised further.
But in the case of “Barème de l’impôt sur le revenu 2023”, how the tax is calculated for singles and married? There are no separate scales as far as I see.

The ordinary taxation calculation applies for those with a C permit or Swiss and is based on an annual tax return. In vaud at least, it is based on steep income tax percentages but at the same time being able to claim a lot of deductions (as an extreme but not far off reality example, you 'remove' half your income via deductions, then the remaining taxed at ~40%, ending with a 20% effective tax rate, but 40% marginal rate). If you are a couple, they add the two incomes together, run their calculations, and send one bill per household, leaving you to split it amongst yourselves. The calculation includes a wealth tax calculation (perhaps around 0.3% of your total wealth per year). The taxation also varies according to the town you live in.

For those with a B permit, the employer keeps the tax at source. The calculation depends on the canton but not on the town. The tax rates are lower, but cannot claim most deductions (they are deemed to be included in the rates). So it can be a lot cheaper, the same, or a lot more expensive than ordinary taxation:it depends on what deductions you can claim (apply to you) and the town you live in. It used to be that if you earn more than 120k or have some other elements eg property in CH, you must use ordinary taxation (they send you the form). Now anyone can ask for ordinary taxation if you wish. But if you ask for it, you must use it for the future years (not that many years in the end, as when you get the C permit you would use it anyway). The employer still collects the tax at source, but they carry out the ordinary tax calculation in the end, which will result in a refund, or a bill.

So you cannot compare the two systems, as the taxable incomes are very different in the two cases. Of course, the calculator would say plug in your taxable income and I will calculate the ordinary tax, but calculating the taxable income is complex with all these possible deductions worth several 10,000. There is where a good accountants help : advising what deductions to claim. PS: Any calculator that uses the town you live in will relate to ordinary taxation.

Two people who work 100% and earn similar salaries, tend to be worse off if they marry and fill in one tax return, compared to being single and filing seperate tax returns ("marriage penalty") under the ordinary tax system. On the other hand, couples where one person works 100% and the other very little (big imbalance in salaries, as was often the case decades ago) will pay less tax if married and filing one tax form together. This may change in the future, there are plans in the way to move to a direction where couples can choose to submit individual tax returns if they wish.

The tax rates you see there : 1. are for a single person, 2. you need to multiply the tax amount by by 1.55 to get correct figure for 2023, 3. only relate to cantonal tax.
There is also communal (town) tax, federal tax, which has a seperate income calculation, as well as wealth tax, so need these 4 elements together to calculate the tax.

To answer your question abut the scales when married : for a couple (without children), you add the two incomes together, then divide by 1.8 and use the tables to find the tax rate (%), then multiply that with the joint income.

You will save yourself a lot of effort if you use their tax calculator (assuming you know how to convert your salary to your taxable income), or see an accountant to run the numbers for you… https://www.vd.ch/themes/etat-droit-…ler-mes-impots

If I am not mistaken, for married couples you divide the resulting net income, after all deductions, by 1.8. This gives you the base tax rate which you apply on the non divided income. For singles it is as it is. See page 47 in the Canton Vaud Instruction: https://www.vd.ch/fileadmin/user_upl…21001_2023.pdf

You then have to multiply the tax rate with the cantons coefficient plus the communes coefficient . Example for 2023 the canton coefficient is 155%, and for Lausanne it is 78.5% => Resulting multiplier 2.335. Now you know how much canton and communes tax you will pay.

If you do all correctly you should get the same numbers as you got from the tax calculator from the federation . Remember, the tax calculator assumes some standard deductions. Your actual deduction can be higher or lower. For the actual full picture you will have to download the VaudTax software and start to fill in the forms: https://www.vd.ch/themes/etat-droit-…dimpot/vaudtax