Hi Everyone,
With a permit C, tax planning is a bit more complicated. I want to put money aside every month in a different account to cover these taxes.
I'm trying to figure out the percentage of my income i should put aside each month to cover this and a question came up.
Are the federal, communal and cantonal taxes taken as a percentage from the gross salary or the net salary after the AHV, ALV, pension fund, insurance charges etc? Or is it a percentage of the gross amount?
Also what other ways do other people manage this?
Thanks
Taxable income is “nettolohn” from your annual income statement (“lohnausweiss”). From the gross income, you deduct the AHV etc. and contributions to the Pension Fund. AHV etc. are the same for everyone, pension fund contributions vary by company (how they set it up, what contribution employer and employee make etc.). Finally, the actual tax depends what other deductions you can apply in your place of residence.
Asking your tax office is a great option.
Alternatively, to get a good idea, you can go to the Federal Government Tax Calculator - https://swisstaxcalculator.estv.admi…ome-wealth-tax
Currently, it provides the calculations very accurately up to the 2022 tax year. Unless there has been a major change in tax law in your town/canton, it should be good enough.
You can select your post code and town, enter the values and get a very good overview, including the assumed deductions. You can also compare different scenarios (i.e., locations etc.). For me, this has worked very well.
Assuming you‘re paid a stable monthly salary you could do worse than taking the difference between the last salary payment with tax deducted at source and the first without and start saving that, perhaps round up.
There may be some incremental differences and if you get paid a bonus that distorts it a bit as well but it’s a start. Especially if a chunk of your pay is in the form of a bonus you should still find your annual salary statement to plug into the tax calculator. Then you can increase monthly savings or work out how much extra you need to save the month your bonus comes through to make sure you cover that as well.
Yeah based on this tax calculator, it looks like the percentages for the commune, canton and federal are taken from the actual gross as well, not the NET after the standard deductions
That is just how the calculator presents the results. Taxes are taken from the net income (after social security and pension deductions) minus the other deductible amounts. The calculator shows you the final percentage of taxes from the amount you provided as the starting point as that is the relevant number.
If you run a calculation on the basis of gross income, it will show the final tax as % of the gross income. If you start off net income, the % will be of that
That, however, does not correspond to the actual tax rates etc.
I like that when you run it on gross income, it shows you the amounts of deductions from gross income to net income (the default values; you can compare it to your pension deductions and adjust). From both gross and net income, you can see the other deductions at canton and federal level. These are all standard/default values based on the specific laws.
If you just assume that you will pay ~ what you are not getting withheld anymore (w.r.t. the previous years) you won't be too far off. On top of that, once you will submit your tax return next year you will know precisely how much you owe and the cantonal+communal part of that is not due until you receive the final tax bill (can be years) - so you will have enough time to set more money aside in case you underestimated.
PS: if you are setting the money aside in an account that is generating less than [0.25% + your marginal income tax rate], you probably should just send the money (to be precise the cantonal+communal part of it) to the tax office every month, since it will pay you 0.25% for this year
I just wait for the bill, and pay it - eventually.
Tom
The OP wants to EXACTLY avoid that but now the day has been saved
You can ask to pay in advance in instalments based on a provisional calculation if you are a new taxpayer.
You will have to do so in the future anyway once you have paid the first time.
It might depend on the canton, but at least in ZH this is not true. You don't have to pay cantonal and gemeinde tax before the final tax bill, the payment slips you receive are mere suggestions to pre-pay the taxes. And you can't prepay the federal tax bill anyway
Right, then it depends on the canton. In Ticino it's mandatory. Yes, not for federal tax.