Postdoc tax question

Finance, Taxes, Banking, Insurance and Retirement
1
Hi Everyone,

I'm a UK citizen and I've been offered a postdoc position at a Swiss university. Having received a breakdown of my proposed salary I noticed that I'm expected to pay income tax and impôts à la source (withholding tax?). This takes the overall deductions to around 28%. Would you say this is about right?

Can someone explain to me what the impôts à la source is and if it's levied only on overseas workers?

Thanks.

2
Hi,

I'm in a similar position and also due to start a postdoc soon (as soon as i get this damn thesis submitted ).

https://entry4.credit-suisse.ch/csfs...lator/p/d/calc

Try the above link, it should help you estimate the amount of tax you will have to pay. I'm not sure about impots a la source (witholding tax) maybe this may help

http://switzerland.isyours.com/e/faq...lding-tax.html

owl

3
Cheers for the links Owl,

I'm in the same boat as you with respect to the thesis - it seems never ending!

The impôts à la source thing is a bit confusing. I think it has something to do with the type of work permit you have, as well. I only asked because the gross pay they are offering me is better than an equivalent position in the UK, but after the deductions, and added costs like compulsory medical insurance, it's not so attractive.

4
Hello,

In Switzerland there are officially two systems for the payment of income tax. "Impôts à la source" is one of those methods, basically taxed at source. You will probably find more in this forum if you look up the German equivalent Quellensteuer. Dependent on whether your income is in excess of SFr. 120K or whether you own property you will be obliged to fill in a tax return. If neither of the above reflects your situation then you will be only taxed through the impôts à la source. Note there are other deductions you will be liable to pay that when summed reach around 10% of your income plus potentially pension contributions.

The total deductions will be more or less as follows:

Tax dependent on salary but lets say 12% - It is three tier State, canton, community but you should not see this, just one bill!

State Pension 5.05%

Unemployment insurance ca ~2%

Accident Insurance ca ~2%

Which gives you a grand total of around 21-22%. On top of that you need to add in around CHF 200 per month for medical insurance and up to 7% for private pension contributions dependent on your age. Note here you will get back your pension contributions eventually...

5
[Edit: I didn't see Richard's response before posting this, so some of this info is redundant with his]

I'm currently doing a postdoc in Switzerland, so I might be able to help (I got the thesis out of the way close to 2 years ago now ). I was also unsure at the beginning exactly what I would receive and what would be deducted from my pay-cheque, but here is the breakdown as it eventually panned out:

The exact deductions that you pay depend on the canton and even the precise commune (town/village) where you live. I live in Lausanne, in canton Vaud. In total, I receive about 75% of my stated salary each month. The rest goes to taxes (about 11%), unemployment and accident insurance (1% each), old-age & survivors insurance (5%), and pension (8%). The contributions to the last two are matched by your employer, but I'm not sure what the old-age & survivors insurance is all about (in French, it's called "assurance vieillesse et survivants", or AVS) [edit: Richard's response seems to clarify that this is the state-run pension, whereas the other 8% is the private pension. In addition, I also now realize that the 8% for the private pension is only computed on the amount left after the other deductions have been made, so it is actually less than 7% of the full salary before deductions - thanks Richard]

Because you'll have a B-permit and will not be earning a huge amount of money, your tax will be deducted at source ("impôts à la source"), meaning that your employer pays it straight out of your pay-cheque; you do not have the option of keeping the money and then figuring out how much to pay the government at the end of the year. This is not a different or special kind of tax, it just refers to the way that you pay your tax.

You are correct in trying to factor in the compulsory health insurance with your other deductions, even though you pay for health insurance independently. The cost can vary considerably depending mainly on three factors: your age, where you live, and how big of a deductible you want. Apparently, canton Vaud is one of the most expensive for health insurance (I have no idea why), but I am 30 years old and have the biggest deductible possible (2500 CHF), and so it costs me about 220 CHF per month. In other cantons, I believe this could be 30% less. The deductible ("franchise" in French) refers to the amount that you have to pay for by yourself during the calendar year before the health insurance company starts to pay the bills. You can set this as low as 300 CHF, but then you'll pay at least twice as much per month for the insurance.

As far as I'm aware, academics are a lot better paid here than they are in the UK, but your situation may be different. All I know is that you can live a pretty comfortable life as a post-doc here. The pay is certainly WAY better than it is for the equivalent position in Canada (where I did my PhD) even after adjusting for the cost of living.

6
Thank you Richard and ChrisW for your helpful posts, it's much appreciated.

I will also be living and working in Lausanne so I guess my situation is similar to yours ChrisW.

I just checked my provisional contract and the salary conditions. The deductions breakdown as you both describe, except I seem to have to make income tax and Impôts à la source contributions:

AVS 5.05%

Unemployment insurance 1%

Income tax 6.75%

Impôts à la source 14.6%

-------------------------

Total = 27.4%

Since my expected salary will be less than CHF120k and I do not own property, am I right in thinking I should only pay through impôts à la source?

Please excuse my stupidity if I'm being dense, I think my brain is fried from too much thesis writing!

With regard to academic salaries in the UK. Up until last year (I think that's when they changed the pay scales) starting postdocs were paid a pittance (~£18-20k), but the situation has improved slightly with some institutions now offering £26k+. But either way, I'm really looking forward to starting in Switzerland and would never pass up the opportunity for monetary reasons.

Finally, when I visited Lausanne in September I didnt notice it being any more expensive than the UK.

Cheers.

7
I was also surprised to not find the cost of living to be that much greater here than I was used to. However, I have heard that Lausanne is the cheapest city to live in in Switzerland. Will you be working at the University of Lausanne (UniL) or EPFL? It makes a big difference in terms of salary, benefits, amount of support, etc., with EPFL having far more money to play with than UniL.

I agree, there are many great reasons to live here other than monetary ones. You should have a lot of fun.

Sorry, I don't have any idea why "income tax" and "impôts à la source" were listed separately for you, this seems quite strange. Hopefully Richard can give you an answer, he can normally answer most questions of this nature.

8
I'm just about to start a post-doc (biology) at UNIL too, so thanks for the info.

Where are you folks working?

Cheers, Sam.

9
Maybe this helps - until December I was a post-doc at ETH Zürich, here is what my last Pay slip has:

Montly Gross - 6500 Fr

SUVA (accident insurance) - 0.7466% = 48.55Fr

AHV (Old Age) - 5.05% = 328.25Fr

ALV (unemployment) - 1% = 65Fr

ETH Pension = 307.15Fr

Net - 5751.05 Fr

Witholding Tax - 8.09% = 525.85

Take home - 5225.20 Fr

Have to pay ~200Fr/mt for health insurance as others mentioned on top of that...

Andrew

10
My wife works at EPFL, and I'm at UniL. The figures given by Andrew are very similar to mine, except that tax here should be about 11% instead of the 8% that he was paying in Zurich. I'm surprised that ukscientist was quoted a rate of 14.6%.

11
Thanks for the latest contributions everyone.

I will be starting at EPFL in March if everything goes to plan.

12
Apart from I cannot answer this one! I can only assume seeing as you have not mentioned it that the "income tax" 6.75% is actually pension contributions. The tax at source contribution is the impôts à la source and there cannot (TTBOMK) be any further tax on income that you pay. Note here that if you are over 25 then 2nd pillar (company) pension contributions are obligatory. Under 25 you make no capital contributions only risk contributions ie insurance against death.

13
I think you must be right Richard because I'm over 25 and there's no other contribution of the right size to be a company pension. Cheers for all the help everybody!

14
Hi all,

just thought I should chime in as well - this makes for interesting reading, especially since I've recently received some impenetrable document (Certificat Personel) on taxes (at least I think that's what it is) from an organisation called PUBLICA. I am 26 and seem to have 30% of my salary removed as tax. Interestingly there appears to be no breakdown of this tax on this form, and as I got my first pay last week, so far I have no pay slip from EPFL to look at.

And hi, ukscientist and SamC - I am new to Lausanne also, having been here just under three weeks. I'm working at EPFL as a postdoc, in the Faculté des Sciences Bases. I've only just finished my thesis (defended it the day before my flight here), and I'm still not free - I need to make the last revisions to it before I can finally get the PhD conferred. I've found there's a lot to do when you arrive here, and I was surprised not to have much help from EPFL about knowing what to do. When you've arrived here hopefully we could all meet up and I can offer some help with making a list of the forms you need to fill in, and - also important - which order they need to be done in.

15
Great idea!

Thanks

16
If any of you here are Marie Curie Fellows, please post, as the tax story is a bit different then as I will then explain if you are interested.

17
MrWhereItsAt - one thing that happends at ETH (don't know if they are as troublesome in Lausanne) is that you can't get officially paid as a post-doc until you get your PhD - the actual paper confirmation of your degree, until then they put you as a 'research scientist' or such and fiddle with the money to make it legal, but might end up getting less salary until you get them the paper.

When I got here they wouldn't let me be a PhD student yet since I didn't have my actual diploma, like the one with the stamp and all - as in the one they hand to you at graduation, normally about 9-12 months after you actually finish! My letter from my old school that said "MSc conferred *pending aproval of the university senate*" wasn't exactly comforting to them either...Try telling them thats a formality...Argggg...

Andrew

18
Anyone else find that they're on 3/4 hours as a new postdoc, or am I just unlucky?

Alao, is anyone else at the University of Berne?

19
You mean you are at 75 percent? That sounds strange. I am at Bern, which department are you in? If you need clarification on how your salary is taxed pm me.

20
PM'd you. They gave me a tax break-down and seemed to make sense. Huge relief when they told me the canton and community taxes were included in the at-source deductions...