Hello Everyone,
I am currently negotiating with a company to move to Zurich. My salary will be 350k CHF annually.
If I use a tax calculator, it shows the following taxes for a 350k salary. It is 78.694 CHF in total which is reasonable.
Cantonal tax 24,437 CHF
Communal tax 29,080 CHF
Personal tax 48 CHF
Direct federal tax 25,129 CHF
But it also shows the following items. They cost 34,068 CHF in total.
OASI : 18,550 CHF
Unemployment : 2,639 CHF
Non-occ. accident ins. : 593 CHF
Pension : 12,286 CHF
My question is Are these items cut from my salary?
If yes, will my net salary be 350k - 34068 - 78694 = 237,238 CHF?
If there are many cuts, what's the tax advantage here? One pays a similar tax in other European countries. I am probably missing something
Non-occ. accident ins. and Pension are just geusstimates. Specially the pension contribution can be hugely different based on your companies pension scheme.
The advantage is that you pay a lot less taxes here than in other countries. For example in Germany you can easily pay 42% on that amount of income. And then you have to add the payment for social security there as well.
What other European countries give you a tax/social security burden of 29% at that level of income? Certainly none in Western Europe. I guess it's possible in Eastern Europe, but can you get a job with that salary there and is the social security net as good as Switzerland?
The 12k pension is tax deductible and is your money. You just have to wait to get it. I'd guess that's the statutory minimum too. You may find that the company scheme is way higher.
The social security elements are fixed as is the federal tax, but the cantonal and community tax depends on where you live. Using those numbers, where I live your total tax including the federal part would be around 48k - halving the cantonal and community taxes while still being a half hour drive from Zurich city centre.
Assets! All of your worldwide liquide assets. You own it and it can be transferred over here than you gotta pay tax on it.
you are left with almost 67% in your pocket, where else can you be even close to that in Europe when speaking about an employment contract? We know that in most European countries people escape the huge taxes by doing one-man-companies, but that's a different thing.
You are confusing tax and pension/retirement and insurance.
At that level of salary, did the company give you tax assistance? Might be worth a tax briefing to explain it all in detail to you.
The gross to net is amongst the highest I have seen so you should not be disappointed.
With a relatively high income, you can probably afford to make additional contributions to the Pillar 2 and 3 pension schemes which will directly save you that amount against your marginal tax rate. Pillar 3 is restricted to just under 7k per year, but Pillar 2 is in principle unlimited. You can save 10'000s CHF tax per year if you have the cash and desire to pay additional contributions into Pillar 2 e.g. marginal tax rate 30%, contribute additional 60k CHF into pillar 2, you save 30% * 60k tax.
I've always felt it was difficult to compare sometimes with different countries. Like the tax is much lower than other countries, but usually in those countries the tax includes insurance, pension etc etc, sometimes you have an extra pension on the side from the company totally invisible on the payslip.
So when you just look at tax rate it's not fair. But I think you will find that even if you include all of those cuts from salary it will be better in Switzerland
Which is great in the short term, but generally a poor idea in the long term if you prefer to invest freely in equities, which most pension funds are restricted on. You get a nice tax saving up front, but lose longer term on investment performance.
You likely have over-estimated the tax burden. You have various deductions available to you, which will reduce your taxable income (i.e. commuting costs, costs of lunch, etc.). Also, most likely you will be paid a portion of your income as lump-sum expenses, which again do not get taxed (and are not subject to AHV, etc.).
Also, since we do not know which tax calculator you have used, it is not quite clear how it has calculated everything. In effect the deductions all get taken off before any tax applies, i.e. you only pay on the net amount.
As mentioned by others, pension is not a true deduction as you will get it back in the end (and in any event you should/could consider the amounts contributed/matched by your company).
On the other hand, to the extent that you truly want to have sight of "net available income" you might need to consider health insurance premiums (the deductions on your payroll would only cover accident insurance).
No it's about right. I ran it through the SZ tax calculator with the standard deductions I use (about 30k) as well as his SS and pension deductions and was plus/minus there on the federal tax rate.
On 350k, health insurance premiums are a bit of an irrelevance. CHF 500 per month (which would be expensive IMO) would still be less than 2% of gross income.