Working 50% - paying tax like 100%???!!

Finance, Taxes, Banking, Insurance and Retirement
1
Hello forum.

My girlfriend and I are leaving Switzerland in the end of March, and have been working here for 1.5 year.

My girlfriend has been employed 50%, and has been taxed à la source from day 1. Her employer used a table, from where he found the percentage she should pay. The table simplified was as following:

Example from 2010:

Brutto salary: Impot à la source:

2551-2600chf pr month: 1,55% taxrate

5200-5250chf pr month: 12.88% taxrate

Since my girlfriend earned brutto 2600chf her employer withdrew 1,55% from her salary.

Now the authorities has sent a letter, saying she has to pay the taxrate for 5200chf per month (12,88%), since that would be her 100% earning.

Can this be right? Does she get taxed from the 100% salary even when she only works and earns 50%.We as well as her employer, find this very unjust...

We have of course been in contact with the authorities, and unfortunately is seems to be correct.

Are there anybody with the same experience? We imagine that this must be the right place to ask questions about Impot à la source

Hope someone can give us some more information on the subject, because we don't get it

Look forward to hear from you.

- Henrik

2
That sounds incorrect. It looks like you're pulling the 1.55% figure from this table, which is the right place to be pulling it from:

http://www.vd.ch/fileadmin/user_uplo...if_AB_2010.pdf

My suspicion is that somewhere there has been a miscommunication. Your girlfriend should be getting taxed on the basis of her regular income of CHF2'600- per month or CHF31'200- per year at the rate of 1.55%, regardless of her working hours.

The mix-up might come if the employer has worded the employment as having a salary of CHF61'400- based on full time, and your girlfriend's working hours as 50%. If that '50%' got lost somewhere in translation, the tax authority may be demanding tax withholding at the wrong rate.

I would get in touch with the tax authority (they're generally very understanding and pleasant to deal with, in my experience) and explain the situation. You should only ever pay tax on your actual earnings, not the notional full-time salary upon which it's based.

I work for a large company who I trust to get my withholding tax right. As my income goes up or down, the corresponding withholding tax is withheld at the rate shown on the table. So if I earned CHF2'600 in a month, I would absolutely expect to have tax withheld at 1.55%, not 12.8%.

3
Isn't 1.55% incredibly low?

I am a student who works about 30% (12hrs ish per week) and I (as any foreigner I guess) get taxed at the source. I have always had a tax deduction of 10% (+ social stuff of 8%) no matter the amount of hours that I've worked.

I made 8,437chf last year, got taxed at the source of 843chf according to my certificat de salaire for 2010.

I realise that I live in a different canton but the difference between 1.55% and 10% is huge. I must be mis understanding something here?

Sorry to hijack your thread slightly.

4
@Village Idiot. That sounds exactly like our situation. Have you been working at your current work for more than a year? Because my girlfriend didn't get this letter before after 15 months of work...

@Millso. You're not highjacking I'm with you - it sounds incredible low, but it's what the table dictates... And her employer doesn't seem to think it's to low... Here you have the table for Fribourg: http://www.fr.ch/scc/fr/pub/informations_generales/baremes_impots/impot_source.htm

Just choose year and marital status.

I really hope Village Idiot is right. It's weird because my girlfriends employer has already phoned the tax authorities. And they stick to the 12%. I just can't help thinking there's a mix-up... I will phone them Friday.

Anyone else with experience in this matter?

5
Cheers for digging that up for me, had a look myself and found something similar but that seems to be more comprehensive and there is even a calculator thingy.

I must be missing something as if those tables are right I should be paying next to nothing income tax. Surely such a large mistake is not possible? Do the swiss do automatic tax refunds if tax paid is too high (assuming my employer sends it all on to them) or do I need to request an audit thingy? It's all so much simpler (for me!) in Ireland.

Might contact them (if i can figure out who to contact) and ask them to explain how it works to me. That extra bit a month would make a world of difference.

EDIT: Just read an article that the maximum federal tax rate is 11.5% (2009), now obviously have to add in cantonal tax etc but still.

6
The numbers in Fribourg seems to be close to the same as in Vaud.

I'm glad you find it strange as well... I don't get it if everyone has to pay tax like they are employed 100% even though they're not.

But so far the authorities seems to think so

Then I think this table is very misguiding...

7
One way at looking at it is that if you are working 50% at one place and 50% at another you would only be paying 1.55% tax even though your global income would actually place you in the rate bracket of 12.88%.

So to be on the safe side, the tax authorities tax you at the rate of 12.88% even if you are working only 50% and let you correct the tax rate in the nachträgliche Veranlagung.

I did look around a bit on the internet and the only thing I found that would suggest this approach (albeit for Berne) is the following:

http://www.fin.be.ch/fin/de/index/st...uer_d_2010.pdf (cf. p. 16)

Which says the relevant monthly salary for determining the tax rate bracket is calculated on the basis of a full time employment, if you are hired out by a temp agency, even if your not working full time...

8
Even if I was working full time I wouldn't be getting taxed 10% (and anyway isn't 10% too nicely a rounded figure? 10% would assume that I'd earn 4,5k a month, If i worked full time I'd earn 3kish).

I'm going to write to the tax folks in fribourg and ask them to explain how it works exactly. Let's hope my french is up to it

I can sort of see the logic in that but it seems a very "dishonest" way of dealing with people. Assuming that they are going to try to swindle the state so punishing the majority for the flaws of the minority.

I assume the 12.88% tax would only be payable on the amount which is over the 1.55% range or is the entire wage/salary then taxed at 12.88%?

EDIT: Just looking at the table for Fribourg, 38k a year (which is what I would earn if I worked full time = a tax rate of 7.44%, then add federal and municipal on top then it might indeed reach 10% though I still find it a very convenient and rounded figure!)

EDIT 2: Sorry didn't see this bit, what is a nachträgliche Veranlagung? Google translate translates it to a "subsequent assessment", would we have to apply for this or is it done automatically? I still wouldn't understand in the case of Rossel however as his partner works 50% yet after speaking to them will still have to pay 100%. Surely the person who his girlfriend spoke to would have all the information infront of them and would be able to see that she only worked 50%? Wouldn't they have explained that they will take the 100% level then refund the 50% later when they are sure she had no further income. All seems a very strange way of doing it if that is indeed the way it is done.

9
I was in the similar situation and I confirm that unfortunately it works this way :-(

I worked half a year in Switzerland and they doubled my salary to get tax percentage, even if I was paid half of the salary, i paid taxes on the basis of full year salary

10
Did you speak to someone in the tax office to confirm that you can't claim it back?

11
I was taxed at source and my HR confirmed that!

12
did it mean that you were basically screwed and that you couldn't reclaim the difference? ouch.

13
But I was explained that this is the way to tax.. I was new here and it was very unlike the country i was before, where I worked for 4 months and didn't pay taxes at all because you need to be more than 183 days in the country to pay taxes...

14
If you work less than 15 hrs a week and make less than 2K CHF / month you will be automatically taxed at source according to Tarif D, which is 10% and the Tarif for 'side occupation'. If you earn so little they assume that you or your spouse has another 'main occupation' that provides the main family income (on which then less tax is paid). If this is not the case, you should ask for a correction (before the end of march of the following year). I would say that you should also ask for a correction if you are taxed 100% on a 50% income.

15
Thanks alot for this information mgosia! Is this something you know for a fact or have experience with? You seem to know what you're talking about :-)

What I don't understand, is that my girlfriends employer wasn't told this when he phoned the authorities (it was actually the boss he spoked to!!!)

We will go to the office tomorrow and ask for an answer - I will post the response in this thread. It seems we're not the only ones with this problem... :-)

Thank alot to all of you!

16
The tarif D thing I know out of my own experience - as I provide most of the family income, I am taxed as a sole provider (B) and my husband according to D. In any case, to get to this situation which is best for us tax-wise (we would be paying more tax if we were taxed both according to dual income (C)) I had to call and fax the tax office (Zurich) several times - some employees did not know their own rules...

About the 50% - 100% thing I am not sure, but it seems the most logical to me. To be on the safe side they tax you at 100% as you might have another 50% job, but they should correct the tax for the amount you actually earned if you make a simplified tax declaration at the end of the year in which you declare all your income. Yverdon is Vaud right? My French (and obviously Swiss topography ) is not very good but I think the website where you can find the necessary forms is http://www.vd.ch/fr/themes/etat-droi...n-a-la-source/

Don't forget to make your declaration before the end of march - there is another thread about this somewhere on the forum - look for 'correction quellensteuer'.

17
Sorry it took me so long, to get back to this thread with the answer

Well, in short Mgosia was right!

The authorities tax everyone as if they work 100%. BUT, your employer just need to fill out a declaration, that you're only at x-percent, and therefore just need to pay the corresponding taxrate. This can be done when you begin your work, and so the tax-office won't send you a bill.

If, you already have payed to much, just go to the tax-office and explain the situation. Your employer will have to sign the declaration regarding your working percentage, and then you will get your money back - in the end of year I suspect...

I don't know if it's only possible for the past year or how it works.

In the end, we didn't have to pay anything because we're leaving CH and therefore the tax office would speed up the process and instead of giving us our money back in the end of 2011, we didn't have to pay now.

SO, if you find that your monthly income doesn't match the list I have linked to before (not the same for each canton), then go to the tax-office. We had a very pleasant experience with the office in Lausanne - nice and helpfull people

I can't help to think it's a bit weird, that they charge you 100% just to be sure. And they actually asked my girlfriend several times, if she's really only working 50% percent - like they suspect her for doing work on the side... But anyway it's sorted now

Thanks to everyone for the help. If anyone need further explanation on this, then please don't hesitate to ask me!