Do you have a job in Switzerland and are happy with your gross salary? But if you look at your pay slip, you'll end up with significantly less net. This is due to the mandatory wage deductions that finance social security systems and pension benefits. In this article, I'll explain exactly what is deducted from your gross salary and why these deductions are so important.
What is the difference between gross and net?
Simply put:
Gross = Brutally much
Net = Net so much
The gross wage is the salary that your employer contractually guarantees you. The net wage is what actually ends up in your account after all deductions. But don't worry, the deductions are not "lost". They finance important benefits such as your retirement provision or insurance in the event of illness or unemployment.
What deductions are there in Switzerland?
1. Social insurance: AHV/IV/EO
Old-age and survivors’ insurance (AHV): Secures your basic care in old age and that of your survivors.
Disability insurance (IV): Supports you if you are unable to work due to disability.
Earnings Replacement Scheme (EO): Covers loss of income due to military service, maternity, paternity or civilian service.
💡 Contribution: 10.6% of gross wages (split equally between employer and employee, i.e. you pay 5.3%).
2. Unemployment Insurance (ALV)
Protects you against loss of income in the event of unemployment.
💡 Contribution: 2.2% up to an annual salary of CHF 148,200 (1.1% employee contribution).
3. Pension Fund (BVG)
Occupational pension provision supplements AHV/IV and secures your usual standard of living in old age.
💡 Contribution: Depending on age and income, between 7% and 18% of the insured salary (again split in half).
4. Accident insurance
Occupational accident insurance (BU): Paid by the employer.
Non-occupational accident insurance (NBU): Covers accidents during leisure time; the costs are often borne by the employee.
5. Withholding tax
As an expat in Switzerland, you are subject to withholding tax, which your employer deducts directly from your salary. The amount depends on your canton of residence, income, marital status and religious affiliation.
Example: Your gross salary in detail
Imagine you earn CHF 6,000 gross per month. How are the deductions calculated?
Deduction | percentage | Amount |
AHV/IV/EO | 5.3% | CHF 318 |
ALV | 1.1% | CHF 66 |
pension fund (BVG) | 5.2% | CHF 314.10 |
NBU | 1.4% | CHF 86.40 |
withholding tax | 10.8% | CHF 648 |
Total deductions: CHF 1,459.50
Net wage: CHF 6,000 - CHF 1,459.50 = CHF 4,540.50
Calculate your net salary with your specific information directly here:
Why are these deductions important?
Even if it seems painful at first glance, these deductions contribute to your financial security:
AHV/IV: Your basic care in old age or in the event of disability is secured.
Pension fund: This enables you to maintain your usual standard of living even in old age.
Accident insurance: You are covered both at work and in your free time.
Withholding tax: Saves you as an expat the trouble of having to pay taxes yourself.
What you can do with this information
Plan your net salary: Use gross-net calculators like lohncomputer.ch to calculate your net salary.
Budget wisely: Your net salary helps you create a realistic budget for rent, insurance and leisure.
Get informed: Learn how the social security systems work in Switzerland – this will give you a better understanding of your contribution.
Conclusion: Gross is a lot, net is not so much – but it makes sense!
The wage deductions in Switzerland may seem high at first glance, but they finance services that will benefit you in the long term. If you understand these deductions, you can better plan your income and use it to your advantage.
📩 Do you have any questions? We address exactly these kinds of topics in our workshops. Register and find out how you can confidently manage your finances in Switzerland! 🌟
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