Switzerland is the land of Swiss watches, chocolates, and cheese and a high quality of living, attracting many expats every year. Around 25% of the population are foreign with British, Italians and Germans topping the list of nationalities moving into Switzerland either to work or for their spouses’ career.
If you’re moving to Switzerland for work, the most popular cities are Zurich, located in central Switzerland and is Europe’s financial powerhouse. Roughly 10% of expats coming into Switzerland choose this city to become their home. Another city, Geneva, is known as the ‘Peace Capital’ because this is the home of the International Red Cross and where the second largest base of the United Nations is located. Basel is also a city popular with expats. This city is not only a financial hub, it also houses the country’s pharmaceutical and chemical industries.
One of the reasons Switzerland has become a top choice for expats is the high income and lower tax rates. In a study conducted by Expat Insider, 57% of the respondents reported an annual gross household income over $100,000 USD (approx. £77,580) with 14% reported they were earning $200,000 USD (approx. £155,000) or more on gross annual income at their disposal.
While tax rates are lower they do vary, so it’s worth investigating the rate you’ll be paying. Federal income tax has varied between 1% and a maximum of 11.5%. Single or dual-income couples without children are taxed at a higher rate compared with single parents or single-income married couples with children.
Along with federal income tax, you will have to pay cantonal and municipal taxes. They are calculated separately and each of Switzerland’s’ 26 cantons are different. Relatively lower income tax cantons are Obwalden, Schwyz, Zug, Uri, Appenzell Innerrhoden and Nidwalden. The highest reported income tax rate in one of these was around 17%. Cantons with higher income tax rates are Basel-Landschaft, Vaud, Bern, Geneva and Zurich, with the highest tax rate around 30%.
The total personal income tax rate in Switzerland will not exceed 40%.
One of the main reasons for expats to relocate to Switzerland is for work and the quality of life. Salaries are typically higher in Geneva, Zurich and Basel, but before relocating you’ll want to ensure you’ve researched the tax payable in that particular canton.
How would You Know Your Monthly Gross Salary as an Expat? If you haven’t already agreed a salary with your employer it would be worth using the Swiss statistical wage calculator - The Salarium prior to moving to Switzerland.
The Salarium is a payroll calculator and can provide the average monthly gross salary and the wage of an individual for a specific job and individual characteristic. The results are distributed by gender and nationality, but it should not, however, be treated as a wage recommendation.
With Switzerland fast becoming a prime expat destination, ensure you get assistance from a moving service provider, who can take a lot of stress out of relocating.