Income Tax in Switzerland: How It Compares to Other Countries

Residents of Switzerland, like those of many other countries, have to pay income taxes. There are three different personal income taxes in Switzerland, which collectively make up the income tax which you have to pay. These are: Federal income tax (direct federal tax), cantonal income tax, and municipal income tax.

The figures shown here are taken from the OECD’s Taxing Wages 2022 study and are based on average wages.

Income taxes as a percentage of average gross wages for a single adult:

Families with children typically spend a smaller portion of their incomes on income taxes. This is because many countries have tax deductions which help to balance the costs of raising children.

Income taxes as a percentage of average gross wages, for a family with two children and both parents earning an income:

Social security vs. income tax

In many countries, people who earn an income are required to make obligatory contributions to one or more social security schemes. These mandatory contributions are closer-related to insurance premiums than to income taxes because you receive very specific benefits in exchange for your contributions.

However, for a fair international comparison, it is important to consider mandatory social security contributions in addition to income taxes. The reason for that is that in some countries, benefits provided by Swiss social security (like basic old-age pensions, disability insurance, accident insurance, and/or unemployment insurance) are at least partially covered by taxes.

Swiss social security contribitions are equal to 10.6 percent of income. Employees pay half (5.3 percent), with the other half being covered by their employer.

Health insurance vs. income tax

Health insurance is different from an income tax because you pay an insurance premium, and receive insurance coverage for healthcare in return. However, when health insurance is mandatory, as it is in Switzerland, then the obligatory insurance premiums are similar to an income tax or a social security contribution. They should be accounted for when comparing the full cost of mandatory payments.

It is also important to note that in some countries, basic public healthcare is covered by taxes. In other countries, premiums for basic health insurance are included in social security contributions. In Switzerland, health insurance premiums are paid separately.

The average premium for Swiss mandatory health insurance in 2023 is just over 334 Swiss francs per person and month, or 4016 francs per year. However, the effective insurance premiums may be much lower or much higher than that, as the mandatory health insurance comparison shows. Additionally, many Swiss households receive health insurance premium reductions.

Which other taxes do I have to pay in Switzerland?

As in other countries, there are many other taxes which private individuals in Switzerland pay, in addition to income taxes. These are explained in the moneyland.ch guide to taxes in Switzerland.

More on this topic:
Swiss tax deductions that can save you money
Tax deductions for expatriates working in Switzerland explained
Capital gains taxes in Switzerland explained
Unemployment insurance in Switzerland explained
Accident insurance in Switzerland explained
Disability pensions in Switzerland explained
How do Swiss credit cards compare internationally?