Withholding Tax in Switzerland: Quellensteuer Explained
Withholding tax is a monthly salary deduction applied to foreign employees in Switzerland who do not hold a Permit C (permanent residence). The employer deducts it at source and forwards it to the tax authority. Rates depend on your canton, salary, marital status, and other factors.
Who Is Subject to Withholding Tax?
All foreign employees in Switzerland without a Permit C are subject to withholding tax (Quellensteuer). This covers Permit B, L, and G (cross-border) holders, as well as asylum seekers with work authorisation. Swiss citizens and Permit C holders are assessed through the standard tax declaration process.
How Are Rates Determined?
Each canton sets its own withholding tax tariffs. Rates depend on: Canton of employment, gross salary, marital status and number of children, religious denomination, employment percentage. The employer applies the cantonal tariff and deducts the amount monthly. Federal, cantonal, and municipal taxes are consolidated into a single combined tariff.
Deductions and Adjustments
Since 1 January 2021, withholding-taxed employees with Swiss domicile can apply for a subsequent ordinary assessment (NOV – nachträgliche ordentliche Veranlagung) to claim deductions not reflected in automatic withholding (professional expenses, health insurance premiums, mortgage interest, childcare costs). Employees earning over CHF 120,000/year are automatically assessed ordinarily.
Correcting Withholding Tax Errors
If the amount deducted was too high or too low, a correction can be requested by end of March of the following year. Submit the correction request to the tax authority of your canton of domicile. Employers can also issue corrections if they detect a tariff application error.
Frequently Asked Questions
Who must pay withholding tax in Switzerland?
All foreign employees without a Permit C (permanent residence). This includes Permit B, L, and G holders, and asylum seekers with work authorisation.
Can I claim deductions on my withholding tax?
Yes, since 2021, withholding-taxed employees with Swiss domicile can apply for a subsequent ordinary assessment (NOV) to claim deductions. The deadline is end of March of the following year.
What happens when I receive a Permit C?
Upon receiving Permit C, withholding tax ceases; you transition to ordinary tax assessment like Swiss citizens, starting the following year.