Tax at source in Switzerland: how it works for foreign residents
Tax at source (impôt à la source in French, Quellensteuer in German) is the default tax collection mechanism for foreign nationals without a C permit earning under CHF 120,000/year. Rather than filing an annual return, your employer deducts the estimated tax directly from your salary each month and remits it to the cantonal tax authority. The system is convenient but not always optimal: if your real deductible expenses differ significantly from the standard rate assumptions, you may overpay — and reclaiming that overpayment requires a specific process.
- Applies to: B permit, L permit holders earning under CHF 120,000/year gross.
- Does NOT apply to: C permit holders, Swiss nationals, anyone earning over CHF 120,000/year.
- Rate is set by: canton of residence, gross salary, civil status (single/married), number of dependants.
- Rates are revised annually — your employer uses the current year's cantonal tariff tables.
- Ordinary assessment (taxation ordinaire ultérieure): available on request to claim full deductions.
- Deadline to request ordinary assessment: 31 March of the year following the tax year (most cantons).
How the rate is determined
Each canton publishes annual tariff tables that specify the tax at source rate for a given monthly gross salary, civil status, and number of dependant children. The rate is a flat percentage applied to gross salary — not a marginal rate — and is designed to approximate what an ordinary taxpayer at that income level would owe. The rates are grouped into tariff codes: tariff A (single, no children), tariff B (single income married couple), tariff C (dual income married couple), tariff H (single parent with children), and several others.
Your employer is responsible for applying the correct code and rate. When your situation changes (marriage, birth of a child, spouse takes up employment), you must notify your employer's payroll department to update your code — underpayments or overpayments from an incorrect code are your responsibility to correct. If you discover your employer has applied the wrong tariff code, request a correction and a retroactive adjustment — this is common and the process is straightforward.
The CHF 120,000 threshold
Once your gross annual income (including the 13th month, bonuses, and all taxable benefits) exceeds CHF 120,000, you automatically exit the tax at source regime and enter ordinary taxation — regardless of your permit type. From January of the following year, you will receive an ordinary tax return to complete. This means: no more monthly deductions from salary, but a larger annual tax bill due after filing. Many professionals crossing this threshold are surprised by the change — budget for the lump-sum tax payment in the first ordinary assessment year.
When to request an ordinary assessment
Even if your income stays below CHF 120,000 and you remain in the at-source regime, you can voluntarily request an ordinary assessment (taxation ordinaire ultérieure) to claim deductions that the standard rate does not account for. This is beneficial if you have: Pillar 3a contributions (up to CHF 7,258 deductible); significant professional expenses above the standard flat-rate deduction; mortgage interest payments; LPP buy-in contributions; childcare costs; or charitable donations.
The deadline is typically 31 March of the year following the tax year. The request is irrevocable — if you request it, you will be assessed under ordinary taxation for that year even if the result is less favourable than the at-source rate would have been. Before requesting, calculate whether your actual deductions exceed the standard allowances built into the at-source rate. In practice, a full Pillar 3a contribution plus modest professional expenses almost always tips the balance in favour of requesting the assessment.
Changing jobs or cantons mid-year
If you change canton mid-year, the tax at source rate changes from the month following your move. Your new employer applies the rate of your new canton of residence. The two partial-year assessments are typically handled by the respective cantonal tax authorities at year-end. If you change employer within the same canton, your new employer simply picks up where the previous one left off with the same tariff code.
Frequently asked questions
My employer deducted too much tax at source — how do I get a refund?
Request an ordinary assessment (taxation ordinaire ultérieure) by 31 March of the following year. Alternatively, if the error is a simple tariff code mistake, ask your employer to correct it retroactively — they can adjust payroll for the current year. For prior years, the ordinary assessment is the only route to a refund.
Does tax at source cover all my Swiss tax obligations?
For income below CHF 120,000 without additional deductions to claim: yes. Tax at source is designed as a final settlement — you owe nothing further and file no return. However, wealth tax (impôt sur la fortune) on assets above cantonal thresholds is a separate obligation not covered by the at-source regime. If you have significant investment portfolios, foreign bank accounts, or real estate, check whether a supplementary return is required in your canton.
My spouse works in another canton — how is tax at source applied?
For dual-income married couples, both spouses are taxed at source independently under tariff C (dual income married). Each employer deducts based on the canton of residence and respective salary. The combined household income is used to determine the applicable tariff rate in some cantons. If the combined income approaches CHF 120,000, monitor this carefully — crossing the threshold makes both spouses subject to ordinary taxation even if individual salaries are below the limit in some cantons.