Taxes and social security contribution deductions

In Geneva, no income taxes are withheld from the salaries of Swiss nationals and employees holding a settlement permit (“C” permit).

However, foreign national holders of a temporary residence permit (“B” permit) or a short-term residence permit (“L” permit), who are not married to or did not enter into a registered partnership with a Swiss national or a holder of a “C” permit, as well as employees domiciled in neighbouring France, whatever their nationality, are in principle taxed at source, which means that the employer has to withhold the taxes from employee’s salary at rates set forth by the Cantonal Tax Administration.

In some cases, for instance employees who personally own a property in Geneva, and upon decision of the Cantonal Tax Administration, the source tax regulation does not apply.

As a particular application of the law, if an employee’s salary exceeds a certain threshold (currently CHF 500’000.- per year), the employee, additionally, has to submit a regular tax declaration and will be taxed individually, whereby the withheld tax at source will be taken into account.

The Swiss social security system is made up of various social insurances, welfare assistance and provisions for the future (pension schemes). Almost every employee must contribute to compulsory social insurances, i.e. old age and survivor’s pension scheme (AVS), disability insurance (AI), insurance against loss of earnings (APG), occupational pension scheme (LPP), unemployment insurance (AC), accident insurance (AA) and maternity insurance (AM).

The contributions are split equally between the employer and the employee, and the employees’ part is withheld from their salaries.

Affiliation to a health insurance company (LAMal) is also compulsory for residents of Switzerland, but premiums are to be taken in charge exclusively by the employees, although some employers may participate in the costs on a voluntary basis.

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This website aims to provide general information regarding Swiss law and should not be regarded as a legal opinion. For more specific advice, do not hesitate to contact us.