The second theme in the tax declaration process has to do with Einkünfte (income). Remember you were asked for sources of income in Persönliches? The boxes you ticked then will determine which forms pop up for you now. This tax declaration guide covers all possible forms. But not all might apply to you. However, you should make sure you were exhaustive and selected all your sources of income. Both domestic and foreign. If in doubt, go back.
I’d suggest to read Taxes in Switzerland 101 to know more about income taxes in Switzerland. This is not a requirement to continue, though.
Full-time job as an employee
Unselbständiger Erwerb – Haupterwerb
This is one of the most common options. According to the official guidelines, your salary is you all-in compensation. It should include regular salary, bonus, commissions, tips, share programs etc.
Did you have just one employer during the tax year? Then it’s simple. Write von (from) 01.01.20xx bis (to) 31.12.20xx. Did you have multiple employers? Then split according to your payslips.
Nettolohn and the Lohnausweis
The field Nettolohn (net salary) can be confusing. There are some caveats with how net this salary is. Why? Because it’s not really your take-home pay. According to the official guidelines, net salary is gross salary minus:
- AHV/IV contributions (pillar 1 retirement pension and disability insurance)
- ALV contributions (unemployment insurance)
- Pension plan contributions (pillar 2)
- Mandatory accident insurance
The easiest approach is to transfer the figure from the Lohnausweis (salary certificate). You should receive a Lohnausweis from your employer yearly. Sometimes it comes in late January or early February. Don’t file taxes until you have it. It’s compulsory to attach this document to your tax declaration. So you’ll have to find it anyways.
For reference, this is a sanitized version of a Lohnausweis. The red box highlights the figure you should use.
If you didn’t get a Lohnausweis, ask your company to provide it. HR or payroll people will know.
You don’t calculate your net salary (for tax purposes) yourself. Instead, you get it from the Lohnausweis. If you don’t have one, your ask your company to provide it.
Understanding the Nettolohn
It’s good for your financial literacy to understand how to calculate the Nettolohn. Let’s review a quick example. We’ll start from a payslip:
|Gross salary (Bruttolohn)||CHF 10,000|
|AHV contribution||CHF 500|
|ALV contribution||CHF 100|
|Pension fund contribution||CHF 300|
|Withholding tax (Quellensteuer)||CHF 1,100|
|Share participation plan||CHF 600|
|Net salary (Nettolohn)||CHF 7,200|
For tax purposes, Nettolohn is not CHF 7,200. Why not? Because we’d be deducting more than we should. We are not allowed to deduct the withholding tax. Or the canteen. Or the share participation plan. The figure we should use is 10,000 – 500 – 100 – 300 = CHF 9,100.
What about withholding taxes?
It’s likely that you’re taxed at source and you have to file taxes. This is the status quo if you income is over CHF 120k/year. It’s described here.
If this applies to you, you might be surprised that the Nettolohn doesn’t deduct withholding taxes. This can be confusing. Why would you pay taxes on that part of your salary, if they got deducted already? Don’t worry. The process is fair. The tax authorities will compare:
- How much you’ve paid already (withholding tax)
- How much you should pay (output of filing your taxes)
They will then debit/credit you the difference.
Part-time (or side) job as an employee
Unselbständiger Erwerb – Nebenerwerb
The tax rules for a part-time job are quite different from full-time employment. In the Betrag (amount) field, we’re supposed to take into account gross income received. But not all income. There’s no need to consider income that has been already taxed at source. In other words, no need to declare if you paid withholding taxes. You’ll have to print and attach the corresponding AHV certificate to the tax declaration.
Full- or part-time self-employment
This form is the same for all types of self-employment. Doesn’t matter if it’s full- or part-time. It’s also one of the most tedious forms. A comprehensive detailed assessment is beyond my knowledge. And also beyond what I intend this guide to be. If you’re not qualified already to complete this form by yourself, you’ll likely need an accountant to help you. Nevertheless, I’ll share my high-level understanding:
- Generally speaking, you can deduct more expenses as a self-employed than as an employee. Even more so if you’re in the real estate market. This brings down your taxable income
- Be ready to face a certain degree of double taxation. Your company will have to pay corporate taxes on net profits. Then, you’ll have to pay personal income taxes on your salary/dividends. If you choose not to give yourself a salary but to reinvest in the business, you may still pay capital gains taxes
- Income from appreciating securities or real estate is self-employment income. It’ll be taxed as capital gains. Unless you meet the conditions explained here
- By law, you must keep records of your self-employment activities for 10 years
- If you’re self employed, you declare your income using Hilfsblatt A (auxiliary sheet A). Unless your business is a farm. In this case, use sheet B or G
- There’s five sub-forms in Hilfsblatt A. (1) Basic info about your company. (2) Income and net profit. (3) Inventory. (4) Depreciation. (5) Balance sheet (assets, liabilities, equity)
AHV/IV (Swiss social security), loss-of-income insurance and allowances
Sozial- und andere Versicherungen
The form will appear if you selected any of the three following sources of income:
- Renteneinkünften der AHV/IV
AHV/IV (Swiss social security)
- Erwerbsausfallentschädigungen aus Arbeitslosenversicherung
- Kinder- und Familienzulagen, Mutterschaftentschädigung, Taggeldern
Allowances (e.g. maternity, daily allowances etc.)
Any income from AHV/IV is 100% taxable and should be included in the first box.
Similarly, you have to declare any compensation you got as loss-of-income or loss-of-earnings insurance. You’re required to attach physical proof.
In the third and final box you have to aggregate all sorts of allowances provided by your employer and not explicitly captured in your payslips. Examples are contribution to health, disability or accident insurance, maternity allowance, daily allowances, etc. In my experience, these contributions are typically listed in your payslip. So you have to do nothing. It’s worth to double-check, though.
Other sources (e.g. alimonies, employee shares etc.)
Übrige Einkünfte und Gewinne
Any sort of alimony received from a separated spouse must be declared in the first box.
Similarly, alimonies received for minors should be indicated in the second box.
The third box captures income from undistributed inheritances and company shares.
The fourth and final box is a hodgepodge. You can write here any additional income that doesn’t fit anywhere else.
Undistributed inheritances and company shares
Unverteilte Erbschaften, Geschäfts- und Korporationsanteile
This form is duplicated. It’s exactly the same as the third box in the previous section. Maybe it’s a bug. If you got any income from undistributed inheritances or corporate shares, just fill it in either form. Both seem to be linked.
Income from pensions is taxable income. The tax rate (the Prozent) ranges from 40% to 100%. You can find a comprehensive list of possible cases in the tax declaration guidelines. It’s page 13 of the guide 2019. It reads Einkünfte aus Sozial- und anderen Versicherungen, Leibrenten [Ziffer 3].
Notice that we didn’t have to declare any income from real estate (e.g. rent) or financial assets (e.g. interests/dividends). Why? Because we’ll declare such income in subsequent themes.