Cross-Border Workers in Switzerland: A Financial Guide

If you are (or want to be) one of the approximately 340,000 cross-border workers who work in Switzerland but live in neighboring countries, you face some unique challenges. From opening a bank account to claiming tax deductions, everything is just a bit more complicated for G permit holders. Here, we answer the most important questions.

1. Health insurance

If you live in France, Germany, Austria or Italy, you can choose whether you want to be insured in your country of residence or in Switzerland. If you prefer to be insured in your country of residence, you have 3 months from the time you receive your G permit to submit an exemption request to the relevant cantonal office. If you live in France, your exemption request must be signed by the Caisse primaire d'assurance-maladie (CPAM) in France before being submitted. If you are not a citizen of an EFTA or EU country but qualify for a G permit, you have the right (but not the obligation) to obtain compulsory Swiss health insurance within your first 3 months as a permit holder. It is worth comparing the coverage provided by Swiss compulsory health insurance with that provided by your existing insurance before making your decision. If you are a citizen of an EFTA or EU country and live in a non-neighboring EFTA or EU member country, you have to get insured in Switzerland rather than your country of residence. The above rules apply not only to you, but to your unemployed dependents as well.

If you live in an EU or EFTA country and you get insured in Switzerland, you must obtain an E106 form from your Swiss health insurance provider and submit this to an insurance company in your country of residence. Once this has been completed, you can get medical treatment both in your country of residence and in Switzerland. When you get treatment in the country you live in, you must submit claims to your local health insurance provider (which gets reimbursed by your Swiss health insurance company). Claims for treatment in Switzerland can be submitted directly to your Swiss insurance company. In this way, you have an advantage over residents of Switzerland, who can only get treated outside Switzerland in the case of medical emergencies.

Although the coverage you get from compulsory Swiss health insurance is dictated by law, premiums vary broadly. Always make sure to compare compulsory health insurance premiums to find the best deal.

2. Health insurance premium reductions

If your household income is relatively low, you may be entitled to health insurance premium reductions. This is true even when you do not live in Switzerland. Subsidies are paid out by the canton in which you are employed. In many cantons you have to actively claim premium reductions, and doing this promptly can save you a lot of money.

3. Bank accounts

Many Swiss employers expect you to have a bank account in Switzerland into which they can pay your salary. The guide to Swiss bank accounts for cross-border workers explains which banks are favorable. Many Swiss banks open accounts for cross-border workers, but most charge extra non-resident fees. There are banks which do not charge non-resident fees for residents of specific countries. You can find a comparison of non-resident fees here. Another point to consider is currency exchange. Peer-to-peer money transfer services and specialized currency brokers provide alternatives to banks for changing money. You can use the interactive private account comparison to compare Swiss bank accounts based on the number of international transfers you make. If you plan to hold savings in Switzerland, you can use the interactive savings account comparison to compare interest rates.

4. Accident insurance

If your sole workplace is in Switzerland, your employer has to take out occupational accident insurance which covers you in your workplace. If you work more than 8 hours per week, your employer automatically takes out non-occupational accident insurance which covers you outside your workplace from their accident insurance provider. As a cross-border worker, you can choose to receive treatment in Switzerland or in your country of residence. The benefits are explained in the guide to Swiss accident insurance.

5. Unemployment insurance

As a general rule, only residents of Switzerland are entitled to Swiss unemployment benefits. If you lose your job in Switzerland, you have to claim benefits from the unemployment office of your country of residence. You must obtain a PD U1 form from the Swiss unemployment office and an international employment certificate from your former Swiss employer. These must be completed and submitted to the employment office in your country along with salary slips or annual salary statements. The period over which you worked in Switzerland and contributed to Swiss unemployment insurance counts towards your unemployment benefits in your country of residence. If you were employed in an EU or EFTA country before becoming employed in Switzerland, the period over which you were employed counts towards the eligibility requirement.

You are subject to the limitations for unemployment benefits in your country of residence. This means the benefits you receive can be (much) lower than what you would receive if you could claim Swiss unemployment benefits directly. There are exceptions. As resident of an EFTA/EU country, you can claim Swiss unemployment benefits directly if: you are only employed short-term; you lose your job due to your employer going bankrupt; bad weather prevents you from working.

6. Old Age and Survivors Insurance (OASI)

If you work in Switzerland you have to participate in the Swiss OASI scheme. This is a basic social security pension. You become entitled to claim a pension from the OASI at retirement age once you have contributed for at least 12 months. Your pension is based on your Swiss salary and the length of time over which you are employed in Switzerland.

7. Pension fund

If your Swiss employment contract is longer than 3 months and your salary is higher than 22,050 Swiss francs per year, your employer has to subscribe you to their occupational pension fund. What happens to your benefits when you stop being employed in Switzerland depends on which country you reside in. If you live in an EU or EFTA country, you can only withdraw your additional voluntary benefits (pillar 2b). The compulsory benefits (pillar 2a) must be transferred to a vested benefits account or a vested benefits fund or life insurance policy. If you live anywhere else, you can withdraw your benefits in full. If you work in Switzerland until you reach your pension fund's retirement age, you can receive a lifelong pension.

8. Private retirement savings

If you work in Switzerland and contribute to the OASI, you can use Swiss pillar 3a savings accounts or retirement funds to save for retirement. However, depending on your country of residence, there may be no tax benefit to using the pillar 3a. If you live in Germany, you cannot deduct pillar 3a contributions from your taxable income. If you live in Austria, you can claim pillar 3a deductions along with other tax deductions using the “application for re-assessment of the withholding tax” form provided by the Swiss tax office and get tax refunds on your Swiss withholding tax. If you reside in France but hold quasi-resident status in the Canton of Geneva, you can claim Swiss withholding tax refunds for pillar 3a contributions.

9. Disability Insurance (DI)

A 3-year qualification period applies to Swiss social disability insurance (DI). That means you have to work in Switzerland and participate in the DI scheme for at least 3 years before you become disabled in order to claim benefits. But an exception applies to Swiss citizens and nationals of EU or EFTA countries who have contributed to social disability insurance in an EU or EFTA country immediately prior to becoming employed in Switzerland. After just one year of contributing to the Swiss DI scheme, the time over which you paid contributions in an EU or EFTA country is credited to the 3-year qualification period. You can learn more about disability pensions in Switzerland here.

10. Maternity and paternity leave insurance (MSE/VSE)

As a cross-border worker, you are entitled to paid maternity or paternity leave if:

• You have been registered with the OASI for the nine months leading up to the claim.
• You have been employed for at least five of those nine months.

An exception applies to Swiss and to citizens of EU and EFTA countries: If you participated in an EU or EFTA social security scheme before registering with the OASI, the time which you were registered with the foreign scheme counts towards the Swiss qualification period. 

11. Child benefits

If you work in Switzerland, you are entitled to child benefits as long as your kids live in an EFTA or EU country. You get these via your Swiss employer along with your salary. However, if your spouse/partner works in your family’s country of residence, you must claim child benefits there and are not entitled to Swiss child benefits. If you receive child benefits in your country of residence and these are lower than Swiss child benefits, you can receive the difference from your Swiss family allowances scheme.

12. Loans

As a general rule, Swiss lenders do not give loans to non-residents. But there are lenders which make exceptions for cross-border workers. You can easily find loans for which you may be eligible by selecting “Permit G” under “Residence Permit” in the unbiased interactive personal loan comparison.

13. Buying property and mortgages

As a cross-border worker (G permit) you are allowed to buy a secondary residence in the near vicinity of your Swiss employer. You do not need to apply for a special permit for properties under 1000 m². However, you are not allowed to rent out the property or to let out rooms.

Most Swiss mortgage offers are not available to cross-border workers. Some banks accept mortgages from non-residents if the property being mortgaged is in Switzerland. A handful of Swiss banks accept mortgages on properties in neighboring countries if you earn your income in Switzerland. Major Swiss banks which offer mortgages for foreign properties include:

• Bank Cler (properties in Southwestern Germany).
• The Schaffhauser Kantonalbank (in municipalities bordering Schaffhausen).
• Crédit Agricole Next Bank (secondary residences in France).

Note: Mortgage rules for foreign properties differ from Swiss mortgage rules.

You can withdraw Swiss pension fund and pillar 3a assets to buy a primary residence outside of Switzerland. The withdrawal rules are identical to those for purchases of Swiss properties.

14. Taxes

As a cross-border worker, you normally pay Swiss taxes automatically, with your Swiss employer deducting a withholding tax from your salary. Switzerland has double-taxation agreements with a number of countries by which the Swiss withholding tax is deducted from your tax liability in your country of residence. Typically, you need to provide your country’s tax office with your Swiss salary statements as these serve as proof of payment of Swiss withholding tax. If you live in Germany but spend more than 60 nights per year in Switzerland for work-related reasons, you are considered a Swiss tax resident and not a German tax resident. In many cases, that can be advantageous from a tax perspective. If you own property in Switzerland, it may be subject to property tax levied by the canton and municipality in which it is located.

15. Driving

If you want to use highways in Switzerland, you must pay the Swiss annual highway tax by purchasing a motorway sticker. You can get this at Swiss post offices and at most gas stations and supermarkets. You can also order it from motor clubs in many European countries.

As a cross-border driver, you must pay careful attention to customs regulations for vehicles:

• You can use a private car registered in an EU country to commute to your Swiss employer, but you cannot use the car for work.
• If you and your car stay in Switzerland during the work week and go home on weekends, you must apply for a permit. You can do this by submitting form 15.30 which is available at Swiss customs offices.
• If you receive a company car registered in Switzerland from your Swiss employer, you can use the car to commute to work and back, and for work. Private use of the Swiss company car in your EU home country is forbidden by EU customs regulations.
• If you reside in an EU member country, never borrow cars registered in Switzerland and drive them into an EU country. Driving with a Swiss car in an EU country as an EU resident is strictly forbidden by EU customs regulations and can land you very hefty fines.

16. Telecom

Some mobile service providers (like Swisscom) make all of their mobile plans accessible to cross-border workers with G permits. Others (like Yallo) only let you get mobile plans if you live in Switzerland. All Swiss prepaid mobile offers are available to non-residents, and many prepaid offers and optional bundles deliver similar value-for-money to mobile plans. You can compare Swiss prepaid offers by selecting "Prepaid offers" under "Plan or prepaid" in the interactive mobile plan comparison.

Important footnote: If you also work in your country of residence and that work makes up 25% or more of your total workload or salary, you must remain insured by the social security schemes in your country of residence. This also applies to work for your Swiss employer which is done from home in your country of residence. You are not entitled to Swiss social insurances including accident insurance, Old Age and Survivors Insurance (OASI), Disability Insurance (DI), maternity leave insurance and (when applicable) unemployment insurance. You also are not entitled to participate in occupational pension funds or to use the pillar 3a for retirement saving.

More on this topic:
Bank accounts for cross-border workers explained
Tax at source for cross-border workers explained