How Long do Swiss Work for the State Each Year?

Every year, part of the income we earn goes to the government by way of taxes. This article shows you how long residents of Switzerland have to work every year to cover the cost of Swiss federal, cantonal, municipal, and church taxes on their income. The work day in a calendar year when you stop working to pay your taxes and start working for your own income is often referred to as Tax Freedom Day.

There are many factors which affect when you, personally, can celebrate Tax Freedom Day. Your income, civil status, place of residence, and whether or not you have children are some of the most important criteria. The Swiss Federal Tax Administration (FTA) explains when you will reach Tax Freedom Day based on these factors.

The median gross annual salary in Switzerland is around 80,000 Swiss francs for a person working fulltime. A single person without children living in one of the 26 cantonal capitals has to work between 20 days (Zug) and 62 days (Neuchâtel) to cover the cost of income taxes.

Table 1: Single adult without children, with 80,000-franc gross income

For other scenarios too, Zug often has the best tax conditions. Neuchâtel, on the other end of the spectrum, is the town in which residents spend the most time working for the state. But there are also locations which can have much lower or higher taxes depending on your situation. For example, a single adult living in Altdorf, the cantonal capital of Uri, will reach Tax Freedom Day exceptionally early on in the year (table 1). But for a couple with two children, only one working parent, and the same 80,000-franc income, Altdorf is on the bottom half of the list (table 2).

Table 2: Couple with 2 children, with one CHF 80,000-franc gross income

Having kids makes a big difference with regards to income taxes. While a couple with two children (table 2) spend between 0 days (Geneva) and 26 days (Neuchâtel) out of the year working for the state, the same couple without children would work 11 days (Zug) to 42 days (Neuchâtel and Lausanne) to pay their income taxes.

That also means that from a tax perspective, getting married can make financial sense for couples in which only one partner earns an income – even if they do not want to have children. A single adult without children earning 80,000 francs per year has to spend between 20 days (Zug) and 62 days (Neuchâtel) per year working for the state (table 1). So, in the city of Zug, reaching Tax Freedom Day takes twice as long for an unmarried couple as it does for a married couple.

The more you earn, the longer you work for the state

The figures clearly show that you are taxed much more heavily if you earn more. A single adult without children who earns a gross income of 50,000 francs per year has to work between 12 days (Zug) and 44 days (Neuchâtel) to cover their income taxes. If the same adult earned 150,000 francs per year, they would only reach Tax Freedom Day after 44 to 85 days – three times as long. If they lived in Neuchâtel, they would work almost the entire first quarter of the year to pay their taxes.

Here is an even more extreme example: A person with an income of 1 million francs per year living in a cantonal capital would have to work between 74 days (Zug) and 136 days (Geneva) out of the year just to cover the cost of income taxes. So residents of Geneva who earn that kind of income have to spend more than one-third of the year working for the government.

Is it worth moving to save on taxes?

As the figures show, there are huge differences in how long it takes to reach Tax Freedom Day depending on the various relevant factors. By simply moving from the highest-tax cantonal capital to the one with the lowest taxes, you could immediately cut out two-thirds of the time you have to spend working to support the state.

But depending on your situation, making a major move just to pay less income tax may not make sense. The FTA’s Tax Freedom Day only accounts for income taxes. It does not factor in other taxes, nor other things which affect your finances (like the cost of housing or health insurance premiums). The town of Zug, for example, has a very favorable tax regime, but land prices and rents in that canton are higher than average. Depending on where you move to, you may well end up having to use your tax savings to cover other additional costs. If you are considering moving to a location with lower taxes, make sure to look at all of the other potential cost factors as well.

Regardless of where you live, optimizing your taxes is always beneficial. There are a number of ways to cut out unnecessary tax spending. For example, you can lower your income taxes by using the pillar 3a to save for your old age and protect yourself and your dependents financially. Claiming the tax deductions explained in the moneyland.ch guide to saving on taxes can also significantly lower your income taxes. Some cantons pay interest on taxes paid in advance.

More on this topic:
Simple ways to save on taxes in Switzerland
Tax deductions for new expatriates in Switzerland explained
Swiss withholding taxes for expats and cross-border workers explained
Interest rates for early and late Swiss tax payments explained