Withholding tax applies to cross-border commuters and Swiss residents with a B permit. Cross-border commuters of Swiss nationality are also subject to withholding tax. This article deals with withholding tax in Geneva.
Table of contents
What is withholding tax?
Withholding tax is a tax deducted from the gross income paid to the employee. Its purpose is to ensure that tax is paid. It applies to cross-border commuters and Swiss residents who do not have a C permit or Swiss nationality. Swiss cross-border commuters are also subject to withholding tax.
Who is subject to withholding tax in Geneva?
People who are resident in Switzerland but who do not yet have a residence permit (Permis C) are subject to withholding tax. The same applies to people who do not have their main tax domicile in Switzerland for certain types of income.
How does withholding tax work?
The employer must deduct tax at source from the employee's salary to ensure that the income is taxed.
Employers are obliged to deduct tax at source:
- Register as an employer for withholding tax and become a Debtor of Taxable Benefits (DPI),
- Have the employee complete a form indicating which scale applies to the employee's situation.
- Deduct tax at source from the employee's gross income
- Pay tax at source each month
Geneva source tax scale
How can I find out my withholding tax rate?
There are two ways to find your withholding tax rate:
- Complete the online form for an immediate response.
- Print and complete the form and return it to the tax authorities.
Once you have completed the form, you should be able to find the rate that applies to your gross salary.
What does the tax scale take into account?
The scale is determined by the employee's situation, in particular whether they are single, married or separated, whether they have dependent children and whether their spouse has an income.
Takes into account :
- Your marital status
- Your children only if they are your dependants
Do not take into account :
- Minors in alternating custody
- Minor children if you are cohabiting
- Children over the age of majority (from the month following their coming of age)
Overview of rates for different situations :
- Single without children, A0 scale
- Taxpayer paying maintenance, scales A1 to A5
- Married and spouse with no income, scales B0 to B5
- Married and spouse with income, scales C0 to C5
- Insurance income, scale G
- Single-parent family, scales H1 to H5
Change of scale during the year
Any event requiring a change to the scale (e.g. marriage, divorce, birth, etc.) must be taken into account from the beginning of the month following the event.
Example: Wedding on 09 June
- Single until 30 June, scale A0
- Married from 1 July to 31 December, scale B or C (whether spouse works or not)
Employees must inform their employer of any changes in their situation so that this can be taken into account when deducting tax at source. from the month following the event..
What can I do about overcharging?
As mentioned above, it is up to the employer to deduct tax at source correctly. In practice, however, this is less straightforward, as accounting software is not always up to scratch. If your employer has deducted too much tax, you have two options.
First option, is to make an adjustment at the end of the year ideally in December taking into account the annual taxable salary actually achieved.
CHF 10,000 withholding tax was deducted from you between January and November.
For a salary of CHF 75,000 gross taxed at scale A0, the rate applicable in 2022 is 12.76% the tax payable is CHF 9,570 (75,000*12.76%).
An amount of CHF 430 (9,570-10,000) must be repaid in December in addition to the salary.
Second option, you can submit a request for rectification to the tax authorities.
With this option, you need to do what you need to do by the deadline. You have until 31 March to submit your application.
Not enough taken, What should I do?
For various reasons, withholding tax may not be correctly deducted.
An adjustment should be made at the end of the year to take account of the taxable annual salary actually earned.
The difference in tax must be deducted in December.
As an employer, withholding tax is a task for which you are responsible. Managing it properly means you don't have to make major adjustments at the end of the year or find yourself in tricky situations.
As an employee at source you have a duty to pay attention to how your employer deducts tax from you at source, if necessary make a request for rectification or a request for Subsequent Ordinary Tax.
Our Geneva tax specialists are at your disposal.
FAQ - Withholding tax
Withholding tax is a tax deducted directly from the salary by the employer or insurer, or from the pension by the pension fund.
At the beginning of the year, the employer issues a certificate to the employee stating the income subject to withholding tax, the tax scale applied and the tax deducted during the previous year.
The collection scale is determined according to the taxpayer's family situation, which is announced in the levy declaration at the beginning of the year or whenever there is a change in the taxpayer's situation.
A DRIS is a Demande de Rectification de l'Imposition à la Source, and a TOU is a Taxation Ordinaire Ultérieure.
These two forms can be used to request a correction to the amount of withholding tax deducted if certain personal deductions or family situations have not been taken into account.