I will soon have a salary increase, but I was wondering if by having increased salary I might increase my tax level in a way that I receive less “after-tax” income compared to my previous salary. Therefore, I would like to ask if you know where I can find these salary tax brackets. Also, do these brackets consider bonus payments or just the 13months salary?
Thanks so much for you help.
That’s would be nonsense. Salary increase will always result in after tax increase.
- On 100k tax rate is 5%
- On 105k tax rate is 7%, but you still pay 5% on 100k, and 7% on 5k.
Edit: push as much as you can, buy me a beer later
Tax brackets are published on the cantonal website. You can also do a simulation on comparis (but you will need to know how much you can deduct).
Taxation is on yearly income when not taxed at source, on monthly income if taxed at source. When taxed at source, and you pay into 3a or have other significant deductions, you do a simplified tax declaration which will be on the yearly income. A full declaration is due for salaries over 120 kCHF or a certain wealth limit.
Normally tax brackets are so fine that you will always earn more net after a raise (for taxation at source, the tax rate changes every 50 or 100 CHF if I remember well). There is no high jump from one income level to another as you might see in other countries.
The simplified tax declaration doesn’t exist anymore, as far as I know. For additional deductions such as 3a, you have to switch to ordinary tax assessment with a full tax declaration (and this switch is permanent).
Yes they do, bonus is a part of your salary and will be included in your taxable income as such.
That must be pretty recent then ? And you seem to be right, could not find anything on it anymore for Kanton Zurich.
Tax year 2021, so yes, a fairly recent change.
Just run the numbers in the tax tool from your canton. Or use the tax calculator:
There is one edge case where earning more could result in reduce income after taxes:
Suppose that you live in a high-tax canton and pay Quellensteuer, but earn below the threshold 120k so are not required to do a tax return. In this case, it is possible that you pay less tax than you would if you were to do a tax return.
If you earn 119k, but then get a raise to 121k, you’d now be required to do a tax return, which could result in a higher tax burden that more than offsets the additional 2k of pay.
However, I think this is really an unlikely edge case, and if you are paying into your 3rd pillar this would probably never happen anyway (since then you’d probably be overpaying the tax due with the Quellensteuer deductions, so would have an incentive to do a tax return in any case).
I thought you pay the progressively higher tax rate on all of your income (vs tranches)?
But nevertheless, extra salary always means extra net salary. Just the marginal raises will get smaller and smaller the more you earn.
There is a marginal tax rate. For most people it’s around 25% (will usually be lower for B permit holders). Meaning if you earn 10k more (net), you’ll pay 2.5k more in taxes and thus earn 7.5k more after taxes. It also goes the other way around, reducing your taxable income by 6k (paying into your 3rd pillar for example) will reduce your taxes by 1.5k.
Marginal tax rate is very individual and depends on a couple of factors (canton, Gemeinde, married or not, level of salary etc.). You can easily calculate it by going to your online tax calculator and make 2 calculations. First with your current net salary (or better taxable income) and second with 10k more. The difference in the total tax amount divided by those 10k is your marginal tax rate.
The progressive tax is always applied on top. So if you earn more, you pay the additional tax on the additional income. And that tax is always less than 100% of income, which means yes, you always get more if you earn more. But please, don’t give socialists bad ideas!
Here’s what I found for canton Zürich 2018, just to get an idea:
The actual calculation is more complicated. You take the cantonal tax as base, and apply the Steuerfuss of your community. And the national tax is calculated separately.