Guide to Gross and Net Salaries in Switzerland 2026

While Swiss payslips aren't completely standardized, most follow a similar structure that moves logically from gross income to net pay . Understanding this flow is key to demystifying your compensation:

Gross Salary → Social Security Deductions → Other Deductions → Allowances/Additions → Net Salary

At its core, your payslip tells the story of how your contracted gross salary transforms into the actual amount deposited in your bank account each month. Beyond this basic calculation, it serves as proof of income for rentals, loans, and other financial commitments .

Table: Standard Payslip Structure and Common Abbreviations

🔹 AHV/IV/EO: The First Pillar

The AHV (Old-Age and Survivors' Insurance), often called the first pillar, forms the foundation of Swiss social security . Alongside IV (Disability Insurance) and EO (Income Compensation Scheme), it provides basic protection against key life risks:

• AHV offers retirement pensions starting at age 65 for men and 64 for women, with survivors' benefits for spouses and children following a breadwinner's death .

• IV provides financial support and rehabilitation services for those with disabilities that limit their working capacity .

• EO replaces income during mandatory military or civilian service, and since 2021, during maternity (14 weeks) and paternity leave (2 weeks) .

Contribution rate: 10.6% of gross salary, split equally between employee and employer (5.3% each) . There's no upper salary limit for AHV contributions, making it a truly universal social insurance.

🔹 ALV: Unemployment Insurance

The ALV (Unemployment Insurance) provides a crucial safety net between jobs, covering up to 80% of your previous salary for a limited period . To qualify, you must have contributed for at least 12 months in the previous two years and be actively seeking employment.

Contribution rate: 2.2% on annual salary up to CHF 148,200 (for 2025), split equally between employee and employer (1.1% each) . Income above this threshold doesn't require additional ALV contributions.

🔹 BVG: The Second Pillar

The BVG (Occupational Benefits Law) governs the second pillar of Swiss social security—your pension fund . This mandatory savings system kicks in when you earn above CHF 22,050 annually (2025 threshold) and are aged 17 or older . The BVG aims to maintain your pre-retirement standard of living by providing, together with the AHV, approximately 60% of your working income during retirement.

Contribution rates vary significantly by age, pension fund, and salary, as each fund sets its own rates. Typically, contributions range from 7-18% of your "coordinated salary" (the portion between CHF 22,050 and CHF 88,200), shared between employer and employee . Employers must pay at least 50% and often contribute more generously as part of competitive compensation packages.

🔹 Accident Insurance (UVG/NBUV)

Swiss law mandates comprehensive accident coverage for all employees :

• Occupational Accident Insurance (BUV) covers accidents occurring at work or during commutes, fully financed by the employer .

• Non-Occupational Accident Insurance (NBUV) covers accidents during leisure time, typically deducted from the employee's salary unless the employer chooses to share this cost .

Contribution rates vary by employer and risk factors but typically range between 1-2% of salary .

🔹 Daily Sickness Benefits (KTG)

Unlike other deductions, KTG (Daily Sickness Benefits Insurance) is optional for employers but commonly offered . It provides income protection during illness, typically covering 80% of salary after a short waiting period. When offered, the cost is usually shared between employer and employee .

🔹 Withholding Tax (Quellensteuer)

For foreign workers without a permanent residence permit, and for cross-border commuters, Switzerland employs a withholding tax system where taxes are deducted directly from your salary . The rates vary by canton and income level, making location an important factor in your net pay calculation.

🔹 Pension Fund (BVG) Employee Contributions

While the employer organizes and partially funds the pension fund, employees also contribute a percentage of their salary. This deduction represents your personal investment in your retirement security and varies based on your age and the specific pension fund rules .

Let's apply our knowledge to a concrete example: an employee earning CHF 70,000 annually in the canton of Vaud. This calculation will illuminate exactly where your money goes and how different deductions interact.

Table: Detailed Breakdown of CHF 70,000 Salary in Vaud (2025)

Based on this calculation, our employee would take home approximately CHF 4,375 per month from their CHF 70,000 annual salary . This represents an average tax rate of 25%, though it's important to note that Switzerland uses a progressive tax system, meaning higher portions of income are taxed at higher rates .

Taxation varies significantly across Switzerland's cantons, making your location an important factor in net salary. Here's how Vaud compares to other cantons for the same CHF 70,000 salary:

Table: Cantonal Comparison for CHF 70,000 Salary (2025)

Approximate values based on available data

As we can see, Vaud falls toward the higher end of the tax spectrum, with only a few cantons like Neuchâtel and Geneva imposing higher tax burdens. This variation reflects the federal structure of Switzerland, where cantons have significant autonomy in setting tax rates and policies.