13th AVS Pension: A Lighter Payslip and Higher VAT? (cross-border guide)

Di Valerie Linc · Published on · Updated on

The Council of States' commission is pushing for a mixed funding model for the 4.2 billion for the 13th AVS pension: a hike in salary contributions and VAT. What this means for cross-border workers' salaries.

Contesto

TL;DR - Swiss 13th AVS pension financing approved March 2024 - Costs estimated at 4.2 billion francs starting 2026 - Proposal includes salary and VAT increases ## Key facts - Data approvazione: 3 marzo 2024 - Costo stimato: 4.2 miliardi di franchi a partire dal 2026 - Prima erogazione: Dicembre 2026 - Contributo attuale: 5.3% del salario lordo - Aumento contributo: Non ancora quantificato in punti percentuali - Aumento IVA proposto: 0.7 punti percentuali - Tasso IVA attuale: 8.1% The path to financing the 13th AVS pension, approved by the Swiss people on March 3, 2024, is becoming increasingly complex and is pointing directly at the payslips of workers, including cross-border commuters. The Social Security and Health Commission of the Council of States has made a move, proposing a "mixed solution" to cover the extra costs, estimated at around 4.2 billion francs starting in 2026. The proposal brings a combination of two measures to the table: an increase in salary contributions and an adjustment to the Value Added Tax (VAT). This position directly clashes with that of the Federal Council, which was solely focused on a 0.7 percentage point increase in VAT. The National Council, despite approving a VAT hike in September, had intended it as a temporary measure until 2030. This approach was flatly rejected by the States' commission, which described it as a solution that "offers no long-term perspective and would postpone the need for financing." The goal, according to the commission members, must be to ensure "rapid and sustainable" funding for the new pension benefit, with the first payment confirmed for December 2026. A political clash is therefore brewing in Bern, the outcome of which will have a direct and tangible impact on the purchasing power of those working in Sw...

Dettagli operativi

The Direct Impact on a Cross-Border Worker's Payslip What does an "increase in salary contributions" actually mean? For every cross-border worker receiving a salary in Ticino, it means a heavier deduction under the AVS/AI/IPG line item on their payslip. Currently, the employee's contribution is 5.3% of the gross salary. The commission's proposal, although not yet quantified in percentage points, would directly affect this rate. Let's take a practical example: - On a gross salary of 5,000 CHF, a 0.2% increase in contributions would result in an additional deduction of 10 CHF per month, or 120 CHF per year. - On a salary of 7,000 CHF, the impact would rise to 14 CHF per month, for a total of 168 CHF per year. While these figures may seem small, they add up with other deductions and inflation, eroding the net salary that arrives in Italian bank accounts each month. ## VAT Increase: What Changes for Purchases in Ticino The other lever of the mixed financing model is the VAT increase. Although cross-border workers reside in Italy, many make various purchases in Switzerland, from weekly groceries at a shopping center in Chiasso or Mendrisio, to filling up their gas tank, to buying electronics or clothing in Lugano. An increase in the standard rate, currently at 8.1%, would translate into a general price hike on goods and services. The Federal Council's proposal mentioned a +0.7%, but the commission intends to revise the rates more structurally. This means the perceived cost of living during time spent in Ticino would increase, further reducing the purchasing power of their earned Swiss francs.

Punti chiave

What to Expect in the Coming Months The debate is far from over. The ball is now in the court of the two chambers of Parliament, which will have to find a final compromise. The differing views among the Council of States, the National Council, and the Federal Council ensure that the discussion will be heated. The only certainty is the deadline: the financing mechanism must be operational to guarantee the first payment of the 13th AVS pension in December 2026. For cross-border workers, this uncertain scenario makes it even more important to have full control over their finances and understand the dynamics of their remuneration. Many variables are at play, and a small percentage change can have a significant impact on the annual family budget. 💡 How to prepare? - Monitor decisions from Bern: Follow the parliamentary process to see which option (or which mix) will prevail. - Plan your budget: Account for a possible, albeit slight, reduction in your net payslip and an increase in costs for those who shop in Switzerland. While waiting for a final decision, it's crucial to understand how these potential changes could affect your salary. To get a clear picture of the impact of different contribution rates on your pay, we recommend using our net salary calculator, a precise tool to simulate your payslip in Ticino. (Source: RSI)

Punti chiave

[{"q":"What is the impact of the increase in AHV/IV/EO salary contributions on the paycheck of a cross-border commuter in Switzerland?","a":"The increase in contributions (currently at 5.3% of gross salary) involves heavier deductions. For example, a 0.2% increase on a salary of CHF 5,000/month will result in an additional deduction of CHF 10/month (CHF 120/year)."},{"q":"What is the decision-making process for financing the 13th AHV pension and how could it affect cross-border commuters?","a":"The decision-making process passes through the Swiss Parliament, where the Council of States, the National Council and the Federal Council must find a compromise between increasing wage contributions and VAT. Cross-border commuters could face a reduction in net payroll and increased costs for purchases in Switzerland, with an expected impact from December 2026."},{"q":"How does the Swiss VAT deduction work for cross-border commuters who buy goods in Ticino?","a":"VAT in Switzerland is levied when purchasing goods and services. For cross-border commuters, an increase in the standard rate (currently 8.1%) would lead to an immediate increase in the price of products such as electronics, clothing or petrol. For example, a +0.7% on a purchase of 100 CHF would mean 0.70 CHF more, but on recurring expenses the impact is multiplied."},{"q":"What are the differences between the financing of the 13th AHV proposed by the Federal Council and the Committee of States?","a":"The Federal Council proposed a temporary increase in VAT of 0.7 percentage points until 2030, while the Commission of States suggests a mixed solution: increase in wage contributions (AHV/IV/EO) + structural revision of VAT. The first option has less impact on wages, the second guarantees long-term coverage but reduces purc...

Frequently Asked Questions
What is the impact of the increase in AHV/IV/EO salary contributions on the paycheck of a cross-border commuter in Switzerland?
The increase in contributions (currently at 5.3% of gross salary) involves heavier deductions. For example, a 0.2% increase on a salary of CHF 5,000/month will result in an additional deduction of CHF 10/month (CHF 120/year).
What is the decision-making process for financing the 13th AHV pension and how could it affect cross-border commuters?
The decision-making process passes through the Swiss Parliament, where the Council of States, the National Council and the Federal Council must find a compromise between increasing wage contributions and VAT. Cross-border commuters could face a reduction in net payroll and increased costs for purchases in Switzerland, with an expected impact from December 2026.
How does the Swiss VAT deduction work for cross-border commuters who buy goods in Ticino?
VAT in Switzerland is levied when purchasing goods and services. For cross-border commuters, an increase in the standard rate (currently 8.1%) would lead to an immediate increase in the price of products such as electronics, clothing or petrol. For example, a +0.7% on a purchase of 100 CHF would mean 0.70 CHF more, but on recurring expenses the impact is multiplied.
What are the differences between the financing of the 13th AHV proposed by the Federal Council and the Committee of States?
The Federal Council proposed a temporary increase in VAT of 0.7 percentage points until 2030, while the Commission of States suggests a mixed solution: increase in wage contributions (AHV/IV/EO) + structural revision of VAT. The first option has less impact on wages, the second guarantees long-term coverage but reduces purchasing power.
If the 13th AHV comes into force in 2026, how will the additional contributions for cross-border commuters be paid?
The additional contributions will be deducted directly from the Swiss paycheck, as is already the case for AHV/IV/EO. The current rate of 5.3% could increase, but the levy will be automatic and visible in the 'social deductions' item of the payslip. No additional obligations for the worker.

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