13th AVS Pension: How to Pay? Higher Deductions Eyed (cross-border guide)

Di Valerie Linc · Published on

The Council of States' commission is pushing for mixed financing: a VAT hike and salary contributions. An extra cost of 4.2 billion that could weigh on payslips.

Contesto

TL;DR - 13th AVS pension financing debated in Switzerland - Mixed solution needed: VAT increase and salary contributions - Cross-border workers face double blow: lower net salary and higher living costs ## Key facts - Cosa: Financing of the 13th AVS pension - Quando: Starting in 2026 - Dove: Switzerland, particularly Ticino for cross-border workers - Chi: Cross-border workers and all Swiss employees - Importo: 4.2 billion francs estimated additional costs - Scadenza: December 2026 for the first payment of the 13th AVS pension - Contributo attuale: 5.3% AVS/AI/IPG contribution for employees - Aumento IVA: 0.7 percentage point increase in VAT The financing of the 13th AVS pension, approved by the people last March 3rd, is fueling debate in Bern and concerning those who cross the border daily to work in Ticino. The Social Security and Health Commission of the Council of States has laid its cards on the table: to cover the additional costs, estimated at around 4.2 billion francs starting in 2026, a mixed solution is needed. A simple adjustment to the Value Added Tax (VAT) won't be enough; an increase in salary contributions will also be required. This position directly clashes with the vision of the Federal Council, which aimed solely for a 0.7 percentage point VAT increase. It also creates a rift with the National Council, which in September had approved a time-limited VAT increase until 2030. For the States' commission, this is a non-solution. As reported by the Parliament's services, "a temporary VAT increase offers no long-term perspective and would only postpone the financing need." The goal is different: to ensure rapid and, above all, sustainable financial coverage. The proposal is therefore to combine two levers: a VAT increase and an upward adjustment of AVS de...

Dettagli operativi

The Concrete Impact on a Cross-Border Worker's Payslip What does an "increase in salary contributions" mean in practice? It means a heavier deduction from the gross salary of every worker in Switzerland, including cross-border workers. Currently, the AVS/AI/IPG contribution for employees is 5.3%. The Commission's proposal has not yet defined the exact percentage of the increase, but even a seemingly minor adjustment would have a visible effect. 📊 A practical example: On a gross salary of 5,000 CHF, the current AVS/AI/IPG contribution is 265 CHF per month. - With a 0.1% increase, the deduction would rise to 270 CHF (-5 CHF/month). - With a 0.2% increase, the deduction would rise to 275 CHF (-10 CHF/month). On an annual basis, this would represent a net reduction ranging from 60 to 120 CHF, to which the impact of the VAT increase would be added. The 0.7 percentage point VAT increase (from the current 8.1% to 8.8% for the standard rate) would translate into a general price hike on goods and services purchased in Switzerland. For a cross-border worker, this means higher costs for lunch, fuel bought in Ticino, or any other expense on Swiss territory. ⚠️ A double blow for workers: If approved, the mixed financing strategy would hit cross-border workers on two fronts: a direct reduction in their net salary and an increased cost of living for expenses made in Switzerland. The parliamentary debate in the coming months will be decisive in defining the extent of these increases, which will come into effect with the first payment of the 13th AVS pension, scheduled for December 2026.

Punti chiave

Preparing for Change: What to Do Now The political debate is still ongoing, and the outcome is not certain. However, the strong stance of the Council of States' Commission indicates that the prospect of an increase in salary contributions is more than concrete. For cross-border workers, this means that financial planning becomes even more crucial. 💡 Practical advice: - Monitor decisions: Keep an eye on the evolution of the Swiss parliamentary debate in the coming months. - Review your budget: Start considering a potential, albeit slight, reduction in your net salary starting from 2026. - Simulate the impact: Using calculation tools can help visualize the effect of different increase percentages on your specific salary. The certainty is that the cost of the 13th AVS will have to be covered, and workers will be called upon to contribute. Understanding now how these changes could affect your monthly net salary is the first step to avoid being caught unprepared. To get a clear and personalized idea, you can use our salary calculator, which will allow you to simulate different deduction scenarios and plan accordingly. Source: RSI, February 20, 2024

Punti chiave

[{"q":"How much could the AHV/IV/EO contribution for cross-border commuters in Switzerland increase?","a":"The exact percentage is not defined, but even an increase of 0.1%-0.2% would have a visible impact (e.g. -5 to -10 CHF/month on 5,000 CHF gross)."},{"q":"What will be the impact of the increase in VAT on the cost of living of cross-border commuters in Switzerland?","a":"The increase in VAT from 8.1% to 8.8% will cause a general increase in the price of goods and services in Switzerland, affecting cross-border commuters on expenses such as lunch, petrol and others purchased locally."},{"q":"How does the increase in AHV contributions affect the future pension of cross-border commuters in Switzerland?","a":"An increase in AHV contributions (e.g. +0.1% or +0.2%) does not directly reduce your future pension, but helps to finance your thirteenth AHV pension. However, a higher deduction from the gross salary reduces the net received now, without immediate impact on the amount of the pension."},{"q":"What are the differences between the tax treatment of Italian cross-border commuters and French German cross-border commuters?","a":"Italian cross-border commuters in Ticino pay Swiss VAT (currently 8.1%) on goods and services purchased in Switzerland, while French/German cross-border commuters can benefit from specific agreements. In addition, Italian cross-border commuters are not subject to taxation in Italy for income from employment in Switzerland, unlike other nationalities."},{"q":"Can I apply for a reduction in AHV contributions if I work part-time as a cross-border commuter?","a":"Yes, if your gross annual income is less than CHF 23,520 (AHV minimum threshold), you can apply for a reduction in AHV contributions. However, this means less pension coverage. For cross-bor...

Frequently Asked Questions
How much could the AHV/IV/EO contribution for cross-border commuters in Switzerland increase?
The exact percentage is not defined, but even an increase of 0.1%-0.2% would have a visible impact (e.g. -5 to -10 CHF/month on 5,000 CHF gross).
What will be the impact of the increase in VAT on the cost of living of cross-border commuters in Switzerland?
The increase in VAT from 8.1% to 8.8% will cause a general increase in the price of goods and services in Switzerland, affecting cross-border commuters on expenses such as lunch, petrol and others purchased locally.
How does the increase in AHV contributions affect the future pension of cross-border commuters in Switzerland?
An increase in AHV contributions (e.g. +0.1% or +0.2%) does not directly reduce your future pension, but helps to finance your thirteenth AHV pension. However, a higher deduction from the gross salary reduces the net received now, without immediate impact on the amount of the pension.
What are the differences between the tax treatment of Italian cross-border commuters and French German cross-border commuters?
Italian cross-border commuters in Ticino pay Swiss VAT (currently 8.1%) on goods and services purchased in Switzerland, while French/German cross-border commuters can benefit from specific agreements. In addition, Italian cross-border commuters are not subject to taxation in Italy for income from employment in Switzerland, unlike other nationalities.
Can I apply for a reduction in AHV contributions if I work part-time as a cross-border commuter?
Yes, if your gross annual income is less than CHF 23,520 (AHV minimum threshold), you can apply for a reduction in AHV contributions. However, this means less pension coverage. For cross-border commuters, the threshold applies regardless of the country of residence.

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