13th AVS: more deductions from payslips? (cross-border guide)

Di Valerie Linc · Published on

Bern is divided over the financing of the 13th AVS pension. The Council of States' commission is pushing for a mix of a VAT increase and higher salary contributions. The impact on cross-border workers' payslips would be direct.

Contesto

TL;DR - 13th AVS pension financing sparks debate in Switzerland. - Cross-border workers' salaries may be affected. - Two proposals: VAT increase or mixed solution. ## Key facts - Financing Need: 4.2 billion francs starting from 2026. - VAT Increase: 0.7 percentage points proposed by Federal Council. - Current AVS Rate: 10.6% of gross salary, 5.3% deducted from employee. - First Payment: Scheduled for December 2026. - Impact on Workers: Mixed solution affects gross salary deductions. - VAT Increase Impact: Limited to purchases made in Switzerland. - Parliament's View: Temporary VAT increase is not a long-term solution. The financing of the 13th AVS pension, approved by the people on March 3rd, is sparking a clash in Bern, and the consequences could be felt directly on the payslips of thousands of cross-border workers in Ticino. The Social Security and Health Commission of the Council of States has reiterated its position: to cover the extra costs, estimated at around 4.2 billion francs starting from 2026, a mixed solution is needed. This proposal aims to combine an increase in salary contributions with an upward adjustment of the Value Added Tax (VAT). This view directly conflicts with that of the Federal Council, which would prefer to act solely on the tax lever by proposing a VAT increase of 0.7 percentage points. The National Council also followed a similar line in September, approving a VAT increase limited until 2030. For the Council of States' commission, this is a non-solution. In an official note, the Parliament's services clarified that "a temporary VAT increase offers no long-term perspective and would postpone the need for financing." The goal, on the contrary, is to ensure rapid and, above all, sustainable financial coverage for a measure that will become...

Dettagli operativi

The direct impact on net pay For the cross-border workers who cross the borders at Chiasso, Gaggiolo, or Ponte Tresa every day, the difference between the two proposals is substantial. A VAT increase would have a marginal impact, limited to any purchases made on Swiss soil. The proposal from the Council of States' commission, however, would directly affect gross salary. Currently, social security contributions for the first pillar (AVS/AI/IPG) amount to 10.6% of the gross salary, split equally between the employer and the employee. The worker, therefore, sees a deduction of 5.3% on their payslip. The "mixed solution" would involve an increase in this rate. Although the exact percentage has not yet been defined, even an adjustment of a few tenths of a point would result in a lower net amount at the end of the month. For a cross-border worker, this means fewer francs to convert into euros, with a tangible effect on the family budget. 📊 Scenario A vs. Scenario B - VAT-only increase: Gross salary and AVS deductions do not change. The net amount to be converted into euros remains the same. The cost of living in Switzerland increases slightly. - Mixed Solution (VAT + Contributions): The AVS deduction on the gross salary increases. The "net at the border" credited to the bank account is reduced. The impact is direct and monthly.

Punti chiave

What to expect in the coming months The ball is now back in the court of the two Chambers of Parliament. The tug-of-war between those who want to protect the purchasing power of salaries (by limiting the measure to VAT) and those seeking a more structural solution for the AVS finances (by including contributions) is set to continue. It is likely that a compromise will be reached, perhaps with a more moderate increase in contributions than initially proposed, balanced by an adjustment to the VAT. ⚠️ For cross-border workers, it is crucial to monitor the evolution of this political debate, as the final decision will have a permanent effect on net pay. Understanding how these variables can change one's salary is a critical step for proper financial planning, especially in a context of a volatile franc-euro exchange rate. 💡 With uncertainty over future rates and deductions, it becomes even more important to have tools to project one's earnings. To simulate how your net salary might change based on different contribution scenarios, we recommend using our net salary calculator, which is always updated with the latest regulations. Source: RSI, 14.11.2024

Punti chiave

[{"q":"What is the impact of a VAT increase on the net salary of a cross-border commuter in Switzerland?","a":"The impact is marginal, limited to purchases in Switzerland, with no change in gross or net salary."},{"q":"What is the impact of an increase in social contributions AVS on the net salary of a frontier worker?","a":"An increase in AVS social contributions (for example, from 5.3% to 5.6% on gross wage) would reduce the net wage, with a direct and monthly impact. For example, on a gross salary of 60,000 CHF/year, an increase of 0.3% would mean a net reduction of about 180 CHF/year."},{"q":"How does the thirteenth AVS income affect the calculation of taxes for frontier workers in Ticino?","a":"The thirteenth AVS income, if approved, will not be subject to AVS contribution but will be taxed as ordinary income. For a front desk with a gross salary of CHF 60,000, the direct federal tax could increase by approximately CHF 200-300 per year, depending on the tax class."},{"q":"Can an increase in AHV contributions for cross-border commuters be offset by tax breaks in Italy?","a":"No, Swiss AHV contributions are not deductible from the Italian tax return. However, taxable income in Italy could only be reduced if other local deductions apply, but not for contributions paid in Switzerland."},{"q":"What is the difference between net salary in Switzerland and net salary in Italy for a cross-border commuter with a gross salary of CHF 5,000?","a":"With 5,000 CHF gross, the Swiss net (excluding the thirteenth) is about 3,600 CHF, while in Italy, with progressive rates, the net would be about 2,800-3,000 CHF. The main difference comes from the higher social contributions in Switzerland (10.6% AHV vs ~9% in Italy) and local taxes."}]

Frequently Asked Questions
What is the impact of a VAT increase on the net salary of a cross-border commuter in Switzerland?
The impact is marginal, limited to purchases in Switzerland, with no change in gross or net salary.
What is the impact of an increase in social contributions AVS on the net salary of a frontier worker?
An increase in AVS social contributions (for example, from 5.3% to 5.6% on gross wage) would reduce the net wage, with a direct and monthly impact. For example, on a gross salary of 60,000 CHF/year, an increase of 0.3% would mean a net reduction of about 180 CHF/year.
How does the thirteenth AVS income affect the calculation of taxes for frontier workers in Ticino?
The thirteenth AVS income, if approved, will not be subject to AVS contribution but will be taxed as ordinary income. For a front desk with a gross salary of CHF 60,000, the direct federal tax could increase by approximately CHF 200-300 per year, depending on the tax class.
Can an increase in AHV contributions for cross-border commuters be offset by tax breaks in Italy?
No, Swiss AHV contributions are not deductible from the Italian tax return. However, taxable income in Italy could only be reduced if other local deductions apply, but not for contributions paid in Switzerland.
What is the difference between net salary in Switzerland and net salary in Italy for a cross-border commuter with a gross salary of CHF 5,000?
With 5,000 CHF gross, the Swiss net (excluding the thirteenth) is about 3,600 CHF, while in Italy, with progressive rates, the net would be about 2,800-3,000 CHF. The main difference comes from the higher social contributions in Switzerland (10.6% AHV vs ~9% in Italy) and local taxes.

Related articles