13th AVS Pension: How Will It Be Paid? Contributions & VAT Rise (cross-border guide)

Di Valerie Linc · Published on · Updated on

The Council of States' commission is pushing for a mixed financing model for the 13th AVS pension: an increase in both salary contributions and VAT. A cost of 4.2 billion that will also impact cross-border workers' payslips.

Contesto

TL;DR - Swiss 13th AVS pension financing debated: mixed solution proposed - Costs estimated at 4.2 billion francs starting 2026 - Impact on cross-border workers: higher salary deductions and VAT ## Key facts - Cosa: Finanziamento della 13a AVS - Quando: Approvato il 3 marzo 2024, entrata in vigore dal 2026 - Dove: Svizzera, inclusi lavoratori transfrontalieri - Chi: Commissione Sanità e Sicurezza Sociale del Consiglio degli Stati - Importo: 4.2 miliardi di franchi - Scadenza: 2030 (inizialmente proposto dal Consiglio Nazionale) - Contributi attuali: 10.6% (50% datore di lavoro, 50% dipendente) - Aumento proposto: Aumento sia dei contributi salariali che dell'IVA The puzzle of financing the 13th AVS (AHV) pension, approved by the Swiss people on March 3, 2024, is becoming more complex. The Social Security and Health Commission of the Council of States has put the brakes on the quick solution proposed by the Federal Council, which focused solely on a VAT increase. The commission, instead, insists on a "mixed solution," an approach that will have a direct and tangible impact on the payslips of all workers in Switzerland, including cross-border workers. The challenge is how to cover the additional costs estimated at around 4.2 billion francs starting from 2026, the year the first additional monthly payment will be made. The federal executive had proposed raising the Value Added Tax by 0.7 percentage points. This path was initially endorsed by the National Council in September, albeit with a deadline set for 2030. Now, however, the counterpart commission of the States is changing the game, deeming a temporary VAT increase a short-sighted measure that offers no long-term perspective and merely postpones the problem. The stated goal of the Parliament's services is clear: "t...

Dettagli operativi

What does this mean for cross-border workers in Ticino? The impact of this decision, if confirmed, will be twofold. On one hand, an increase in salary contributions will result in a larger deduction from the monthly payslip. The AVS/AI/IPG contributions, currently at 10.6% (split equally between employer and employee), would see an increase in the employee's share. In simple terms, this means a lower net salary for the same gross pay. Every decimal point increase in deductions will be felt directly in the monthly bank transfer. On the other hand, the VAT increase, although potentially smaller than the initial 0.7% proposal, will affect purchasing power in Switzerland. For cross-border workers who shop, refuel, or have lunch in Ticino, every purchase will become slightly more expensive. While the impact on a single receipt may seem minimal, the annual sum of these small price hikes contributes to eroding the advantage of a Swiss salary. 📊 The Political Tug-of-War The current situation is a classic standoff between the two chambers of the Swiss Parliament: - Federal Council and National Council: Initially favored an increase in VAT only. - Council of States Commission: Pushing for dual financing (contributions + VAT) to ensure long-term sustainability. The ball will now return to the parliamentary chambers, where a compromise will be sought. The final decision will precisely define how much net pays will decrease and how much the cost of living on Swiss soil will increase from 2026.

Punti chiave

Preparing for Change: Analysis and Useful Tools Uncertainty reigns, but the direction seems set: financing the 13th AVS pension will cost everyone, workers and consumers alike. For a cross-border worker, whose financial planning is already complex due to currency exchange and dual taxation, anticipating the impact of these measures is essential. Even a variation of 0.1% or 0.2% on salary contributions can mean hundreds of francs less at the end of the year. It therefore becomes strategic not only to monitor the political debate in Bern but also to have the right tools to make accurate projections. 💡 Practical Tips: - Monitor decisions: Follow the parliamentary process in the coming months to know the final rates that will be approved. - Simulate the impact: As soon as the rates are official, recalculate your family budget considering the new net income and the potential increase in costs in Switzerland. While the final rates are still under discussion, it is crucial to understand how every fraction of a percentage point on contributions can alter your monthly net income. To simulate different scenarios and prepare precisely for future changes, you can use our net salary calculator, an indispensable tool for every cross-border worker in Ticino. Source: RSI.ch, 22.11.2024

Punti chiave

[{"q":"What does the increase in AHV/IV/EO salary contributions mean for cross-border commuters?","a":"It means a higher deduction from the paycheck, with a lower net salary for the same gross salary. Every 0.1% increase can mean hundreds of francs less per year."},{"q":"How will the combined increase in VAT and wage contributions affect the purchasing power of cross-border commuters?","a":"The increase in VAT will increase the costs of goods and services in Switzerland, while the increase in wage contributions will reduce the net salary. This could erode the Swiss wage advantage for cross-border commuters, especially if the difference in the cost of living between Switzerland and Italy increases."},{"q":"How will the thirteenth AHV change for cross-border commuters from 2026?","a":"From 2026, cross-border commuters will receive an additional month's AHV payment, amounting to around 8.33% of a standard month's salary. This amount will be subject to taxation in Switzerland and may also be partially taxed in Italy, depending on the tax treaty."},{"q":"What are the risks of double taxation for the thirteenth AHV for cross-border commuters?","a":"The thirteenth AHV could be taxed both in Switzerland (reduced rate) and in Italy (standard rate). However, the Swiss-Italian convention provides for the tax credit to avoid double taxation, but it must be declared correctly in the 730 form to avoid surprises."},{"q":"Can I ask my employer to bring forward the thirteenth AHV before 2026?","a":"No, the thirteenth AHV is an automatic right from 2026 and cannot be brought forward. However, you can negotiate with the employer a voluntary bonus or a private thirteenth month's salary, subject to ordinary taxation."}]

Frequently Asked Questions
What does the increase in AHV/IV/EO salary contributions mean for cross-border commuters?
It means a higher deduction from the paycheck, with a lower net salary for the same gross salary. Every 0.1% increase can mean hundreds of francs less per year.
How will the combined increase in VAT and wage contributions affect the purchasing power of cross-border commuters?
The increase in VAT will increase the costs of goods and services in Switzerland, while the increase in wage contributions will reduce the net salary. This could erode the Swiss wage advantage for cross-border commuters, especially if the difference in the cost of living between Switzerland and Italy increases.
How will the thirteenth AHV change for cross-border commuters from 2026?
From 2026, cross-border commuters will receive an additional month's AHV payment, amounting to around 8.33% of a standard month's salary. This amount will be subject to taxation in Switzerland and may also be partially taxed in Italy, depending on the tax treaty.
What are the risks of double taxation for the thirteenth AHV for cross-border commuters?
The thirteenth AHV could be taxed both in Switzerland (reduced rate) and in Italy (standard rate). However, the Swiss-Italian convention provides for the tax credit to avoid double taxation, but it must be declared correctly in the 730 form to avoid surprises.
Can I ask my employer to bring forward the thirteenth AHV before 2026?
No, the thirteenth AHV is an automatic right from 2026 and cannot be brought forward. However, you can negotiate with the employer a voluntary bonus or a private thirteenth month's salary, subject to ordinary taxation.

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