Polymechanical frontier in Ticino: salary and requirements

Context

TL;DR

• The new tax agreement has applied since January 1, 2024.
• Cross-border commuters are subject to tax in Switzerland and Italy.
• The tax credit avoids double taxation in the EC framework of 730.
• The G permit is mandatory for workers residing in Italy.

Key facts

• What: Polymechanical work in Canton Ticino.
• When: Effective January 1, 2024 (new agreement).
• Where: Canton of Ticino, Switzerland.
• Who: Frontier workers residing in Italy.
• The threshold of 10,000 euros of Article 4 of L. 83/2023 concerns exclusively income from employment carried out abroad, in a border area or in a neighboring country, continuously and exclusively, by persons residing in Italy, referred to in Article 1, paragraph 175, of L. 147/2013; it is not a general deductible nor an exemption from Swiss tax at source.

The professional activity of the polymechanist in Canton Ticino represents one of the most sought-after technical figures in the Swiss labor market. For candidates from Italy, the regulatory framework has been profoundly renewed by the new tax agreement signed on December 23, 2020 and fully operational from January 1, 2024. This legislation, ratified in Italy by Law 83 of 13 June 2023, has modified the methods of management of cross-border taxation.

The tax framework for border crossers

Under current legislation, earned income in Switzerland is subject to a taxation mechanism involving both states, exceeding the previous regime based on Swiss taxation alone. The frontier worker must declare the income in Italy, where the Revenue Agency applies IRPEF rates (23% up to 28,000 euros, 33% between 28,001 and 50,000 euros, 43% over 50,000 euros). To avoid double taxation, the taxpayer can use the tax credit by completing the EC framework of Model 730, deducting what has already been paid in Switzerland. The transitional regime of Article 9 of the Agreement applies only to those who meet the conventional definition and worked in Graubünden, Ticino or Valais between 31 December 2018 and 17 July 2023; the covered employment income is taxed exclusively in Switzerland. In other cases, the ordinary regime applies, with Italian taxation and credit for Swiss tax. The 10,000 euros of Article 4 L. 83/2023 are only the limit for income referred to in Article 1, paragraph 175, L. 147/2013, not a general deductible. [AFC Card] (https://www.estv.admin.ch/dam/it/sd-web/Zbr5Jb-40aYm/int-laender-it-faktenblatt-faqs-it.pdf) · [Agreement, Art. 9] (https://www.fedlex.admin.ch/eli/cc/2023/410/it) * Standard, art. 4.

Operational details

The activity of a polymechanic requires solid technical preparation, often verified through the recognition of the foreign qualification. In Ticino, companies operating in the metalworking and precision sectors are looking for figures capable of operating numerically controlled (CNC) machinery and managing complex production cycles. The management of the Swiss pay slip includes various mandatory social deductions that every worker must be aware of.

Management of social contributions

The gross salary is subject to social security deductions managed according to Swiss law. The AVS/AI/IPG share to be paid by the employee is set at 5.3%. To this is added the contribution for unemployment insurance (AD/AC) equal to 1.1%, calculated on a maximum of CHF 148,200 per year. As regards occupational pension provision (LPP), deductions vary between 7% and 18% based on the age group, with contribution obligations starting from the age of 25.

Health and KVG insurance

A crucial aspect for cross-border workers is the right to opt for health insurance. G cross-border commuters can choose between Swiss healthcare coverage (LAMal) or maintaining the Italian healthcare system. In case of membership of the KVG, the deductibles for adults vary between 300 and 2,500 CHF. It is essential to note that tax rates and contributions are established by federal or cantonal laws and administered by the Federal Tax Administration (AFC/ESTV), not being the responsibility of the UFAS or the BFS. The double taxation agreement between Italy and Switzerland, signed on 9 March 1976, remains the fundamental legal pillar for relations between the two states, considering that Switzerland is not a member of the EU or the EEA.

Useful tools for your case

To conveniently check your scenario within/beyond 20 km, use the net salary calculator and tax return guide.

Key points

For those who wish to undertake this career, the procedure starts with the search for a job and the subsequent request for the G permit from the cantonal authorities. Once the contract has been obtained, the worker must regularize his tax and social security position. It is necessary to constantly monitor communications from the Revenue Agency and the Cantonal Tax Administration for any regulatory updates.

Operating procedure for cross-border workers

1. Active search: Consult job offers at companies active in Ticino. 2. Obtaining permit: Request G permit through employer. 3. Healthcare choice: Exercise the KVG right of option within the established timeframe. 4. Tax return: Preparation of form 730 with CE framework for the tax credit.

Calculating the net paycheck is a complex exercise due to the interaction between the Swiss rates and the Italian IRPEF rates. We recommend using simulation tools to evaluate the real tax impact of your salary. To better understand how to optimize your contribution situation, including payments to the second LPP pillar, it is advisable to consult the dedicated guides on the portal. Financial planning, including currency exchange management and retirement planning, is essential for those working across borders. For a precise estimate of your monthly net income based on current legislation, we recommend using salary calculator to obtain an accurate projection of withholdings and taxes owed in both tax contexts.