Change of employer for single border workers in 2024

Context

In a nutshell

• New Frontier Agreement in force from 1 January 2024
• Mandatory G permit renewal for employer change
• Guaranteed AVS/LPP/LAMal contribution continuity

Key facts

• What: Change of employer for single border workers
• When: From 1 January 2024
• Where: Canton Ticino
• Who: Single cross-border commuters
• Amount: Not specified

The new Frontier Agreement, signed on 23 December 2020 and in force from 1 January 2024, introduces new procedures for changing employers for single border workers. This agreement, ratified in Italy with Law 83 of 13 June 2023, establishes that border workers must renew the G permit at the Cantonal Tax Office (UCC) and the Cantonal Population Office (UCP).

Concrete examples

A border worker resident in Como who works in Lugano must renew the G permit if he/she changes employer. For example, if you move from a consulting firm to a manufacturing company, you need to follow the new procedures. This also applies to those who move from a municipality like Mendrisio to another like Bellinzona.

Regulations and dates

The agreement states that the renewal of the G permit must be requested within 30 days of the change of employer. The legislation requires border workers to submit a declaration of work and a valid employment contract. In addition, it is necessary to demonstrate the continuity of contributions AVS/LPP/LAMal.

Operational checklist

1. Declaration of

Operational details

Procedure for renewing the G permit

The renewal of the G permit is mandatory for all cross-border commuters who change employers. This process requires the submission of a series of documents, including the employment contract with the new employer, the residence certificate, and the civil status certificate. It is important to note that the renewal of the G permit must be carried out within 30 days of the change of employer.

Continuity of AVS/LPP/LAMal contributions

The new Cross-Border Agreement, which came into force on January 1, 2024, guarantees contribution continuity for cross-border commuters who change employers. This means that AVS, LPP, and LAMal contributions will continue to be paid without interruption, ensuring the insurance and pension coverage of cross-border commuters. For example, a cross-border commuter who changes employers in Lugano, with an annual salary of 80,000 CHF, will continue to pay AVS contributions (8.4% of the salary) and LPP contributions (7% of the salary) without interruption.

Documents to be updated

In addition to renewing the G permit, cross-border commuters who change employers must update a series of documents, including the employment contract, the residence certificate, and the civil status certificate. It is important to verify that all documents are up-to-date and compliant with the new regulations. For example, a cross-border commuter residing in Mendrisio must update the residence certificate with the municipality within 14 days of the change of employer.

Operational checklist for changing employers

1. Employment contract: Obtain the new employment contract from the employer. 2. Residence certificate: Update the residence certificate with the municipality of residence. 3. Civil status certificate: Verify that the civil status certificate is up-to-date. 4. G permit: Request the renewal of the G permit from the Migration Office within 30 days of the change of employer. 5. Insurance contributions: Verify the continuity of AVS, LPP, and LAMal contributions with the new employer.

Comparison of scenarios

For single cross-border commuters, changing employers can have various tax and contribution implications. For example, a cross-border commuter who changes employers may benefit from a higher tax exemption, depending on the new employment contract. It is important to consult a tax advisor to assess the specific implications of changing employers.

Scenario 1: Single cross-border commuter with a salary of 70,000 CHF

A single cross-border commuter residing in Chiasso, with an annual salary of 70,000 CHF, may benefit from a tax exemption of 13,000 CHF if the new employer offers a contract with more favorable tax conditions. This could reduce the income tax from 12,000 CHF to 10,000 CHF.

Scenario 2: Single cross-border commuter with a salary of 90,000 CHF

A single cross-border commuter residing in Locarno, with an annual salary of 90,000 CHF, may benefit from a tax exemption of 15,000 CHF if the new employer offers a contract with more favorable tax conditions. This could reduce the income tax from 18,000 CHF to 15,000 CHF.

Practical advice

• Consult a tax advisor: Before changing employers, it is advisable to consult a tax advisor to assess the tax and contribution implications.
• Verify documents: Ensure that all documents are up-to-date and compliant with the new regulations.
• Renew the G permit: Carry out the renewal of the G permit within 30 days of the change of employer.

Conclusion

Changing employers for single cross-border commuters in 2024 involves a series of procedures and tax and contribution implications. It is important to follow an operational checklist and consult a tax advisor to assess the specific implications of changing employers.

Useful planning tools

To estimate your pension strategy, use the pension planner and the pillar 3 simulator.

Key points

Step-by-step procedure

1. G permit renewal: Submit the required documents to the Cantonal Tax Office (UCC) and the Cantonal Population Office (UCP) within 30 days of changing employers. It is essential to have the updated employment contract, residence certificate, and valid residence permit on hand. 2. Document update: Ensure that all documents are up-to-date and compliant with new regulations. This includes renewing the residence permit, which costs CHF 60 for cross-border commuters, and confirming residence in the home municipality, such as Lugano or Mendrisio. 3. Tax consultation: Consult a tax advisor to assess the specific implications of changing employers. For example, if a cross-border commuter moves from an employer in Lugano to one in Chiasso, the tax rates can vary significantly. An advisor can help calculate the new taxes and plan for tax deductions.

Tools and resources

For further information and support, cross-border commuters can consult the official Canton Ticino website and use the tax calculator available on Frontaliere Ticino. This tool allows you to enter your data and obtain an estimate of the taxes due, facilitating financial planning. For example, a cross-border commuter with an annual salary of CHF 80,000 might discover that changing employers from Lugano to Chiasso could reduce their annual taxes by approximately CHF 1,500.

Operational checklist

• Employment contract verification: Ensure the new employment contract is signed and compliant with Swiss regulations.
• Residence permit update: Request the renewal of the residence permit from the UCP within 30 days of changing employers.
• Tax consultation: Schedule a consultation with a tax advisor to assess the tax implications of changing employers.
• Residence update: Confirm residence in the home municipality and update any necessary documents.

Comparison of practical scenarios

Scenario 1: A cross-border commuter working in Lugano with an annual salary of CHF 70,000. With current tax rates, they might pay around CHF 18,000 in annual taxes. If they change employers and start working in Chiasso, taxes could decrease to CHF 16,500, saving approximately CHF 1,500 per year. Scenario 2: A cross-border commuter working in Mendrisio with an annual salary of CHF 90,000. With current tax rates, they might pay around CHF 25,000 in annual taxes. If they change employers and start working in Lugano, taxes could increase to CHF 27,000, with an increase of approximately CHF 2,000 per year.

Final CTA

To calculate your net salary and better understand the tax implications of changing employers, use our tax calculator. This tool will help you plan your finances and make informed decisions about your future career.