Border payroll 2026: practical simulation (cross-border guide)

Context

In brief

• Withholding tax only in Switzerland: no double taxation thanks to the Italian tax credit
• New Agreement 2024: old cross-border workers exemption €7,500, new €10,000
• Mandatory rates: AVS 5.3%, AD/AC 1.1%, LAINF 0.7-1.5%, LPP 7-18% per age bracket

Key facts

• What: Swiss payslip with AVS, AD/AC, LAINF, LPP deductions and withholding tax
• When: Calculations 2026 according to the New Cross-Border Workers Agreement (effective 1 January 2024)
• Where: Cross-border workers Italy-Switzerland, Canton Ticino
• Who: Cross-border workers employed in Switzerland with permit G
• Tax: Withheld only in Switzerland, tax credit in Italy (CE 730 form)
• Exemption: Old cross-border workers €7,500, new €10,000 annually

The Swiss payslip of the cross-border worker is not a simple subtraction of gross minus net. It is the intertwining of five levels of mandatory deductions that add up before generating the Swiss taxable income: AVS/AI/IPG at 5.3%, AD/AC at 1.1%, LAINF between 0.7% and 1.5%, LPP from 7% to 18% depending on the age bracket (from 25 years onwards), and finally the federal and cantonal withholding tax. Each item has its own logic, but the biggest surprise is often the withholding tax: it is withheld directly in Switzerland, without Italy applying an additional tax. The mechanism is the tax credit provided by the CE section of the Italian income tax return, a protection that dates back to the Double Taxation Convention signed on 9 December 1976 between Italy and Switzerland.

…

Operational details

New Agreement: the change of rules for old and new cross-border workers

The New Cross-Border Workers Agreement has introduced two parallel and time-limited regimes. "Old" cross-border workers — i.e., those who already had cross-border worker status before July 17, 2023 — enjoy an Italian tax exemption of €7,500 annually starting from January 1, 2024, and until December 31, 2033. This is a ten-year exemption designed to facilitate the transition to a new system. "New" cross-border workers — hired as cross-border workers after July 17, 2023 — are entitled to an annual allowance of €10,000, with no time limit.

How does this apply in practice? A cross-border worker with a gross Swiss salary of 60,000 CHF first incurs Swiss deductions (AVS 5.3% = CHF 3,180, AD/AC 1.1% = CHF 660, LAINF 1% = CHF 600, LPP 7% average = CHF 4,200), totaling approximately CHF 8,640. This leaves a gross Swiss salary of CHF 51,360. The federal, cantonal, and communal withholding tax varies, but assuming an average burden of 16%, it absorbs an additional CHF 8,200. The Swiss net salary drops to CHF 43,160.

…

Key points

Step by step: how to calculate the net 2026

Calculating the real net of a Swiss payslip requires systematicity. Here is the procedure.

Step 1: collect the gross contractual amount Start from the value declared in the Swiss employment contract. There are no surprises here: if the contract says 60,000 CHF per year, the gross is 60,000 CHF. You will divide by 12 or 13 if you are paid monthly or for 13 months.

Step 2: subtract the mandatory social contributions Apply the rates:

• AVS/AI/IPG: 5.3% of the gross
• AD/AC: 1.1% of the gross (up to a ceiling of CHF 148,200 of taxable income)
• LAINF: between 0.7% and 1.5% (variable by sector; consult your employer or the labor office)
• LPP: depends on age. From 25 years old, it starts at 7% and rises up to 18%. Your payslip will indicate the exact percentage for your age group.

The subtotal of these four items represents 15–18% of the initial gross. Example: 60,000 CHF × 14.5% (average) = CHF 8,700. Remaining CHF 51,300.

Step 3: estimate the withholding tax The federal, cantonal, and municipal tax varies for the canton of Ticino and for the place of residence / work. The average burden in Ticino is between 14% and 17% of the subtotal after contributions. On CHF 51,300: between CHF 7,182 and CHF 8,721. Subtract this amount from the subtotal. Estimated Swiss net: between CHF 42,579 and CHF 44,118.

…