Border pension calculation: AVS + INPS (cross-border guide)

Context

In a nutshell

• The border pension combines Swiss AVS + Italian INPS contributions through totalization
• The new tax agreement came into force on 1 January 2024
• The pension rights acquired remain protected by the right of aggregation

Key facts

• What: Totalisation of the pension between the two social security systems
• When: Effective January 1, 2024 (new agreement of December 23, 2020)
• Where: Border workers working in Switzerland and residing in Italy
• Who: INPS Administration (Italy) and cantonal AVS offices (Switzerland)
• Entitlement: Cumulation of contributions for pension calculation in both countries
• AVS rate: 5.3% for employees (mandatory contribution)
• Retirement age: 64 years old women, 65 years old men (in Switzerland)

For the Ticino border worker who works in Switzerland and resides in Italy, the pension is not a simple calculation: the system is double, with different rules between Swiss AVS and Italian INPS, but offset by a totalization mechanism that protects the rights acquired in both countries.

The new tax agreement between Switzerland and Italy, signed on 23 December 2020 and entered into force on 1 January 2024, has changed the rules on taxes and duties for those working across borders. But the right to total pension, recognised by the Double Taxation Convention of 9 December 1976, remains the basis on which the social security protection of the border worker rests.

How the double works

Operational details

Contributions and rates in the Swiss system

In Switzerland, the employee pays 5.3% of the salary for the AVS/AI/IPG (old-age pension, disability, lost earnings). Added to this are other contributions: AD/AC (unemployment) at 1.1%, up to a limit of CHF 148,200, and LAINF (accident insurance) between 0.7% and 1.5%. The second pillar (LPP) varies according to age: from 25 years old onwards, it ranges from 7% to 18% depending on the age group, with contributions from both the employee and the employer.

Those residing in Italy, moreover, are subject to IRPEF (income tax) with progressive rates: 23% up to €28,000, 35% between €28,001 and €50,000, 43% over €50,000. The tax at source on employees is withheld in Switzerland (to avoid double taxation), and the border worker declares income in Italy using form 730, with a tax credit in the EC framework.

How the two systems integrate

The calculation of the pension for the border worker is divided into three phases:

• Part AVS/INPS: The number of years of contribution in Switzerland and Italy is counted separately, but the minimum time required in either country is valid to purchase the right to a pension.
• Proportional amount: Each system calculates a pension based on the contributions actually paid in its years of affiliation. Then the total is divided between the two countries in proportion to the number of contributing years.
• Protection for

Useful tools for your case

To verify your within/over 20 km tax scenario, use the net salary calculator and the tax return guide.

Key points

Pension Request Timeline

The AVS pension request in Switzerland must be submitted approximately 3-4 months before the planned retirement date (ordinary age is 64 for women and 65 for men, subject to voluntary postponements). The form must be completed at the AVS cantonal office (in Ticino, at the taxpayer's office or through the online portal).

In parallel, the border worker must submit a request to the INPS for the Italian pension (or for the payment of Swiss contributions, through the A027 form to be sent to the Italian Revenue Agency or directly to the INPS). Processing times vary: the Swiss AVS usually pays the first installment within 2-3 months from the start of entitlement; the INPS in Italy has times that can reach up to 4-6 months.

Documents and Operational Steps

1. Document collection: Italian residence certificate, copy of the employment book (or Swiss employment certificate), AVS affiliation certificate from Swiss payroll slips. 2. Present the AVS request: Online or at the Ticino cantonal office. 3. INPS communication: Through the SR163 form (pension request) and the A027 form (totalization of contributions). 4. Verification of position: Request an extract of the insurance account both in Switzerland (at the AVS office) and in Italy (at the INPS online). 5. Monitoring of payment: Follow the status of the practice online through the portals of the AVS and the INPS.

Those who have the right to option for the G permit (like many border workers), must check that their affiliation to the health insurance (LAMal) in Switzerland does not create conflicts in the declaration of residence during the pension process.

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