In which country is my income from working as a border worker taxed?

Switzerland is the country where withholding tax is applied on cross-border work income. According to the Italian-Swiss Convention of 9 December 1976, taxation is the responsibility of the State in which the work is performed. Italy does not apply a second federal tax, but uses the 730 CE tax credit to offset taxes already paid in Switzerland. This system avoids double taxation.

What are the rates of Swiss contributions and taxes that are withheld from me?

As a border employee in Switzerland, you pay: AVS/AI/IPG 5.3%, AD/AC 1.1% (up to CHF 148'200), LAINF 0.7–1.5%, and LPP (pension fund) from 7% to 18% depending on age (from 25 years). To these are added cantonal income taxes, which vary by canton. The → net gross total is significant, which is why the CHF-EUR exchange rate has a real impact on your purchasing power.

Does the 2024 New Frontier Agreement change the way I change money?

No, the New Frontier Agreement (in force from 1 January 2024) modifies taxation and introduces deductibles (€7,500 for old frontiersmen, €10,000 for new ones), but does not change the currency exchange system. However, clarification of border rights and status has prompted banks to offer more dedicated products, such as multi-currency accounts, that facilitate smart foreign exchange management.

How to exchange euro from CHF: bank or digital platform?

Always compare the spread (difference between mid-market rate and offered rate). A traditional bank applies spreads of 0.5–2%, while digital platforms often offer 0.2–0.5%. For CHF 2'900 per month, saving 0.3% spread means about €100 per year. Use a multi-currency account at your Swiss bank (if it offers competitive rates) or a specialized platform for smaller conversions.

How do I declare foreign income in 730 if I have changed CHF to EUR at different rates?

Declares the gross income in CHF converted at the average exchange rate of the year published by the Bank of Italy or by OSCE-authorized sources. You cannot use the change of the day of the transaction. Calculate the arithmetic average of the monthly average exchange rates at the end of the year and use that value in the CE framework of the model 730.

Euro franc exchange rate: is it really worth it? (cross-border guide)

Di Marco Ferrari · Published on 3 September 2026

Financial advisor explains EUR-CHF exchange strategies to cross-border workers in modern Mendrisio office

Swiss source tax and Italian personal income tax weigh on the net. Find out how the CHF-EUR change impacts border pay and what strategies to adopt.

Context

In brief

Swiss withholding tax: direct deduction from employment income
New Cross-Border Workers Agreement from January 1, 2024: exemption of €7'500 for old cross-border workers
CHF-EUR exchange rate: crucial choice to maximize actual net income
Exchange strategies: timing and platform determine results

Key facts

What: Hybrid tax system CH-IT + currency exchange for cross-border workers
When: From January 1, 2024 (new agreement in force)
Where: Switzerland (withholding) and Italy (IRPEF and tax credit)
Who: Cross-border workers with Permit G
AVS rate: 5.3% (employee social contributions)
LAMal deductible: CHF 300–2500 adults

The cross-border worker who works in Switzerland and lives in Italy faces a dual challenge: Swiss taxes on every salary and currency exchange to have money in euros. This is not a subtle accounting issue — it is a concrete impact on the monthly wallet.

Starting from January 1, 2024, the New Cross-Border Workers Agreement has changed the taxation rules. "Old" cross-border workers (already such before July 17, 2023) benefit from an annual exemption of €7'500, with a transitional regime from 2024 to 2033. New cross-border workers, on the other hand, have a deductible of €10'000. But these benefits do not eliminate Swiss withholding taxes: the tax on salaries and social contributions remains applied directly to gross income in the Canton where you work.

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Operational details

The tax impact of the exchange rate choice

A common mistake is to believe that the exchange rate is a matter of speculation or short-term timing. It is not — at least not for the cross-border worker who simply converts their salary. The real impact is the hidden cost of conversion, that is, the difference between the mid-market rate (real interbank rate) and the rate applied by the bank or platform.

Let's return to our cross-border worker with CHF 2'900 net monthly. A traditional bank might apply an exchange rate of 0.90 (a spread of 0.02 compared to the mid-market rate of 0.92). The hidden cost: €58 per month, or €696 per year. A digital platform might offer 0.918 (spread 0.002), reducing the cost to €6 per month, or €72 per year. The annual difference is €624.

This calculation does not take into account Italian taxation. The cross-border worker must declare their worldwide income, including foreign income. In Italy, foreign employment income is taxed according to IRPEF rates (23% up to €28'000, 35% from €28'001 to €50'000, 43% over €50'000). The tax credit mitigates the effect, but only up to the point of what has already been paid in Switzerland. If the cross-border worker has earned CHF 54'000 gross annually (CHF 4'500 per month), they will have paid approximately CHF 11'000–13'000 in taxes and contributions in Switzerland. In Italy, on CHF 54'000 converted to EUR according to the average exchange rate of the year, they will have an IRPEF taxable base. If the average exchange rate has been 0.91, the declared income is approximately €49'140. The IRPEF of 35% (approximate for that range) would be approximately €17'200; the tax credit of €11'000 reduces it to €6'200. Total paid in CH + IT: approximately €17'200–19'200.

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Key points

Practical procedure: how and when to change

If you are a cross-border worker and receive your salary in CHF, here are the concrete steps to manage the euro-franc exchange effectively.

Step 1: Evaluate your account options

Contact your Swiss bank (where you receive your salary) and ask if they offer multi-currency accounts. If so, ensure that:

It allows you to hold CHF and EUR without immediate conversion
It offers competitive exchange rates (mid-market or spread <0.5%) for internal transfers
It does not apply hidden fees for currency transfers

If your Swiss bank does not offer this option, consider specialized digital platforms — but before using them, verify their exact fees and published rates.

Step 2: Decide the frequency of exchange

Some cross-border workers change once a month (upon receiving their paycheck). Others only change the amount needed to cover monthly expenses in Italy. A pragmatic strategy involves:

Maintaining a CHF "buffer" fund equal to 2–3 months of net income (for emergencies)
Changing 70–80% of your net salary to EUR monthly
Leaving the rest in CHF for expenses in Switzerland (gas, car insurance, parking) or for savings

This diversification reduces the risk of being fully exposed to an unfavorable exchange rate in a given month.

Step 3: Track the annual average exchange rate for tax declaration

When you fill out the 730 form in Italy, you must declare your foreign income in EUR. The Italian Revenue Agency accepts the average exchange rate of the year published by the Bank of Italy or OSCE-authorized sources. You cannot use the exchange rate of the conversion day — you must use the average.

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Frequently Asked Questions

In which country is my income from working as a border worker taxed?: Switzerland is the country where withholding tax is applied on cross-border work income. According to the Italian-Swiss Convention of 9 December 1976, taxation is the responsibility of the State in which the work is performed. Italy does not apply a second federal tax, but uses the 730 CE tax credit to offset taxes already paid in Switzerland. This system avoids double taxation.
What are the rates of Swiss contributions and taxes that are withheld from me?: As a border employee in Switzerland, you pay: AVS/AI/IPG 5.3%, AD/AC 1.1% (up to CHF 148'200), LAINF 0.7–1.5%, and LPP (pension fund) from 7% to 18% depending on age (from 25 years). To these are added cantonal income taxes, which vary by canton. The → net gross total is significant, which is why the CHF-EUR exchange rate has a real impact on your purchasing power.
Does the 2024 New Frontier Agreement change the way I change money?: No, the New Frontier Agreement (in force from 1 January 2024) modifies taxation and introduces deductibles (€7,500 for old frontiersmen, €10,000 for new ones), but does not change the currency exchange system. However, clarification of border rights and status has prompted banks to offer more dedicated products, such as multi-currency accounts, that facilitate smart foreign exchange management.
How to exchange euro from CHF: bank or digital platform?: Always compare the spread (difference between mid-market rate and offered rate). A traditional bank applies spreads of 0.5–2%, while digital platforms often offer 0.2–0.5%. For CHF 2'900 per month, saving 0.3% spread means about €100 per year. Use a multi-currency account at your Swiss bank (if it offers competitive rates) or a specialized platform for smaller conversions.
How do I declare foreign income in 730 if I have changed CHF to EUR at different rates?: Declares the gross income in CHF converted at the average exchange rate of the year published by the Bank of Italy or by OSCE-authorized sources. You cannot use the change of the day of the transaction. Calculate the arithmetic average of the monthly average exchange rates at the end of the year and use that value in the CE framework of the model 730.