Border payroll 2026: actual net and New Deal

Context

In brief

• Deduct only from Swiss income, never from Italian income to avoid double taxation
• New Frontier Agreement from January 1, 2024: exemption of €7,500 (old) or €10,000 (new frontiersmen)
• Mandatory contributions: AVS/AI/IPG 5.3%, LPP 7-18%, LAINF 0.7-1.5%, unemployment insurance 1.1%

Key facts

• What: Structure of the Swiss pay slip and calculation of net income for Italian frontiersmen
• When: In force from January 1, 2024 (New Frontier Agreement)
• Where: Frontiersmen in the canton of Ticino with a G permit (Italian residence, Swiss work)
• Who: Ticino cantonal administrations and AFC (Federal Administration of Contributions)
• AVS/AI/IPG quota: 5.3% deducted from gross
• LPP (second pillar): 7-18% based on age (from 25 years)
• Annual exemption: €7,500 (old frontiersmen before July 17, 2023) or €10,000 (new)

The frontierman who works in Switzerland with a G permit has a special tax status: the pay slip tax is not paid in double (Switzerland and Italy), but mainly in Switzerland through withholding at the source, while Italy recognizes a tax credit in the annual declaration (model 730, CE form). This mechanism is established by the 1976 Italian-Swiss Convention signed on March 9, 1976 and remains unchanged.

From January 1, 2024, the New Frontier Agreement (signed on December 23, 2020, ratified by Italy with Law 83 of June 13, 2023) has introduced a regime of income protection: the withholding tax applies to a reduced taxable base for a transitional period until 2033.

How the pay slip changes with the New Agreement

For frontiersmen already registered before July 17, 2023 (old frontiersmen): the taxable base in Switzerland is reduced by €7,500 per year. The cantonal tax is therefore calculated on a lower base, reducing the amount withheld by the employer each month. For frontiersmen registered after July 17, 2023 (new): the exemption is €10,000 per year, a more favorable amount applied from the first day.

In transitional regime until 2033, this exemption protects the income from work frontiersmen progressively, with provision for further increases in the following years, according to the calendar established by the Agreement.

What makes up the real net

From the monthly gross income declared in the pay slip, the Swiss employer applies these elements: Mandatory contributions for Swiss social protection: AVS/AI/IPG (old-age, disability, guaranteed income) 5.3% fixed; Unemployment insurance (AD/AC) 1.1% up to CHF 148,200 per year; LAINF (non-professional accident coverage) 0.7-1.5%; LPP (second pillar, pension fund) 7-18% based on age (from 25 years); LAMal (mandatory health insurance) with contributions CHF 300-2,500 per year based on the insurer, or option to remain registered with the Italian INPS if frontierman with a G permit. Withholding tax (federal + cantonal): Switzerland applies a variable rate by canton and by municipality. In the canton of Ticino, municipalities such as Bellinzona, Lugano, Locarno, Mendrisio, Chiasso have different rates because there is no single national percentage. The Cantonal Office of Contributions (AFC/ESTV) calculates and communicates the specific rate for each income situation. Importance in practice: the real net is the result of all these deductions. The actual payment to the frontierman is significantly lower than the declared gross income due to these deductions.

Italy does NOT deduct from the Swiss pay slip

A critical point: Italy does not apply any direct withholding on the Swiss pay slip of the frontierman. The IRPEF Italian (23%, 33%, 43% in progression) is paid in the annual declaration of income (model 730), after the frontierman has checked the Swiss tax already paid. In the 730, the frontierman declares the Swiss gross income in the CE form and attaches the Swiss Tax Certificate. The Revenue Agency calculates the IRPEF Italian and grants a tax credit for what has already been paid in Switzerland. If the Swiss tax is higher, the frontierman is entitled to a refund (ristorno). If it is lower, the frontierman pays the difference in Italy. This is the crucial advantage compared to an Italian resident who works in Italy: avoids double payment.

If you want to estimate your monthly net income in a few seconds, use our pay slip calculator: enter the gross income, the Ticino canton of work and your status (old or new frontierman from July 17, 2023) to get a quick forecast.

Operational details

How the New Border Agreement Reduces Tax from 2024

Before January 1, 2024, the border worker paid source tax on the entire gross, without special normative shields beyond the usual Swiss credits and deductions (stock portfolio, union contributions, etc.). The only advantage was the tax credit in the 730.

From January 1, 2024, the Agreement introduces a partial exemption regime from taxable income in Switzerland, which does not exist in any other EU country for border workers:

For old border workers (active G permit before July 17, 2023): the taxable income in Switzerland for source tax is Gross minus €7,500 per year (transitional regime 2024-2033). If the gross is CHF 60,000 per year, the federal and cantonal tax is calculated on CHF 52,500, significantly reducing what is collected.

For new border workers (registered from July 17, 2023 onwards): the taxable income is Gross minus €10,000 per year, a more favorable amount from the first day of work in Switzerland.

The transitional regime means that the amount of the exemption may increase in the following years according to the Agreement's calendar, always to the benefit of the border worker.

Attention: the exemption does not cover social contributions

A crucial aspect often misunderstood: the exemption of €7,500 or €10,000 reduces ONLY the taxable income for source tax (federal and cantonal taxes), NOT the compulsory social contributions managed by SECO/UFSP/SUVA.

Therefore, even with the exemption in force: AVS/AI/IPG remains 5.3% on the entire gross; LPP (second pillar) remains 7-18% of the entire gross; LAINF and unemployment insurance remain applied to the full gross. The exemption is not a reduction of the gross, but a reduction of the taxable income for taxes. Social protection remains complete.

The role of the 730 and tax credit in planning

The Italian declaration (model 730) remains mandatory for every border worker, regardless of income or number of months worked in Switzerland. In the CE framework, the border worker declares: the gross income from dependent work in Switzerland; the Swiss source tax obtained from the Certificate of Imposition or from the employer's communication; the Italian Revenue Agency applies the progressive IRPEF (23-43% depending on the range) and recognizes the tax credit for the Swiss tax already paid.

The New Agreement does not modify this mechanism: the 730 remains mandatory, the tax credit remains valid, but since the exemption reduces the initial Swiss tax, the available tax credit may be slightly lower than in the past. This is not a disadvantage: it means that the border worker pays less tax in Switzerland and the total (CH + IT) remains advantageous.

In practice, border workers with modest incomes (under €50,000 per year) often obtain significant refunds in the 730 because the Swiss tax is lower than the Italian IRPEF.

To fill out the model 730 with the CE framework, attach the Swiss Certificate of Imposition and declare the exemption of the New Agreement if applicable to your work period.

Key points

Procedure and steps to calculate your real net income

As a frontier worker, your real net income depends on various variables that need to be actively verified every year. It is not an automatic calculation; it requires administrative awareness.

Step 1: Check your status as a new or old frontier worker

The date of issue of the G Permit in your passport is crucial for the amount of the exemption: G Permit issued before July 17, 2023 → exemption of CHF 7,500 per year (transitional regime 2024-2033); G Permit issued from July 17, 2023 onwards → exemption of CHF 10,000 per year.

Required documents: copy of G Permit, Italian residence certificate from the Italian municipality of residence, Swiss employer's documentation indicating the start date of employment.

Step 2: Analyze each item on your Swiss salary slip

There is no "net income equal for all." Each Ticinese municipality has a different tax rate. Here's what to check month by month: gross income declared (base for calculation); federal income tax (applied by AFC/ESTV according to federal tax rates); cantonal tax (varies by workplace municipality: Bellinzona, Lugano, Locarno, Mendrisio, Chiasso, etc.); AVS/AI/IPG (5.3% fixed of gross income); LPP according to the second pillar (7-18% depending on age); LAINF (0.7-1.5% on insured basis); unemployment insurance (1.1% up to CHF 148,200 annual cap); LAMal (if you are registered with the Swiss insurance, it is a fixed annual contribution of CHF 300-2,500; if you are in option with the Italian INPS, the employer does not deduct it).

If the employer does not communicate the exact tax rate applied, you can verify it autonomously through the AFC/ESTV website (Federal Administration of Contributions, Ticino section) or in person.

Step 3: Gather documentation for the Italian 730 form

Even if you work 100% in Switzerland, it is mandatory. Required documents: Swiss Certificate of Taxation (CIT), provided by the employer or downloadable from the AFC/ESTV online platform with personal credentials; Employer's communication (gross income, tax withheld, contributions paid); Italian residence certificate (to prove your fiscal domicile in Italy).

Step 4: Fill out the 730 form and verify the Italian refund or debt

The procedure is simple: contact an accredited CAF (Tax Assistance Centre) in your province of residence (Como, Varese, Novara, or other border provinces) or a specialized accountant for frontier workers; provide Swiss documentation + personal and financial data; the CAF will fill out the 730 model with the Swiss income in the CE section and attach the Swiss Certificate of Taxation; declare the amount of the exemption of the New Agreement (CHF 7,500 or CHF 10,000, divided by the actual months of work in 2026 if it is not the first year); the Italian Revenue Agency will calculate the Italian income tax and the tax credit; if refund, the money will be credited to the indicated bank account (usually from November to January of the following year); if debt, you will receive communication of the times and methods of payment.

Step 5: Plan your monthly budget considering your real net income

Net income is not all disposable income. As a frontier worker, you must consider: transit costs (gasoline to the Chiasso, Brogeda, Gaggiolo border crossings; any tolls on the A2/A9 motorways at your expense or your employer's); car insurance (if you use your private car to reach Switzerland); emergency fund (Swiss net income is higher than the average Italian net income, but the volatility of the CHF/EUR exchange rate should be considered).

Real net income is: Gross income – (AVS 5.3% + LPP% + LAINF% + Unemployment insurance 1.1% + Federal/cantonal tax) – Optional deductions.

To quickly calculate your net income without consulting an accountant (first round), use our salary slip simulator: enter your gross income, select your workplace canton (Ticino) and your frontier worker status (old or new from July 17, 2023), and in a few seconds you will have an approximation of your monthly net income. It is not a substitute for official advice, but it is an excellent initial compass.