What happens to my payroll tax if I am a cross-border commuter?

Withholding tax is withheld exclusively in Switzerland by your employer. Italy avoids double taxation through the tax credit in the EC framework of the 730 return. If you have been working as a cross-border commuter with a G permit since 2024, you benefit from an exemption of CHF 7,500 per year (if you were already a cross-border commuter before 17 July 2023) or CHF 10,000 (if you are a new cross-border commuter). The Italy-Switzerland Convention of 9 December 1976 regulates this discipline.

What are the mandatory contributions that are withheld from my paycheck?

The mandatory contributions are: AHV/IV at 5.3% (payable by the employee), UVG (accident insurance) from 0.7% to 1.5%, and BVG (pension fund) from 7% to 18% depending on your age group. All are deducted directly from the Swiss paycheck. In addition, registration with KVG (Swiss health insurance) is compulsory with deductibles of CHF 300 to CHF 2,500 per year for adults.

How does the tax return work if they are cross-border commuters?

By 30 April of each year, fill in the Italian 730 form including the EC framework (tax credit for cross-border commuters). This makes it possible to recover any excess taxation withheld in Switzerland. If Swiss taxation is lower than Italy's, the EC framework generates a refund. Always keep Swiss documents (tax certificates, AFI account statements) for any audits by the Revenue Agency.

Can I choose whether to keep the Italian health insurance or take the Swiss KVG?

Yes, cross-border commuters with a G permit have the right of choice. You can keep the Italian insurance (INPS) or switch to the Swiss KVG. Please consider carefully: KVG covers benefits in Switzerland and offers comprehensive protection, but with deductibles of CHF 300-2,500 per year for adults; the Italian insurance company has less protection for treatment received in Switzerland. Check international coverage according to your health profile.

Is it worth living in Italy and working in Ticino?

It depends on your personal profile. If the Italian cost of living attracts you and the Swiss salary compensates for it, it may be worthwhile. However, count daily commuting times, transport costs, and duplicate bureaucracy (Italy and Switzerland declarations). Each cross-border commuter has different situations: use the Frontaliere Ticino calculator to simulate your real net and compare it with the expenses of the chosen area.

Living in Cavaria, working in Ticino: cross-border commuter guide (cross-border guide)

Di Redazione Frontaliere Ticino · Published on 21 August 2026

View of Mendrisio, Ticino border town on the Italy-Switzerland border with Alpine landscape

Tax legislation, withholding tax, AHV and BVG contributions: the complete guide for cross-border commuters who choose to live in Cavaria con Premezzo and work in Ticino as employees.

Context

In short

Withholding tax withheld only in Switzerland for cross-border commuters with G permit
New Cross-Border Workers Agreement in force from 1 January 2024
Old cross-border commuters: exemption CHF 7,500 per year, new ones: CHF 10,000
AVS (5.3%), LPP (7-18%) and mandatory KVG

Key facts

What: New tax and contribution regime for Ticino-Italy cross-border commuters
When: Effective January 1, 2024
Where: Canton Ticino, border areas with Lombardy
Who: Cross-border workers with G permit
Exemption: CHF 7'500 (cross-border workers before 17 July 2023), CHF 10'000 (new)
Tax: Withheld exclusively in Switzerland
Convention: Italy-Switzerland, signed 9 December 1976

Living in Cavaria con Premezzo and working in Ticino as a cross-border worker means operating according to precise legislation that regulates taxation, social contributions and residence permits. Starting from 1 January 2024, the New Cross-border Agreement (signed on 23 December 2020 and ratified by Italy with Law 83 of 13 June 2023) has introduced substantial innovations for those who choose cross-border commuting.

Cross-border worker taxation

For cross-border commuters with G Permit, withholding tax on earned income is withheld exclusively in Switzerland. Italy avoids double taxation through the tax credit in the EC framework of the annual 730 declaration. Cross-border workers who were already working before 17 July 2023 benefit from an exemption of CHF 7,500 per year, with a transitional regime from 2024 to 2033. Anyone who moves as a new cross-border worker is entitled to an exemption of CHF 10,000. The Convention against double taxation between Italy and Switzerland (signed on 9 December 1976) provides the legal basis for this discipline.

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Operational details

Choosing the border area: advantages of Italian residency

Living in Cavaria con Premezzo, as in other Lombard border communities, offers concrete economic advantages. The cost of living (rents, food, utilities, services) is typically lower than in Ticino. For those who work in Switzerland, this means maintaining their Swiss salary (on average higher than Italian salaries) while incurring reduced daily expenses. The community of cross-border workers in border areas is consolidated: there are administrative offices aware of cross-border needs, specific banking services and often an informal network of those who have already faced the transfer. This facilitates practical integration and reduces bureaucratic isolation.

Disadvantages and hidden costs

Daily commuting involves concrete transport costs (fuel, vehicle, maintenance, or train passes) and daily travel time to the Ticino work centers (Lugano, Bellinzona, Mendrisio). Even though Cavaria is a border area, the journey to the company headquarters requires constant planning. The bureaucracy is double: annual Italian income tax return (730 with EC framework for cross-border workers), possible payment of supplementary INPS contributions if self-employed, parallel management of health insurance between the two systems. Furthermore, the EUR/CHF currency differential affects family expenses, savings and long-term investments.

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Key points

Before moving: the cross-border worker's checklist

Moving as a cross-border worker requires methodical preparation. First, make sure you have an employment contract with a Ticino company (or at least a signed offer). The Swiss employer manages the withholding tax directly from the pay slip and communicates the data to the cantonal tax system. Request the G Permit from the SEM (State Secretariat for Migration) through your employer: the permit allows daily commuting and is valid for several years. Register at the Italian registry office of your new residence and notify the change of residence to the Italian Revenue Agency. Check if your current bank offers cross-border services, otherwise consider an account designed for cross-border commuters.

Tax returns and refunds

Every year, by April 30th, fill out the Italian form 730 including the CE framework (tax credit for cross-border workers). This allows you to recover any tax excesses or obtain refunds due. If you reside in Italy but work in Ticino, the canton of Ticino administers cantonal and municipal taxation on your paycheck via the AFC (Federal Tax Administration). Always keep copies of Swiss documents (tax certificates, account statements, AFI documents) as they may be requested by the Italian authorities in the event of checks or clarifications on double taxation.

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Frequently Asked Questions

What happens to my payroll tax if I am a cross-border commuter?: Withholding tax is withheld exclusively in Switzerland by your employer. Italy avoids double taxation through the tax credit in the EC framework of the 730 return. If you have been working as a cross-border commuter with a G permit since 2024, you benefit from an exemption of CHF 7,500 per year (if you were already a cross-border commuter before 17 July 2023) or CHF 10,000 (if you are a new cross-border commuter). The Italy-Switzerland Convention of 9 December 1976 regulates this discipline.
What are the mandatory contributions that are withheld from my paycheck?: The mandatory contributions are: AHV/IV at 5.3% (payable by the employee), UVG (accident insurance) from 0.7% to 1.5%, and BVG (pension fund) from 7% to 18% depending on your age group. All are deducted directly from the Swiss paycheck. In addition, registration with KVG (Swiss health insurance) is compulsory with deductibles of CHF 300 to CHF 2,500 per year for adults.
How does the tax return work if they are cross-border commuters?: By 30 April of each year, fill in the Italian 730 form including the EC framework (tax credit for cross-border commuters). This makes it possible to recover any excess taxation withheld in Switzerland. If Swiss taxation is lower than Italy's, the EC framework generates a refund. Always keep Swiss documents (tax certificates, AFI account statements) for any audits by the Revenue Agency.
Can I choose whether to keep the Italian health insurance or take the Swiss KVG?: Yes, cross-border commuters with a G permit have the right of choice. You can keep the Italian insurance (INPS) or switch to the Swiss KVG. Please consider carefully: KVG covers benefits in Switzerland and offers comprehensive protection, but with deductibles of CHF 300-2,500 per year for adults; the Italian insurance company has less protection for treatment received in Switzerland. Check international coverage according to your health profile.
Is it worth living in Italy and working in Ticino?: It depends on your personal profile. If the Italian cost of living attracts you and the Swiss salary compensates for it, it may be worthwhile. However, count daily commuting times, transport costs, and duplicate bureaucracy (Italy and Switzerland declarations). Each cross-border commuter has different situations: use the Frontaliere Ticino calculator to simulate your real net and compare it with the expenses of the chosen area.