Wage gap in Ticino: residents earn 1,157 francs more

Context

TL;DR

• Residents earn 19.4% more than cross-border workers in Ticino
• Wage gap widens to 32.2% for managerial positions
• Minimum wage raised to 3,547 francs in 2023
• New tax agreement impacts cross-border workers' net income

Key facts

• Median salary: 5,957 francs for residents, 4,800 francs for cross-border workers
• Wage gap: 1,157 francs or 19.4% difference
• Minimum wage: 3,547 francs gross monthly as of January 1, 2023
• Tax impact: 5-7% increase in tax burden for new cross-border workers
• Pure wage gap: 10.4% after accounting for objective factors
• Sector examples: Lugano: 6,500 vs 5,343 francs; Bellinzona: 5,200 vs 4,148 francs; Locarno: 7,000 vs 5,950 francs
• Canton Law: 2023: 5% minimum increase for residents in sectors with high cross-border presence
• Future scenario: Wage gap reduction to 5% could increase cross-border workers' gross salary to 5,060 francs

Official data confirms the wage gap

The Cantonal Office of Statistics (USTAT) has published updated data on wage dynamics in the private sector of Ticino. According to the study "Salaries of residents and cross-border workers in Ticino: what the 2024 data says," the median gross monthly salary stands at two distinct levels: 5,957 francs for residents and 4,800 francs for cross-border workers. This absolute gap of 1,157 francs represents a 19.4% difference, a figure in line with the previous four-year period.

The wage pyramid

The wage gap is not uniform across all income brackets. In managerial or highly qualified positions, the gap widens to 32.2% in favor of residents. For example, a resident manager in Lugano can earn a median salary of 12,000 francs, while a cross-border colleague from Varese stops at 8,000 francs. Conversely, for low wages, the difference is minimal, at 11.1%. This is because the introduction of the minimum wage, set at 3,547 francs gross monthly as of January 1, 2023, has pushed up the poorest wages, bringing the two groups closer together.

📊 Operational checklist for employers:

• Verify compliance with minimum wages for cross-border workers.
• Analyze wage policies to reduce the gap.
• Consider the tax impact on new cross-border workers.

History of the gap

Looking at the long term, the gap has increased compared to 2008 (when it was 13.6%). However, between 2020 and 2024, a slight contraction has been noted. The reasons for this partial narrowing are twofold: wage policies and the tax factor. The adjustment of legal minimums has raised the bar especially for cross-border workers, who occupy the lower-qualified sectors in greater numbers. For example, a construction worker from Mendrisio now earns at least 3,547 francs, compared to 3,200 francs in 2020.

💡 Practical example:

• A cross-border worker working in Bellinzona and residing in Como, with a salary of 5,000 francs, might see an increase in the tax burden of 5-7% due to the new tax agreement.

Furthermore, the new tax agreement, which taxes "new cross-border workers" both in Switzerland and in Italy, could push workers to negotiate higher salaries to compensate for the increased tax burden. For example, a cross-border employee residing in Ponte Chiasso and working in Chiasso might need to negotiate a raise to maintain the same purchasing power.

⚠️ Comparison between practical scenarios:

• Scenario A: A cross-border worker with a salary of 4,500 francs and residence in Como pays about 20% in taxes in Italy.
• Scenario B: With the new tax agreement, the same cross-border worker could pay 25% in taxes, pushing him to request a raise to 5,000 francs to maintain the same net income.

"The wage gap reflects differences in qualifications and market, but also wage and tax policies," says a USTAT expert.

These data highlight the need for a balanced approach between wage and tax policies to reduce the gap and ensure equity between residents and cross-border workers.

Operational details

Why do residents earn more?

But how much does the "status" of a cross-border worker really weigh on the paycheck? The Statistical Office of the Canton of Ticino (USTAT) tried to isolate this factor by comparing workers with the same characteristics (same age, experience, sector, and role). Result? The "pure" gap drops to 10.4%. This means that about half of the wage difference is due to objective factors (the type of work or experience), while the other half is linked to less tangible elements: negotiation skills, different economic needs, or, in some cases, disparities in treatment.

Practical Implications

The wage gap has significant implications for cross-border workers. For example, a cross-border worker who earns 4,800 francs gross per month, after taxes, might find themselves with a significantly lower net amount compared to a resident with the same gross salary. This can influence savings capacity and quality of life.

For residents, the gap represents an economic advantage, but also a challenge. The Canton of Ticino is trying to make sectors so far dominated by cross-border workers more appealing to residents (unemployed or low-skilled), hoping that the new salary ranges approved in Parliament can, over time, further balance the market.

Concrete Examples

• Lugano: A resident employee in a service company earns an average of 6,500 francs gross per month, while a cross-border worker with the same duties receives approximately 5,343 francs.
• Bellinzona: A resident construction worker has an average salary of 5,200 francs gross, compared to 4,148 francs for a cross-border colleague.
• Locarno: A resident teacher earns approximately 7,000 francs gross, while a cross-border worker receives 5,950 francs.

Regulations and Dates

• Canton Law of 2023: The Ticino Parliament has approved new salary ranges to encourage the hiring of residents. The new rules provide for a minimum increase of 5% for residents in sectors with a high presence of cross-border workers.
• Bilateral Agreements: The agreements between Switzerland and the EU provide that cross-border workers are treated fairly, but wage differences persist due to local factors.

Operational Checklist

• For cross-border workers:
• Check contractual conditions and compare salaries with resident colleagues.
• Consider negotiating the salary based on skills and experience.
• Find out about the tax benefits available for cross-border workers.

• For residents:
• Take advantage of new job opportunities in sectors traditionally dominated by cross-border workers.
• Participate in training programs offered by the Canton of Ticino to increase your competitiveness in the job market.
• Compare job offers and negotiate the salary based on the new salary ranges.

Comparisons between Practical Scenarios

• Current Scenario: A cross-border worker who earns 4,800 francs gross per month pays approximately 1,200 francs in taxes in Italy, remaining with a net of 3,600 francs. A resident with the same gross salary pays approximately 900 francs in taxes in Switzerland, remaining with a net of 3,900 francs.
• Future Scenario: If the wage gap were to reduce to 5%, a cross-border worker could earn up to 5,060 francs gross, with a net of 3,860 francs after taxes.

Future Scenario

If the wage gap were to further reduce, cross-border workers could benefit from higher salaries, getting closer to those of residents. However, this scenario will depend on various factors, including future salary policies and the evolution of the labor market.

"The goal is to create a more balanced labor market, where both groups can benefit from fair working conditions" — A representative of the Ticino Department of Economy.

📊 USTAT Data: The average wage gap in Ticino is 1,157 francs per month in favor of residents.

💡 Tip: Cross-border workers should monitor regulatory developments and take advantage of training opportunities to improve their negotiating position.

⚠️ Warning: Wage differences can vary significantly depending on the sector and the municipality of residence.

Recommended tools

For an updated estimate, use the net salary calculator and the CHF-EUR exchange comparator.

Key points

What to do if you are a cross-border worker

If you are a cross-border worker and want to better understand your salary and your options, there are some steps you can follow:

1. Compare your salary: Use the salary calculator to see how your salary compares to that of residents. For example, a cross-border worker in Lugano might earn around 6,000 francs per month, while a resident with the same qualifications might earn 7,157 francs. This salary gap is significant and deserves attention.

2. Understand taxes: Inform yourself about the taxes you pay both in Switzerland and in Italy. The new tax agreement of 2022 might influence your tax burden. For example, if you live in Como and work in Chiasso, you might benefit from a reduced tax rate compared to a resident of Chiasso. Use the tax calculator to get an accurate estimate.

3. Negotiate your salary: If your salary is lower than that of residents with the same qualifications, consider negotiating a raise. You can use USTAT data as a reference. For example, if you work in Bellinzona and have a university degree, your average salary should be around 7,500 francs per month. If you earn less, it's time to start negotiations.

4. Explore other opportunities: If your sector is dominated by cross-border workers, consider exploring other job opportunities that might offer higher salaries. For example, sectors such as IT and finance often offer higher salaries and fewer cross-border workers.

Useful Tools

To help you navigate the complex world of cross-border work, you can use several tools available on Frontaliere Ticino:

• Salary calculator: Compare your salary with that of residents.
• Tax calculator: Better understand your tax burden.
• Work permit guide: Inform yourself about your rights and duties as a cross-border worker.

Operational Checklist

1. Check your salary: Use the salary calculator to compare your salary with that of residents. 2. Calculate taxes: Use the tax calculator to understand your tax burden. 3. Prepare for negotiation: Gather data and references to support your request for a raise. 4. Explore other opportunities: Look for jobs in sectors with fewer cross-border workers and higher salaries.

Comparison of Practical Scenarios

📊 Scenario 1: A cross-border worker living in Varese and working in Mendrisio earns 5,800 francs per month. Using the salary calculator, they discover that a resident with the same qualifications earns 6,957 francs. With negotiation, they could increase their salary by 15%.

📊 Scenario 2: A cross-border worker living in Como and working in Lugano earns 6,200 francs per month. Using the tax calculator, they discover that their tax burden is 22%. With the new tax agreement, they could reduce their tax burden to 18%.

With this information and tools, you can make more informed decisions and improve your economic situation.

Source: comozero.it