Full analysis of the 2026 Swiss payroll for border workers (cross-border guide)

Context

In a nutshell

Switzerland has introduced a new Frontier Agreement, valid from 1 January 2024, which avoids double taxation with the tax credit (EC framework of 730). Old frontiersmen are entitled to a discount of 7,500francs, while new frontiermen have a deductible of 10,000 francs.

Full analysis of the 2026 Swiss payroll for border workers

For a Ticino frontier worker, the Swiss paycheck could undergo some changes starting in 2026. Here are some concrete examples with real numbers, references to specific municipalities in Ticino, regulations with dates and amounts, and an operational checklist:

1. New frontier workers: New frontier workers will benefit from a deductible of 10,000francs, which can be used to pay Swiss taxes and duties. For higher amounts, the tax credit is applied automatically and will be refunded according to the EC framework of 730. For example, if a frontier worker buys a new car for 25,000francs, the tax credit of 10,000 francs will be refunded automatically, while the rest will have to be paid in taxes.

2. Old frontier workers: Old frontier workers are entitled to a discount of CHF 7,500 on income tax. For example, if a frontier worker receives an annual income of CHF 100,000, his discount will be CHF7,500. This discount can be used to pay Swiss taxes and duties in order to reduce the overall tax burden.

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Operational details

Switzerland has a system of taxation based on labour income, with withholdings and contributions applied to frontier workers. Italy, on the other hand, avoids double taxation with the tax credit (EC framework of 730). The new Frontier Agreement was signed on 23/12/2020 and is in force from 1 January 2024.

Key facts

• What: Switzerland avoids double taxation with the tax credit (EC framework of 730) for border workers.
• When: 1 January 2024
• Where: Switzerland
• Who: Frontiersmen
• Amount: Exemption (non-payment) for border workers with income up to €7,500 (on 1 January 2026). Excess of €10,000 for frontier workers with an income of more than €7,500 (on 1 January 2026).

2026 Swiss payroll analysis for border workers

The new Frontier Agreement will introduce important tax changes and simplifications for frontier workers working in Switzerland. Here are some concrete examples with real numbers and references to specific common Ticinese:

• Exemption: For frontier workers with an income of less than €7,500 (on 1 January 2026), Switzerland will not charge taxes on the income paid by the Italian company.
• Deductible: For frontier workers with an income of more than €7,500, the deductible amounts to €10,000. For subsequent years, the deductible will be calculated semi-annually on the basis of the income actually quaternized in Switzerland.

For frontier workers, the new EC framework of 730 provides for a new progressive taxation at 32% for

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Key points

Full analysis of the 2026 Swiss payroll for border workers

With a full understanding of the rules on taxation and withholding in Switzerland, border workers can better manage their paycheck and minimize any errors. The taxation system in Switzerland is based on labour income, with withholdings and contributions applied to frontier workers. Switzerland complies with EU rules, but has a more liberal tax policy than Italy.

The tax credit (EC framework of 730) avoids double taxation with Italy, guaranteeing a more convenient taxation for border workers. However, it is important to be aware of some differences between the two tax systems.

Example 1: Suppose an Italian frontier worker with a working income of €60,000 gross works in Switzerland. In Switzerland, after paying labour income tax (IRL) and compulsory health insurance (ASO), the part of labour income that has not been withheld is €45,000. In Italy, after paying the personal income tax, the part of the income from work that has not been withheld is 54,000 euros. The tax credit (EC framework of 730) allows Italy to charge only 39,400 euros abroad, while the Italian border worker can deduct 10,600 euros from personal income tax.

Taxation and Withholding Rules

The AFC/ESTV website provides detailed information on the rules on taxation and withholding in Switzerland.

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