Working as a chalker in Ticino: a guide for border workers

Context

TL;DR

• The New Cross-Border Commuter Agreement is applied from 1 January 2024.
• Withholding tax is withheld in Switzerland.
• A G permit is required to carry out the activity in Ticino.
• The AHV/IV/EO contribution payable by the employee is 5.3%.

Key facts

• What: Profession of pinstripe for border workers.
• When: New Border Agreement operational from 1 January 2024.
• Where: Canton of Ticino, Switzerland.
• Who: Swiss border workers and employers.
• Amount: AHV / AI / IPG employee 5.3%; AD / AC 1.1% up to CHF 148,200.

The Ticino construction sector represents an important opportunity for specialized professionals, such as plasterers, who reside in Italy and wish to undertake a career path in the Canton of Ticino. Since January 1, 2024, the regulatory landscape has changed following the entry into force of the new tax agreement between Italy and Switzerland, signed on December 23, 2020 and ratified by Law 83 of June 13, 2023. This legislation has redefined the methods of taxation of income from employment for cross-border workers, consolidating the principle of taxation in Switzerland, while Italy provides for the avoidance of double taxation through the EC tax credit under model 730.

Regulation and permits

In order to operate regularly on the territory of Ticino, the frontier worker must be in possession of the permit G, issued by the competent cantonal authorities. The Swiss employer plays a central role in supporting the employee in the application process at the [Migration Office] (https://www4.ti.ch/index.php?id=122090) of the Department of Institutions. The transitional regime of Article 9 of the Agreement applies only to those who meet the conventional definition and worked in Graubünden, Ticino or Valais between 31 December 2018 and 17 July 2023; the covered employment income is taxed exclusively in Switzerland. In other cases, the ordinary regime applies, with Italian taxation and credit for Swiss tax. The 10,000 euros of Article 4 L. 83/2023 are only the limit for income referred to in Article 1, paragraph 175, L. 147/2013, not a general deductible. [AFC Card] (https://www.estv.admin.ch/dam/it/sd-web/Zbr5Jb-40aYm/int-laender-it-faktenblatt-faqs-it.pdf) · [Agreement, Art. 9] (https://www.fedlex.admin.ch/eli/cc/2023/410/it) * Standard, art. 4. The Swiss tax system, managed by the Federal Tax Administration (FTA/ESTV) and the cantonal administrations, provides for the levy of withholding tax directly on the payroll.

Operational details

The practical analysis for a plasterer evaluating a job in Ticino must carefully consider the structure of social security contributions, which differs significantly from the Italian one. The Swiss paycheck is subject to mandatory deductions which guarantee AVS (old age and survivors insurance), AI (disability insurance) and IPG (compensation for loss of earnings) coverage, with a rate to be paid by the employee set at 5.3%. As regards unemployment insurance (AD/AC), the rate is 1.1% applied up to a maximum of CHF 148,200. It is important to underline that occupational pension provision (LPP) represents a fundamental pillar, with contribution rates that vary according to age group from the age of 25, and that the employer is required to cover at least half of the total contribution. LAINF (accident insurance) entails further deductions which fluctuate between 0.7% and 1.5% depending on the dangerousness of the task performed, a particularly relevant aspect for those who work on construction sites.

Salary and tax differences

Income taxation in Switzerland follows the rates established by federal and cantonal laws. The cross-border worker, while paying taxes in Switzerland, remains subject to the obligation to declare income in Italy, where the IRPEF rates will apply (23% up to 28,000 euros, 33% between 28,001 and 50,000 euros, 43% over 50,000 euros), with the tax credit mechanism to avoid double taxation. The convention against double taxation, signed on 9 March 1976, remains the key reference between the two countries. For professionals in the construction sector, the calculator salary can offer an estimate of the monthly net, taking into account the specific social security and tax withholdings applicable to the specific case. Compared to the Italian market, the Swiss gross salary must be analyzed also considering the local cost of living and the possible impact of the KVG, the compulsory health insurance for which G cross-border workers have the right of option.

Useful tools for your case

To conveniently check your scenario within/beyond 20 km, use the net salary calculator and tax return guide.

Key points

The procedure for starting to work as a plasterer in the Canton of Ticino requires careful planning. After obtaining a job offer, the employer forwards the request for the G permit. Once the permit has been obtained, the worker must regularize his health situation. According to the KVG legislation, the cross-border commuter can choose between the Swiss or Italian insurance system; if you choose the Swiss system, the deductibles for adults vary between 300 and 2500 CHF. It is necessary to constantly monitor communications from the Revenue Agency and the MEF regarding declaration obligations in Italy, making sure to correctly keep the pay slips and tax certifications issued by the Swiss employer for completing the EC form in 730.

Operational steps

1. Verification of the validity of the qualification: although not always required for operational tasks, recognition can facilitate salary classification. 2. Opening a bank account in Swiss francs for salary management, useful for minimizing currency exchange costs. 3. Mobility management: evaluate travel times to the main crossings such as Brogeda or Gaggiolo, taking into account cross-border traffic. 4. Registration with AIRE (Registry of Italians Resident Abroad) if a transfer of residence is envisaged, although the majority of cross-border commuters maintain their residence in Italy.

For those who intend to delve deeper into their position, it is essential to use dedicated tools for correct financial planning. The calculator salary allows you to simulate the monthly net salary, while consulting specific guides on the pension helps to better understand the functioning of the second pillar (LPP) and its importance in the long term. For any doubts relating to insurance coverage, it is possible to delve deeper into the dynamics of LAMal to make an informed choice. Planning your professional career in Switzerland, if done with full knowledge of the facts, guarantees optimal management of income and tax obligations between the two jurisdictions.