Tax at source: does your municipality matter?
On a B or L permit, your employer deducts tax directly from your salary (tax at source, Quellensteuer, often called withholding tax). That deduction is the same in every municipality of a canton. Where you live within the canton only affects your tax under a subsequent ordinary assessment.
In short
- The tax-at-source rates apply across the whole canton. If you move within the canton, your deduction stays the same.
- If you earn at least CHF 120,000 gross a year, you are automatically taxed under a subsequent ordinary assessment, at the tax rate of the municipality you live in.
- If you earn less, you can apply for this assessment in writing by 31 March of the following year. Your application then also covers every later year.
For tax year 2026, the deadline is 31 March 2027.
Who pays tax at source
- Foreign employees without a settlement permit (C permit) who live in Switzerland, for example on a B or L permit.
- You are not taxed at source if you are married to, and live with, a Swiss citizen or a C permit holder.
- The deduction covers your salary and replacement income such as daily allowances. When you receive a C permit, you are taxed under the ordinary procedure for the whole year, and the deduction stops from the following month.
This page is for people who live in Switzerland. Different rules apply to cross-border commuters.
How the deduction is calculated
Your employer uses the rates of the canton you live in. They cover federal, cantonal and municipal tax and include flat amounts for work expenses, insurance premiums and children.
For the municipal share, the canton builds a single rate for all its municipalities into its tables. The canton of Zurich says so explicitly in its tax act: the same tables across the canton, with the municipal share based on the weighted average of municipal taxes.
So if you live in a municipality with a low tax rate, you tend to pay more at source than under an ordinary assessment; in a municipality with a high tax rate, you tend to pay less.
Tax codes on your payslip
- A: single, divorced, separated or widowed, no children in the household
- B: married, only one spouse in work
- C: married, both spouses in work
- H: single with children or other dependants in the household whom you mainly support
The letter is followed by the number of children and Y or N for with or without church tax, for example A0N or C2Y. Other codes apply to cross-border commuters and to special types of income.
Subsequent ordinary assessment
Under this assessment you file a tax return like everyone else. Your employer keeps deducting tax at source; the tax administration credits it against your ordinary tax, without interest.
- Mandatory
- If your gross salary is at least CHF 120,000 in a year. For married couples, it is enough for one spouse to reach this amount. It is also mandatory if you have income that is not taxed at source, or taxable assets; in that case you must request a tax return by 31 March of the following year.
- On application
- If you earn less, you can apply in writing to your cantonal tax administration by 31 March of the following year. If you leave Switzerland, you must apply before you deregister.
Either way, the assessment continues until you are no longer taxed at source, even if your salary drops later. An application cannot be withdrawn.
If you do not apply, the deduction from your salary is final. It replaces the ordinary tax on your salary, and no further deductions are allowed afterwards, for example for pillar 3a.
What this means when choosing where to live
- Without a subsequent ordinary assessment, it is the canton that matters for your tax, not the municipality. Ubivo’s tax comparison between municipalities in the same canton then does not apply to you; differences between cantons remain.
- With a subsequent ordinary assessment, your municipality’s tax rate applies, as for everyone else. Ubivo’s comparison then applies to you.
- If you earn less than CHF 120,000, a municipality with a low tax rate can be a reason to apply. Because the application also covers every later year, do the maths first or ask the tax administration.
Ubivo calculates tax under the ordinary assessment (based on Federal Tax Administration data). Ubivo does not show the deduction at source; the cantons publish their rate tables. Cantonal tax-at-source offices (ESTV, in German)
Rates by canton: the same in every municipality?
Checked against the 2026 rate files that the cantons publish through the Federal Tax Administration (ESTV) for payroll software. Each file holds one set of rates for the whole canton, split by tax code, children and church tax. No canton distinguishes by municipality.
Frequently asked questions
I’m moving within the canton. Does my deduction change?
No. The rates are the same across the canton. Your tax can only change under a subsequent ordinary assessment.
And if I move to another canton?
Your employer then applies the new canton’s rates once you live there. A subsequent ordinary assessment is carried out by the canton you live in at the end of the year.
Can I apply for one year only?
No. An application applies from the year you apply for until you are no longer taxed at source, and it cannot be withdrawn.
What changes with a C permit?
You are taxed under the ordinary procedure for the whole year in which you receive it, and the deduction from your salary stops from the following month. From then on, your municipality matters as it does for everyone else.
Is the CHF 120,000 threshold based on both spouses’ salaries combined?
No. It applies per person; if one spouse reaches it, both are assessed.
Not tax advice. This page summarises the law and administrative practice as of 31 October 2026. Your cantonal tax administration has the final word.
Sources
Legal basis (official texts in German, French and Italian): DBG art. 83, DBG art. 85, DBG art. 89, DBG art. 89a, StHG art. 32, StHG art. 33, StHG art. 33a, StHG art. 33b, StHG art. 38, QStV art. 1, QStV art. 9, QStV art. 10, QStV art. 12.
DBG: Federal Act on Direct Federal Taxation; StHG: Federal Act on the Harmonisation of Direct Taxes of the Cantons and Communes; QStV: FDF Ordinance on Tax at Source.
- ESTV, Circular no. 45 on tax at source on employees’ earned income, 12 June 2019, section 11
- Canton of Zurich, Tax Act § 89 (in German)
- ESTV: tax-at-source rate files for payroll software (in German)
- ESTV: structure of the rate files (in German)