Taxes for individuals
The main indicator of the BAK Taxation Index on taxes for individuals is the effective average tax rate (EATR). This tax rate corresponds to the taxes owed by a highly qualified employee as a percentage of gross wage. All relevant types of taxes and regulations relevant at a location are considered, as well as non-wage labour costs with tax character on the employer and employee side. The results are therefore particularly meaningful for national and international tax comparisons.
BAK Taxation Index for individuals 2023/2024
The Swiss cantons perform well to very well in the global ranking of taxes for individuals. The leading cantons directly follow the top group consisting of Singapore and Hong Kong. Even the canton with the highest tax burden is still below the international average. In particular, Switzerland's tax burden is considerably lower than that of its Western European competitors.
BAK Taxation Index for individuals 2023 - Minimum and maximum tax burden in the cantons
The Swiss cantons (measured at the cantonal main location) perform well to very well in the global ranking of taxes for individuals. If the tax burden in the municipality with the lowest tax burden is used instead of the EATR tax burden in the cantonal main location, the Swiss cantons are even more attractive. Even if the municipality with the highest tax burden is used as a benchmark, the Swiss cantons are well to very well positioned.
BAK Taxation Index for individuals over time
A longer-term comparison shows that the Swiss cantons have more or less continuously reduced taxes for employees. This has enabled them to maintain their lead over most competitor locations, where there is also an overall trend toward a lower tax burden. The cantons benefit from the fact that their public budgets are healthy by international standards.
MethodologyThe main indicator of the BAK Taxation Index individual taxes is the effective average tax burden (EATR) for a highly qualified employee. The analysis is performed for all 26 Swiss cantons and important international competitor locations. The index is calculated in the standard case for single persons without children with an after-tax income of EUR 100,000. The calculation takes into account all relevant taxes for individuals including the rules for determining the tax bases (e.g. deductibility of employee contributions to social security and occupational pensions). Also included are social security contributions (where relevant for tax purposes) and levies and payroll taxes paid directly by the employer. The analysis includes all government levels of a location (e.g. for a Swiss canton: federal, cantonal, and municipal levels). This allows meaningful national and international comparisons of tax burdens. A comparison based on statutory tax rates alone would lead to an incomplete representation of taxes for employees. |
