Tax Obligations in Switzerland – A Guide for Music Teachers
Updated: Aug 8
Are you a freelance music teacher in Switzerland and want to learn more about taxes and tax obligations? You’re in the right place. Read our blog post on the topic, written in collaboration with a tax expert.
Who is liable for taxes in Switzerland?
Under the Swiss tax system, natural persons with residence or tax residence in Switzerland are subject to unlimited tax liability.
Tax residence is defined as follows:
Persons who are employed in Switzerland for at least 30 days.
Persons who stay in Switzerland for at least 90 days without being employed.
Foreign nationals who do not have a residence permit but stay in Switzerland and engage in dependent employment must pay withholding tax.
What is withholding tax, and who is subject to it?
Withholding tax is a tax deducted directly from income. It must be paid by the employer. Individuals who reside in Switzerland but do not have a residence permit are subject to withholding tax. The same applies to individuals who do not have a tax residence in Switzerland for their income. The withholding tax rate varies by canton and can be obtained from the cantonal tax administrations.
When does tax liability begin, and what income is taxable?
Tax liability begins with the commencement of employment. Taxable income includes gross income without deductions for AHV/IV, ALV, UVG, and BVG. The calculation is based on the monthly gross salary. If the annual gross salary exceeds CHF 120,000, withholding tax is waived, and tax is assessed retroactively.
How high is the tax burden?
In Switzerland, the tax burden varies from canton to canton and even from municipality to municipality. This is because each canton has its own tax laws, and the tax rates of individual municipalities differ. Primarily, income and wealth taxes, which are levied by the cantons and municipalities, are affected.
Most cantons provide an online tax calculator. For an overview of the various tax rates by canton and year, the Swiss Federal Tax Administration offers the Swiss Tax Calculator.
Most cantons offer an online tax calculator. For an overview of the various tax rates by canton and year, you can use the Swiss Tax Calculator provided by the Swiss Federal Tax Administration.
What are the income thresholds for earnings?
The Swiss Federal Tax Administration sets the tax rates for federal direct taxes (DBST). The current tax rates, as well as those from previous years, can be accessed on their website. Using these rates, you can determine the amount of income tax owed for federal direct tax. The rates and deductions are adjusted annually by the Federal Department of Finance according to the Swiss Consumer Price Index.
For 2021 and 2022 tax rates, you can find the information here.
Income below CHF 17,800 is exempt from income tax.
For Matchspace Teachers
Do I receive a performance statement as a teacher at Matchspace Music?
We issue an income statement to all teachers who have provided music instruction through Matchspace Music. The calculation is based on the amount paid out after deducting service fees (16.5%), which represents the teacher's actual earnings.
When will I receive my performance statement from Matchspace Music?
We strive to send all teachers their performance statement for the past year by the end of January of the following year. For example, the performance statement for 2022 will be sent by January 31, 2023.
Who can I contact with further questions?
For additional questions, feel free to contact us directly. Get in touch here.
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