Salary Deductions Overview (Switzerland)
AHV/IV/EO, ALV, BVG, accident insurance & withholding tax explained — so you understand why your net salary is lower than your gross salary.
- Know every line – the most common Swiss payslip deductions in one overview.
- Understand “why” – what each deduction funds (pension, unemployment, accidents, taxes).
- Plan smarter – avoid net salary surprises when starting a new job.
In Switzerland, your gross salary is reduced by mandatory contributions and (sometimes) tax before it becomes your net salary. That’s normal — and it’s why two people with the same contract can still take home different amounts.
This page gives you a clean overview of the most common deductions you’ll see on a Swiss payslip. For exact calculations, use the linked deep-dives.
Note: exact rates and rules vary by canton, employer, age, pension plan, and personal situation. Treat this as a practical overview.
1. The “big 5” salary deductions in Switzerland
Most employees will see the same core deductions on their payslip. These are the main reasons net salary is lower than gross salary.
| Deduction | Short meaning | Where you’ll notice it |
|---|---|---|
| AHV / IV / EO | State pension, disability insurance, income replacement | Always (employees in CH) |
| ALV | Unemployment insurance | Usually (up to insured salary limits) |
| BVG (2nd pillar) | Occupational pension via employer pension fund | Often (depends on salary level + plan) |
| Accident insurance (UVG) | Accident coverage; non-work portion often paid by employee | Common (especially full-time) |
| Withholding tax (Quellensteuer) | Income tax deducted at source | Mainly for many foreign residents |
2. AHV/IV/EO (social security) – what it covers
AHV/IV/EO is the backbone of the Swiss social system:
- AHV: old-age and survivors’ insurance (state pension)
- IV: disability insurance
- EO: income replacement (e.g., military service, maternity/paternity-related compensation)
On your payslip, this often appears as a combined line item (e.g., “AHV/IV/EO”).
3. ALV (unemployment insurance)
ALV finances unemployment benefits and related programs. You’ll typically see it as a separate deduction line.
4. BVG (occupational pension / 2nd pillar)
BVG is your employer pension fund contribution (2nd pillar). It’s one of the most “variable” deductions: the amount depends on salary level, your age bracket, and your employer’s pension plan.
- Typically split between employer and employee (the payslip shows your part).
- Often a major difference between two people with similar gross salaries.
- Can change with age or when you switch employers.
If you’re trying to estimate net salary, BVG is one of the key lines to ask HR about.
5. Accident insurance (UVG) – work vs non-work
Swiss accident insurance often has two parts:
- Work accidents – typically covered/paid by the employer.
- Non-work accidents – often deducted from your salary (especially if you work enough hours).
On payslips, this can appear as “UVG”, “NBU”, “Accident”, or similar wording depending on the employer.
6. Withholding tax (Quellensteuer) – when it appears
If you are taxed at source, your income tax is deducted directly from your salary. Whether this applies depends on your permit status, canton, and personal situation.
7. Other common payslip items (bonus, expenses, allowances)
Not every payslip line is a “deduction”. Common additional items include:
- Bonus / variable pay (increases gross salary and may change deductions/tax)
- Allowances (meal/transport, depending on employer policy)
- Expense reimbursements (often not taxable, but depends on structure)
- Garnishments or special adjustments (rare, situation-specific)
If you want to decode your exact payslip lines, use: Swiss Payslip Explained.
8. FAQ: salary deductions in Switzerland
Why do my deductions look different from my colleague’s?
Common reasons include different pension plans (BVG), age brackets, permit/tax status (withholding tax), and insurance arrangements. Even the 13th salary or bonuses can shift deductions.
Is health insurance deducted from salary in Switzerland?
Usually no. Basic health insurance (Krankenkasse) is typically paid directly by you, not deducted from your payslip. (Employer exceptions exist, but they’re not the standard.)
Which deduction has the biggest impact on net salary?
BVG (pension) and withholding tax (if applicable) are often the largest “swing factors”, because they vary most by plan and situation.
What should I do if my payslip looks wrong?
Compare it to your contract and ask HR/payroll for a breakdown. Then use Swiss Payslip Explained to validate the line items.
