Withholding Tax in Switzerland: When Is a Subsequent Ordinary Tax Assessment Mandatory?
Who pays withholding tax in Switzerland, how is it calculated, and when is a subsequent ordinary tax assessment (NOV) mandatory or advisable? Deadlines, thresholds and pitfalls.
Who is required to pay withholding tax in Switzerland?
Withholding tax is paid by every employee of foreign nationality who is tax-resident in Switzerland but has not yet obtained a C settlement permit (Ausländerausweis C).
This applies to the vast majority of Hungarian employees working with a B or L permit (Ausweis B, Ausweis L). As a Hungarian national, you are an EU citizen, but for tax purposes, the decisive factors are not nationality but the type of permit and tax residence.
No withholding tax is deducted from foreign nationals who are married to a Swiss citizen or a person holding a C settlement permit. In such cases, the rules of ordinary assessment (ordentliche Veranlagung) apply, based on a tax return.
The following are also subject to withholding tax:
cross-border workers (Grenzgänger) living abroad and commuting daily;
employees who return home weekly (Wochenaufenthalter);
performers and athletes appearing in Switzerland, on their Swiss income.
Once a C permit is obtained, the withholding tax obligation ends, and you are automatically transferred to the ordinary taxation system.
How is withholding tax deducted and calculated?
Withholding tax is deducted directly from the monthly gross salary by the employer and transferred to the competent cantonal tax authority. No separate action is required on your part — the deduction is automatic.
The deducted amount includes federal, cantonal and municipal income tax, as well as church tax where applicable. In other words, withholding tax covers in a single deduction what is assessed separately at several levels for ordinarily taxed individuals.
Why does the deducted amount vary by canton?
The withholding tax rates (Quellensteuertarif) vary significantly between cantons because each canton and municipality applies its own tax rates. The same gross salary produces different net results in Zug, Zürich and Genève.
In Switzerland, almost every tax issue depends on the canton, and withholding tax is no exception. It is therefore advisable to always use the official rates of the canton of residence as the basis.
What determines the exact tax rate code?
The specific withholding tax rate depends on three factors:
depending on marital status,
the number of children,
the level of income.
A total of 9 different tariff codes exist (according to the documented system in the Canton of Zürich). Correct tariff code classification is important: if, for example, the allowance for a child is not included in the classification, too much tax will be withheld.
The Eidgenössische Steuerverwaltung (ESTV) publishes the official withholding tax tariffs every year. The tariff files for the 2026 tax year were finalised and published by the ESTV for all cantons between December 2025 and March 2026. The tariffs change annually, so the version valid for the relevant year always applies.
When is it mandatory to file a subsequent ordinary tax return (NOV)?
Subsequent ordinary assessment (NOV) means that, despite the withholding tax deducted, you must subsequently file a full ordinary tax return, and the final tax is assessed on this basis. In certain cases, this is mandatory.
Income threshold of CHF 120,000
If the gross annual income of an employee subject to withholding tax reaches or exceeds CHF 120,000, they are subject to mandatory NOV. This rule is based on Article 89 of the Federal Direct Tax Act (DBG) and Article 33a of the Tax Harmonisation Act (StHG).
For married couples with two incomes, the mandatory NOV threshold also applies if one of the spouses at least one of them has a gross annual income of at least CHF 120,000.
Obligation due to other income or assets
Mandatory NOV also applies to individuals with substantial other income or assets not subject to withholding tax. This may include, for example, rental income, investment returns or substantial savings.
The specific thresholds vary by canton. In the canton of Zürich (canton-specific example), the threshold is:
CHF 3,000 in other income not subject to withholding tax, or
CHF 80,000 / 160,000 in assets.
These figures apply to the canton of Zürich. Other cantons may have different thresholds, so the rules of the canton of residence should be checked.
NOV is irreversible
An important consequence is that once someone enters the NOV system, it remains in force until the end of their withholding tax liability—typically until they obtain a C permit. It is not possible to return to withholding tax deductions alone. This principle is also set out in the cantonal guidance of Basel-Stadt.
In other words, if income exceeds CHF 120,000 in one year, a regular tax return must also be filed in subsequent years, even if income decreases.
When is it advisable to voluntarily request ordinary taxation instead of withholding tax?
Individuals with an income below CHF 120,000 may also voluntarily request NOV. This makes sense if they wish to claim individual tax deductions that are not included, or only partly included, in the flat-rate withholding tax tariff.
Withholding tax is flat-rate in nature: it includes standard deductions but does not take into account your individual, actual expenses.
Which items may become deductible?
Under NOV, the following items can typically be deducted:
Pillar 3a (Säule 3a) contributions;
voluntary buy-ins to the 2nd pillar (BVG) (Einkauf);
work-related expenses;
childcare expenses;
further education and training costs (up to 12 000 CHF per year);
maintenance payments made;
interest on private debts.
From a Hungarian perspective, this is often worthwhile because of pillar 3a and education costs: many Hungarian employees contribute to retirement savings or pursue further education, and these are not automatically reflected in the withholding tax tariff.
The risk: voluntary NOV cannot be withdrawn
This is the most important warning. If the tax liability calculated under the ordinary tax assessment is higher, than the withholding tax already deducted, the difference must be paid — and the voluntary NOV application cannot be withdrawn.
This means that NOV is not a one-way “refund application”. If the situation has been assessed incorrectly, it is entirely possible that instead of receiving a refund, an additional payment will be due.
Voluntary NOV therefore only makes sense if the expected deductions genuinely exceed the items already taken into account in the withholding tax lump sum. In cases involving larger amounts or complex circumstances (for example, a voluntary 2nd-pillar buy-in, property, or multiple sources of income), it is advisable to have the figures reviewed by an expert before deciding, as the application is irreversible.
Which documents and deadlines apply to withholding tax corrections?
The application for NOV must be submitted by 31 March of the year following the tax year must be submitted to the competent cantonal tax authority. The deadline for an application relating to the 2025 tax year is therefore 31 March 2026.
The deadline is final
This deadline is a final deadline (Verwirkungsfrist) that cannot be extended. If it is missed, entitlement is lost permanently—there is no hardship procedure and no possibility of late submission. This point cannot be stressed strongly enough: 31 March is a strict, final date.
Anyone seeking a correction of withholding tax (whether under mandatory or voluntary NOV) should mark this date prominently in their calendar.
What if you leave Switzerland during the year?
If you leave Switzerland permanently during the year, the NOV application must be submitted no later than the date of deregistration to the municipality (Gemeinde). This is particularly important for Hungarians planning to return home: in addition to the administrative steps involved in moving away, the withholding tax correction must also be dealt with in time, otherwise the opportunity will be lost.
What information is required for the application?
In addition to personal details, submitting a NOV application requires the 13-digit Swiss social security number (AHV number, starting with 756).
Supporting documents do not need to be attached to the application itself—they only need to be enclosed with the tax return sent out later. However, it is advisable to collect the relevant documents when submitting the application (pillar 3a certificate, education invoices, employment-related expenses) so that completing the tax return goes smoothly.
Sources
ch.ch — https://www.ch.ch/de/auslander-in-der-schweiz/in-der-schweiz-leben/quellensteuer/
admin.ch (ESTV) —
admin.ch — https://www.admin.ch/de/newnsb/zvrg4CYct6xo
admin.ch (Fedlex, DBG/StHG) —
zh.ch — https://www.zh.ch/de/steuern-finanzen/steuern/quellensteuer.html
zh.ch (NOV) —
be.ch (Taxinfo) —
bs.ch — https://media.bs.ch/original_file/da32552a1b3329d5900cb0ae052bca576b096fea/19000-mb-qst-a-22-02-wegleitung-und-tarife-1.pdf
taxea.ch — https://www.taxea.ch/faq-steuern/besondere-steuerregelungen-fur-expats-aus-der-eu-vs-nicht-eu-landern
livingease.ch — https://livingease.ch/blog/quellensteuer-switzerland
comparis.ch — https://en.comparis.ch/neu-in-der-schweiz/finanzen/quellensteuer
cryptotax.ch — https://www.cryptotax.ch/blog/nachtraegliche-ordentliche-veranlagung/
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In Brief
In Switzerland, withholding tax is automatically deducted from foreign employees who do not hold a C settlement permit. However, if annual gross income reaches CHF 120,000, or if there is substantial additional income or wealth, filing a subsequent ordinary tax assessment (NOV) is mandatory. Before submitting a voluntary NOV application, a thorough calculation is advisable, as the decision is irreversible and may result in an additional tax liability rather than a tax refund.
Key Takeaways
- Check your annual gross income, as reaching the CHF 120,000 threshold makes it mandatory to switch to a subsequent ordinary tax assessment (NOV).
- Review the specific thresholds for additional income and wealth in your canton of residence, as exceeding these also triggers a mandatory tax return.
- Calculate your expected deductions, such as Pillar 3a contributions and education expenses, before applying for a voluntary NOV, as the application cannot be withdrawn and may also result in additional tax due.
- Submit your NOV application no later than 31 March of the year following the tax year, as this deadline is forfeiture-based and cannot be extended.
- If you permanently leave Switzerland during the year, submit the NOV application to the competent municipality no later than the date of deregistration.
Frequently Asked Questions
Who is required to pay withholding tax in Switzerland?
All foreign-national employees who have tax residence in Switzerland but have not yet received a C settlement permit are subject to withholding tax. Exceptions apply to individuals married to a Swiss national or to a person holding a C permit. Cross-border commuters (Grenzgänger), weekly residents (Wochenaufenthalter), as well as foreign artists and athletes performing in Switzerland, also pay withholding tax.
Above what income threshold is a subsequent ordinary tax assessment (NOV) mandatory?
A subsequent ordinary tax assessment (NOV) is mandatory if an employee’s annual gross income reaches or exceeds CHF 120,000. For dual-income married couples, the obligation also applies if the income of at least one spouse reaches this CHF 120,000 threshold.
For what other reasons can an ordinary tax return become mandatory?
Filing an ordinary tax return is also mandatory if you have additional income not subject to withholding tax, such as rental or securities income, or substantial wealth. The exact thresholds vary by canton; in canton Zürich, for example, additional income exceeding CHF 3,000, or wealth exceeding CHF 80,000 for single individuals / CHF 160,000 for married couples, triggers this obligation.
Can you switch back from ordinary taxation to standard withholding tax deductions?
No. Entering the NOV system is irreversible. If you enter the ordinary taxation system due to exceeding the income threshold, other wealth, or a voluntary application, you must remain in it until your withholding tax obligation ends, typically when you obtain a C permit. This also applies if your income falls below the CHF 120,000 threshold in later years.
Which expenses can be deducted from tax during a subsequent ordinary tax assessment?
Under the ordinary tax return, deductions become available for contributions to Pillar 3a (Säule 3a), voluntary buy-ins into the 2nd pillar (BVG), work-related expenses, childcare costs, further education and training costs up to CHF 12,000 per year, maintenance payments, and interest on private debts.
What is the deadline for submitting a NOV application, and what happens if it is missed?
The NOV application must be submitted to the competent cantonal tax office by 31 March of the year following the tax year, for example by 31 March 2026 for the 2025 tax year. This is a forfeiture deadline, meaning it cannot be extended, and a late submission results in the permanent loss of entitlement.
What should be done about withholding tax correction if someone permanently leaves Switzerland during the year?
If you permanently leave Switzerland during the year, you must submit the NOV application to the local municipality (Gemeinde) no later than the date of deregistration. If this deadline is missed, the opportunity to correct the withholding tax is lost.
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