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High earners in Switzerland to get tax cut from 2023

Switzerland will scrap the ‘solidarity surcharge’ for those in the highest income bracket from 2023.

Swiss franc notes laid out across a table seen from up close

People in Switzerland’s richest income bracket will see an effective tax cut from 2023 onwards, after the government decided to abolish the ‘solidarity surcharge’. 

The ‘solidarity’ contribution is charged to people in the highest income bracket in Switzerland to pay for unemployment insurance 

A spokesperson for the State Secretariat for Economic Affairs (SECO) confirmed to Swiss media on Thursday, after the news was leaked earlier in the week. 

This system was introduced in 2011, when the unemployment insurance scheme was in debt and more money was needed to compensate for the deficit. 

In effect, the surcharge is split between the employer and the employee. 

While the normal deduction amounts to 2.2 percent of wages (1.1 percent paid by the employee and 1.1 percent by the employer), an additional one percent, split between the two, has been deducted from gross wages of above 12,350 francs per month. 

This is the solidarity surcharge. 

These highest earners constitute 10 percent of Switzerland’s workforce. 

Since the payment was implemented, it contributed around 340 million francs annually to Switzerland’s budget. 

The reason they will no longer need to shell out the extra money is because unemployment insurance is on track to build up an equity of 2.5 billion by 2023 — a threshold that had to be reached before solidarity contributions could be discontinued.

While the government acknowledged the economic uncertainty due to the war in Ukraine, it was confident the threshold would be reached by 2023 and the solidarity payments would no longer be needed. 

READ MORE: What is the average salary for (almost) every job in Switzerland?

The change will not impact people in other income brackets. 

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What’s the outlook for the Swiss job market this autumn?

The prospects of finding a job in Switzerland towards the end of 2022 are promising, especially in certain sectors, a new study has shown.

What's the outlook for the Swiss job market this autumn?

The outlook for the Swiss labor market will say positive towards the end of 2022 even with a worsening of the overall economic outlook, according to Swiss news agency Keystone-ATS.

Most sectors are recruiting, with the exception of finance, insurance and real estate, a new survey of 500 employers revealed.

However jobseekers with certain qualifications or experience are more in demand than others.

“Among the top 10 qualifications sought after are recycling and waste management, ecosystem and biodiversity management, human resources and cybersecurity,” said Jan Jacob, the head of Manpower Switzerland

According to the survey 500 employers carried out in August with 500 employers, 36 percent of companies said they plan to hire in the fourth quarter, while 16 percent plan to reduce their workforce. Some 42 percent of those companies surveyed see no change in staff levels in the coming months.

All Swiss regions reported positive job prospects, with particularly high scores in Ticino  and Central Switzerland.

But 24 percent of companies surveyed in the Geneva region and 14 percent Zurich said they were planning to recruit.

“Considering that the survey was conducted in the context of geopolitical and economic risks, the war in Ukraine and the consequences of the pandemic, the hiring outlook is still positive,” Jacob said.

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