Quellensteuer (withholding tax)
A tax deducted directly from wages — typical for foreign employees without a permanent residence permit (C). The employer deducts it and pays it over to the canton. Any overpayment can often be reclaimed through a subsequent correction.
Quellensteuer (withholding tax) is income tax deducted directly from wages at source, rather than via an annual tax return. In Switzerland it mainly applies to foreign employees who do not hold a C settlement permit, as well as to cross-border commuters and certain other groups. The employer withholds the tax with each payslip and forwards it to the canton, so the employee usually has nothing further to pay.
Example: A German national working in Aargau on a B permit earns CHF 7'000 gross per month. Her employer applies the cantonal withholding-tax tariff for her situation, deducts the tax from each salary and remits it to the canton — she does not file an ordinary return unless her income exceeds the recalculation threshold.
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Who pays withholding tax in Switzerland?
Mainly foreign employees without a C settlement permit, plus cross-border commuters and some specific groups such as board members or artists resident abroad. Swiss citizens and C-permit holders are taxed via the ordinary tax return instead.
Can I reclaim overpaid withholding tax?
Often yes. By applying for a subsequent ordinary assessment or a tariff correction (usually by 31 March of the following year), deductions such as pillar 3a, professional expenses or childcare can be claimed and any overpayment refunded.