How much income is tax-free in Switzerland in 2025?

If you’re wondering whether you have to pay taxes on your entire income, you’re not alone. Maybe you work part-time, support a family on a single income, just started your job, or are simply trying to make the most of a modest salary.

The good news: a portion of your income remains tax-free in 2025 – depending on where you live, your personal situation, and whether you make the most of your deductions. In many cases, people with lower incomes pay no federal or cantonal taxes at all.

This article explains when you actually have to pay taxes, how much of your income remains tax-free – and what you can do to reduce your tax burden as much as possible.

What does “tax-free” actually mean and what should you watch out for?

In Switzerland, "tax-free" doesn’t always mean “doesn’t need to be declared.” Many types of income must still be reported on your tax return but are not taxed. There are two main categories:

• Legally tax-free income, such as private capital gains, certain compensation payments, or social benefits.

• Income reduced below the taxable threshold through deductions for example, because you have children, pay insurance premiums, or deduct commuting expenses.

What matters: you are taxed not on your gross income but on your taxable income – what’s left after all eligible deductions.

Is there a basic tax-free allowance and how does it apply to your case?

You may know the concept from Germany: a fixed amount that’s entirely tax-exempt. Switzerland works differently – but just as fairly.

• For direct federal tax, you only start paying taxes when your taxable income exceeds around CHF 14,000 (for single individuals).

• For cantonal and municipal taxes, the rules vary significantly depending on your canton. Some offer generous personal deductions, while others provide targeted relief for low-income earners.

This means that even if your gross income is CHF 20,000 or CHF 25,000, you may end up paying no taxes at all, if your deductions are high enough.

How do cantonal differences affect your tax-free threshold?

Your canton of residence plays a major role in determining your tax situation. The differences are more significant than most people think:

What does this mean for you?

If you live in Zug or Basel-Land, significantly more of your income remains tax-free than in Zurich or Geneva. Even in Bern, despite no official allowance, you often only start paying from CHF 14,000 of taxable income.

How do children, partnerships, and dependents impact your taxes?

If you have children or are taxed jointly with a partner, your tax-free amounts increase significantly:

• Child deduction (federal tax): CHF 6,800 per child

• Married couple deduction (federal): CHF 2,800 (Cantons typically allow double the deduction for couples compared to singles)

• Dependent support deduction: e.g. if you help care for elderly parents

Example: A single parent with two children in Zurich can deduct CHF 24,700 from their income. Up to this amount can remain completely tax-free.

How can you legally keep more income tax-free?

This isn’t about tricks – just using legal opportunities that many people overlook:

• Contribute to pillar 3a (up to CHF 7,258 in 2025)

• Deduct work-related expenses (e.g. commuting, meals, materials)

• Health insurance and life insurance premiums (partially deductible)

• Donations (up to 20% of income)

• Education and training costs (if career-related)

• Commuter deductions (varies by canton)

Tip: Use your canton’s tax calculator to estimate your personal threshold. Many are surprised by how much of their income can remain tax-free.

Are capital gains really tax-free and how can you take advantage?

If you invest – for example, in stocks or ETFs – and later sell at a profit, those capital gains are tax-free in Switzerland, provided:

• You act as a private individual

• The profit is not classified as professional income

• No special registration is required

This is unique in Europe. In most countries, such gains are taxed. In Switzerland, they are not. That makes investing especially attractive even with a small budget.

Want to invest, but unsure which approach suits you?

If you’ve been hesitant to start investing, it might be because it often sounds complex, expensive, or time-consuming. But in Switzerland, investing is fiscally smart: private capital gains are tax-free – a benefit you should take advantage of.

And with Alpian, investing is easier than you might think.

Whether you're just starting out, want guidance, or prefer a hands-off approach, there's a portfolio that fits your needs. Here's a quick overview:

“Essentials” Mandate: For a smooth start

Perfect if you're new to investing or starting with smaller amounts.

• Minimum investment: CHF 2,000

• ETF-based investment strategies

• 4 portfolios across 5 risk profiles

• Weekly rebalancing

For those seeking security without managing everything themselves.

“Managed” Mandate: For full-service investing

Ideal if you want professional management without the daily effort.

• Minimum investment: CHF 30,000

• Fully tailored investment strategy

• Daily rebalancing by experts

• Personalised support from Alpian’s team

You invest, Alpian takes care of the rest.

“Guided” Mandate: For informed decision-making with expert support

Great for active investors who still want access to professional guidance.

• Minimum investment: CHF 10,000

• Real-time, data-based personal recommendations

• Rebalance on your terms

• Direct access to Alpian advisors via app

Ideal if you want to stay in control, with expert backup.

Looking for expert investment advice? Schedule your free session with a wealth advisor today.

Book a call

What’s the difference between a tax allowance and a deduction?

To keep things clear:

Both reduce your tax burden, just in different ways. Today, many allowances are technically defined as deductions, which means you must actively claim them.

When do you really pay no taxes at all?

Here are a few real-life examples for 2025:

• Single person, federal tax: Up to ~CHF 14,000 taxable income → CHF 0 tax

• Canton Zug: Up to CHF 11,100 taxable → CHF 0 cantonal tax

• Married couple with two children, Thurgau: Gross income up to CHF 50,000 → effectively tax-free after deductions

• Student with part-time job, Zurich: Gross CHF 15,000 → after deductions below tax-free threshold → no tax

This shows that even incomes that seem taxable at first can result in zero tax due after deductions.

Conclusion: Staying tax-free is possible, if you know your options

You don’t have to be wealthy to benefit from Switzerland’s tax rules. But you do need to understand which deductions apply to you – and how your location or family situation impacts your taxes.

And if you want to take advantage of tax-free capital gains without becoming a finance expert, Alpian offers a smart, simple way to get started. You invest with confidence – and benefit from the Swiss tax advantage.