Why a pension of 80’000 francs costs more than a salary
At equal income, a retired person pays more tax than an employee. On an income of 80’000 francs the median tax burden reaches 16.43 % for the retired person against 13.29 % for the working single person, or 13’144 francs against 10’632 francs. The difference holds in all 2’107 municipalities documented by the Federal Tax Administration, without a single exception.
Two scenarios, a single income figure
The Federal Tax Administration calculates the tax burden of identical model cases for every Swiss municipality. Two of them cover the same income of 80’000 francs: a working single person on one side, a retired single person on the other. The income figure is the same; the situation is not.
The result is consistent across the country. The retired person pays more in 2’107 municipalities out of 2’107, and the employee in 0. The median difference is 3.08 percentage points, or 2’464 francs a year.
Social contributions explain most of it
A salary is not declared in full. Contributions to old-age insurance, to unemployment insurance and to occupational pension schemes are withheld at source and deducted from taxable income. A pension, by contrast, is taxed as income without those deductions applying: for the same gross amount, taxable income is therefore higher.
The scale is not the reason; the tax base is. Two people receiving 80’000 francs in the same municipality do not have the same taxable income, and therefore not the same tax, even though the same municipal multiplier applies to both.
The gap between municipalities is still the largest
Systematic as it is, this difference between pension and salary weighs less than the choice of where to live. For the same retired person the tax burden ranges from 5.53 % in Baar (ZG) to 20.85 % in Les Verrières (NE), or 4’424 francs against 16’680 francs: 12’256 francs apart each year.
| Municipality | Tax burden on the pension | Annual tax |
|---|---|---|
| Baar (ZG) | 5.53 % | 4’424 CHF |
| Zug (ZG) | 5.56 % | 4’448 CHF |
| Walchwil (ZG) | 5.58 % | 4’464 CHF |
| Steinhausen (ZG) | 5.62 % | 4’496 CHF |
| Unterägeri (ZG) | 5.62 % | 4’496 CHF |
| Cham (ZG) | 5.62 % | 4’496 CHF |
| Hünenberg (ZG) | 5.62 % | 4’496 CHF |
| Oberägeri (ZG) | 5.62 % | 4’496 CHF |
The cantons with the lowest median for this scenario are Zug (5.62 %), Schwyz (9.09 %), Zurich (11.88 %), Nidwalden (11.91 %) and Uri (12.78 %).
In other words, for a retired person the place of residence weighs four to five times more than the difference in treatment between pension and salary. The two effects compound: someone living in a high-tax municipality faces both the wider tax base and the higher rate.
What this model case does not cover
The scenario covers a pension and takes no account of wealth, nor of a lump-sum withdrawal from an occupational pension scheme, which is taxed separately and at a reduced rate. It also leaves out supplementary benefits, church tax and deductions for health costs, which vary from one canton to another.
Scenarios S1 and S5 of the Federal Tax Administration simulator, tax year 2025: a single person without children and a retired single person, both with 80’000 francs of income, federal, cantonal and municipal tax, without wealth or church tax. The comparison covers only the 2’107 municipalities where both scenarios are documented. These amounts are orders of magnitude comparable between municipalities, not a personal calculation.
Article sources
Federal Tax Administration (FTA)Tax burden 2026: Swiss tax calculator (model cases)View source