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Cost of living in Switzerland

With salaries higher than in most countries, Switzerland seems like the dream destination where it will be easy to live a life of luxury. Unfortunately the reality is not quite so simple and the high cost of living often puts an end to people’s dreams of luxury and savings. Here we help you to understand how much it really costs to live in Switzerland.

The simple (unscientific but quite accurate) rule is that you should spend no more than a 1/3 of your income on your housing, count on another 1/3 going towards fixed costs (like insurance, amenities and transport) and the last 1/3 being for your day to day costs. On top of that the 13th month of salary is usually put towards paying taxes. If you can balance your budget following this rule, then you should be able to live in Switzerland without financial worries.

Switzerland is touted as one of the most expensive country in the world to live in, but it is important to take buying power into account. Switzerland’s high salaries places it 4th in the world of the highest earnings in the world. Although there is no such thing as a minimum wage, an hour work usually starts at around CHF 20.- to CHF 25.- an hour.

Zürich and Geneva top the list of the most expensive cities to live in both in the country (and the world). When looking at where to live it’s important to not only look at the cost of renting a home but also taxes. There are three main types of taxes, federal (same all over the country), cantonal (the same in the whole canton decided by the canton) and municipal.

Very often foreigners will have their taxes deducted directly from their salary (tax at source) until they get their C Permit at which point they will have to declare and pay their taxes themselves.

The VAT (value added tax) is relatively low, varying between 2.5% and 7.7% depending on which type of goods it applies to. Beware there even is a church tax!

Health insurance is obligatory and can be quite costly, be sure to compare between insurances and decide carefully on what you may want/need. Comparis is a great website to look up many different insurances.

Your employer will pay into your first and second pillar of pension, but if you want to supplement your future pension it is worth considering paying into the 3rd pillar.

There is no straight forward answer as to how much it costs to live in Switzerland, yes it is more expensive than in other countries but higher salaries offset the cost of living – after all 8 million people manage to live here. Be realistic, be prepared to compromise on location (especially around Zürich and Geneva) and be savvy.

Charlie Hartmann is the managing director of the Livingin organisation which focuses on helping international residents connect, grow and thrive in Switzerland.