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a friend,who is not a CD member, asked me to post for her. She has a job offer with a company near Zurich. Sorry I can't recall the name of the small town but no doubt she would be apt renting in Zurich.
Her question(s) : is 95,000 U.S. dollars sufficient pay for the region?
How would she find out how much in taxes she would owe in Switzerland AND in her U.S. home state(which does have state income tax) She is buying a house where she now lives in the U.S. and would continue paying mortgage on that.
I know she's confused and excited and I'm not sure that I've asked all the questions she asked me to post. If she has more I'll add them later.
a friend,who is not a CD member, asked me to post for her. She has a job offer with a company near Zurich. Sorry I can't recall the name of the small town but no doubt she would be apt renting in Zurich.
Her question(s) : is 95,000 U.S. dollars sufficient pay for the region?
How would she find out how much in taxes she would owe in Switzerland AND in her U.S. home state(which does have state income tax) She is buying a house where she now lives in the U.S. and would continue paying mortgage on that.
I know she's confused and excited and I'm not sure that I've asked all the questions she asked me to post. If she has more I'll add them later.
Thanks to any and all who respond.
A couple of comments.
First, Zurich is one of the most expensive cities in the world. She should expect to pay $2500/month for a fairly ordinary 2 bedroom apartment.
Second, taxes and other costs: she will have to pay a) cantonal tax, b) federal tax, c) AVS (social security) and d) second pillar pension. Cantonal and federal tax will probably be around 20% - 25% of her gross (after deductions). AVS will be around 5% and second pillar around 2% - 3%. She will also have to pay health insurance. So, say 30% - 35% of her gross for all that or approx $30,000
Third, US taxes. She will have to file US taxes but will probably not pay anything due to double taxation treaty with Switzerland.
$95,000 is not a huge salary for Zurich and especially with the exchange rate as it is right now. She will be able to live on it but will be far from rich. She either needs to get paid in Swiss Francs or negotiate exchange rate protection and/or more money. That said, Zurich is a great city. Clean, safe and well run. There is beautiful country all around and it is handy for visiting the rest of Europe.
First, Zurich is one of the most expensive cities in the world. She should expect to pay $2500/month for a fairly ordinary 2 bedroom apartment.
Second, taxes and other costs: she will have to pay a) cantonal tax, b) federal tax, c) AVS (social security) and d) second pillar pension. Cantonal and federal tax will probably be around 20% - 25% of her gross (after deductions). AVS will be around 5% and second pillar around 2% - 3%. She will also have to pay health insurance. So, say 30% - 35% of her gross for all that or approx $30,000
Third, US taxes. She will have to file US taxes but will probably not pay anything due to double taxation treaty with Switzerland.
$95,000 is not a huge salary for Zurich and especially with the exchange rate as it is right now. She will be able to live on it but will be far from rich. She either needs to get paid in Swiss Francs or negotiate exchange rate protection and/or more money. That said, Zurich is a great city. Clean, safe and well run. There is beautiful country all around and it is handy for visiting the rest of Europe.
Hope this helps.
I'll pass this along to her tonight. I do believe she would be making $30,000 more than her salary now. So basically the additional 30k would be eaten up in taxes.
I'll pass this along to her tonight. I do believe she would be making $30,000 more than her salary now. So basically the additional 30k would be eaten up in taxes.
Yes .... but .....
She is presumably paying taxes in the USA and Swiss tax is generally not outrageous compared to other European countries so the difference may not be huge. Also, the AVS and 2nd pillar she should get back when she leaves Switzerland permanently. But that sum of money will be subject to US tax on her return as it is tax free in Switzerland (they always get you). AVS is basically social security. Second pillar is like a 401k except that it is obligatory as is the employers matching payment.
Depending on where she is living in the USA, the main cost difference is likely to be accommodation. Also, food, gas, going out tend to be more expensive than in the USA.
Switzerland is not a 'punishment posting'. It is a highly developed country and has a great standard of living.
Also ... she will need three months rent as a security deposit.
She is presumably paying taxes in the USA and Swiss tax is generally not outrageous compared to other European countries so the difference may not be huge. Also, the AVS and 2nd pillar she should get back when she leaves Switzerland permanently. But that sum of money will be subject to US tax on her return as it is tax free in Switzerland (they always get you). AVS is basically social security. Second pillar is like a 401k except that it is obligatory as is the employers matching payment.
Depending on where she is living in the USA, the main cost difference is likely to be accommodation. Also, food, gas, going out tend to be more expensive than in the USA.
Switzerland is not a 'punishment posting'. It is a highly developed country and has a great standard of living.
Also ... she will need three months rent as a security deposit.
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Is the job permanent or just for a few years ?
If temporary, and she can stay at least 7 years or so, she can have a nice looking nest egg in the end.
Also, keep in mind that the *standard of Living* as Jaggy already stated is way higher , like 2.5 times or so ???
The biggest shock for anybody coming to Switzerland, to live and work there, is the reduced *buying power*, compared the buying power *at home*
Considering taxation, the best thing is to consult with a tax consultant *back home* who MUST be very familiar with international tax laws !!
Because of some financial obligation *back home*, have her check if she can get some of her salair, paid in the USA.
Security deposits ? Not only rent, but also utilities often require security deposits.
In the end, a great opportunity regardless !
Jaggy (Geneve area) and I (Berne area) lived and worked there (do not get me wrong, we only know OF each other !!),
and I am sure we both loved it and have good memories.
If she already speaks some German and/or French, that would even make her work stint even more enjoyable !
Except for maybe the teeny little villages, English is understood nearly everywhere.
Is the job permanent or just for a few years ?
If temporary, and she can stay at least 7 years or so, she can have a nice looking nest egg in the end.
Also, keep in mind that the *standard of Living* as Jaggy already stated is way higher , like 2.5 times or so ???
The biggest shock for anybody coming to Switzerland, to live and work there, is the reduced *buying power*, compared the buying power *at home*
Considering taxation, the best thing is to consult with a tax consultant *back home* who MUST be very familiar with international tax laws !!
Because of some financial obligation *back home*, have her check if she can get some of her salair, paid in the USA.
Security deposits ? Not only rent, but also utilities often require security deposits.
In the end, a great opportunity regardless !
Jaggy (Geneve area) and I (Berne area) lived and worked there (do not get me wrong, we only know OF each other !!),
and I am sure we both loved it and have good memories.
If she already speaks some German and/or French, that would even make her work stint even more enjoyable !
Except for maybe the teeny little villages, English is understood nearly everywhere.
permanent position should she decide to stay with the company.
She is attempting to reach an acct. to ask tax questions.
She doesn't speak any language other than English but the company does provide German lessons.
She isn't a high maintenance person at all. She,of course would require a furnished apt.
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Quote:
Originally Posted by PippySkiddles
Any idea of the cost of utilities on an average?
From what I remember (we were there in the early 90's) about a bit above average, I would say.
Have her type in
cost of utilities in zurich switzerland
and lurk at her leisure ...
I hope she does not back off after reading all those cost suggestions.
We did say it was expensive !!
I would say that at least CHF 3200 per month for expenses only, is needed
From a personal viewpoint, I feel that her proposed salary is on the low end.
But again, just *my opinion* !!
Tax rates, I forgot to mention before, is also different, in different parts of Switzerland.
So it depends on where she ends up registering. Hard to help her from my point since I do not know all the tax rates there.
Go here to get some idea: Kantonales Steueramt
A *small* problem there, because if she clicks on *English*, not much there to read ...
I am pretty sure that there will be somebody, where she will be working, who can help her in that department. In essence, living away from Zurich City, the farther the better, the lower the tax rate! (I worked in Berne, but after some research moved to a small town near Lac de Bienne [Erlach].)
But ... , if she is a party animal, hard to get home at late hours if no private vehicle available.
She should live frugally (you mention she is low maintenance, whatever that means ...) and save her pennies to *see Europe* (she does get a whole lot more free time off work then in the USA).
About her house in the USA. Always a good thing if it is worth it to hold on to it.
But, maintaining two households is not good if she has to *pay* for it.
She should at least get the money equivalent to her monthly mortgage cost *PLUS* a maintenance fee for anything that WILL go wrong during all that time she is *out of the country*.
We did that for umpteen years, and we now feel that we should have just sold it rather then having some rental agency *take care of it* ... It was truly a pain you know where !
While she talks with the tax attorney, have her also make note of the time she MUST stay out of the country to qualify for the tax deductions back home.
LBNL, if she does make the decision, than the first thing to do in Switzerland is to contact the US embassy and get addresses of the several USA expat clubs there.
It's still a well paid position. Unless your goal is to save up enough money to buy a house after 2 years.
Only a person who is currently living there will be able to tell you about the cost of utilities etc. But it shouldn't be much more than the amount you'd be paying in a comparable city in the U.S. No A/C.. I would just look around and try to find other job offers and try to find out what they're paying.
Please note, tax information or advice cannot be given at the U.S. Embassy in Bern. The Embassy in Paris has an IRS office and is responsible for U.S. Citizens who reside in Switzerland. Their telephone number is 0033 143 122 555.
I'm pretty sure she won't pay U.S. taxes. You'll have to report it, but they are not gonna make you pay taxes.Foreign Earned Income Exclusion
She's close. Didn't know it was only 95,000. That's ridiculous. There's probably no other developed country that will make you pay full income tax in both countries. You shouldn't be paying for the government, social security etc. of a country you do not live in.
permanent position should she decide to stay with the company.
She is attempting to reach an acct. to ask tax questions.
She doesn't speak any language other than English but the company does provide German lessons.
She isn't a high maintenance person at all. She,of course would require a furnished apt.
Any idea of the cost of utilities on an average?
thanks
If she is in an apartment then heating and hot water will be part of the rent (charges). It is itemized separately but it is all paid monthly as one bill. Other utiility use will be billed separately.
Most apartments are not furnished. Ikea is your friend
The bulk of tax is cantonal (same as state tax). Federal tax is quite low. However, if the job is in Zurich then the work permit will be in Zurich and she will not be able to live outside the canton. Therefore, she will be paying Zurich cantonal taxes. If the job is in Zug (for example) then the same would apply for the canton of Zug and she would pay Zug taxes which are much lower. Just the way it works. Switzerland and the USA do have a dual taxation treaty so US taxes should not be a big problem.
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