Switzerland announces federal tax relief and higher deductions for 2027

The Federal Department of Finance (FDF) has announced that Swiss direct federal tax brackets and deductions will be adjusted for the 2027 tax year to offset inflation and a rising cost of living in Switzerland.

Federal tax adjustments for 2027

For the 2027 tax year, which will be filed in 2028, the federal government has amended direct federal taxes (direkte Bundessteuer) to “offset the effects of bracket creep” caused by a 0,47 percent inflation rate.

The main changes to federal tax thresholds include:

• Married couples: A new taxable income threshold of 29.900 Swiss francs (up from 29.700 francs)
• Top tax rate: The maximum tax rate will apply to a taxable income of 946.000 francs (up from 941.400 francs)
• Withholding tax: Tariff tables for withholding tax (Quellensteuer) will also be adjusted and can be found on the FDF website (in German)

Adjusted deductions for families in Switzerland

Families living in Switzerland will also see some slight relief, as the deduction for third-party childcare (such as daycares and Kitas) will increase from 25.800 francs to 25.900 francs per child. 

For residents investing in their development, the amount that can be deducted from taxes for work-related education and training costs rises 100 francs to 13.100 francs.

Tax bracket creep (Kalte Progression) can happen when employers adjust salaries to take into account inflation, which means taxpayers can end up paying more tax. By adjusting federal taxes each year, the Swiss government helps ensure residents don’t end up being worse off from inflation-adjusted salary increases.