May 27, 2024

Social security contributions are also threatened in Switzerland!

The Germans will soon have to pay half their wages. A similar scenario could threaten Switzerland. Not least because of the 13th AHV pension.

Also in Switzerland, you are likely to have less money in your wallet at the end of the month. -Keystone

The basics in a nutshell

  • According to forecasts, Germans will have to give up up to half of their wages by 2035.
  • Social Security contributions are also likely to continue to rise in Switzerland, experts say.
  • However, it is up to politicians who have to bear the majority of this burden.

Germans will soon have less money in their wallets at the end of the month. In 2035, the middle-income earner without children will have to pay 51.75% of his wages to the state!

The newspaper “Bild” recently calculated this and sent our northern neighbor into turmoil.

And now economists warn: There is also a risk of a tax hammer in Switzerland!

“Compared to neighboring countries, Switzerland is not performing as well as many people assume,” says Jérôme Cosandé. He is head of research on sustainable social policy at the liberal think tank Avenir Suisse.

It is difficult to make a direct comparison with Germany

In fact, the Swiss will have more left at the end of the month. “In Germany, those things that we finance through taxes and contributions are also deducted from our wages,” Kosandi explains.

This includes wage tax, which is deducted directly in Germany. Or health insurance contributions that we finance with premiums.

“If we look at all mandatory taxes, we find that Switzerland is in the upper European middle line, exactly between Germany and Austria,” says the expert.

Government inputs and expenditures represent a high percentage of about 40% of Switzerland's GDP. This rate is higher in Scandinavian countries or France and lower in England or the United States of America.

The welfare state costs more and more

“Spending is constantly increasing in Switzerland,” Kosandi warns. As in Germany, this is largely due to the demographics of the community. “Pensions are becoming more expensive, health care costs are rising, and there is a need to invest more in education.”

Swiss Future's Jérôme Cosandé warns of rising social security contributions in Switzerland. -Keystone

As Stefan Henie of the Employers' Association told “Spending on social insurance has been increasing in Switzerland for many years. This trend is expected to continue.”

Unlike Germany, it is not possible to calculate who should bear how much of these costs, says Cosandy of Swiss Future. “It depends on what kind of funding the politicians decide.”

13. AHV pensions cause additional financing problems

This browser does not support the video component. Leuthold – Retirees from Frick AG explain what they will do with the 13th AHV.

However, the Swiss Confederation of Trade Unions (SGB), which successfully pushed the initiative for a 13th pension, appears calm.

Daniel Lambart, chief economist at SGB, tells that wage contributions have declined in recent years due to fewer unemployed people and fewer accidents. That is why he is convinced: “The 13th cycle of the AHV can therefore be financed from wage contributions without being noticeably higher than before 2020.”