Paying taxes in Switzerland involves more than just filing an annual return. For many individuals, particularly the self-employed or those with additional untaxed income, paying federal taxes in advance is a critical part of managing one’s tax obligations. The advance tax system ensures that taxes are collected throughout the year rather than in one large payment after filing. In this guide, we’ll explain how to estimate and pay advance federal taxes in Switzerland as an individual, step by step.
1. What Is Advance Federal Tax?
Advance federal tax (also referred to as “Vorauszahlung” or “acompte d’impôt”) is a prepayment of the income tax you are expected to owe for the year. It is especially relevant to:
- Self-employed individuals
- Property owners earning rental income
- Individuals with investment income, pensions, or foreign income
- Taxpayers not subject to tax-at-source (Quellensteuer)
These prepayments help both the taxpayer and the authorities by distributing the tax liability across the year and avoiding large end-of-year balances or penalties.
2. Is It Mandatory to Pay in Advance?
No, advance payments are not mandatory for federal taxes. However, they are highly encouraged because:
- You avoid interest on underpaid taxes
- You may receive a small credit interest on voluntary prepayments
- It ensures better financial planning and budgeting
At the cantonal level, advance payments may be mandatory or structured differently depending on the canton’s regulations.
3. How Are Advance Tax Payments Calculated?
Advance payments are typically based on your last tax assessment. For new taxpayers or those with significant income changes, you can estimate the payment based on projected income, deductions, and tax rates.
Step-by-step estimation:
- Estimate your gross annual income (employment, self-employment, rental, dividends, etc.)
- Deduct applicable deductions (pension contributions, insurance, professional expenses, etc.)
- Determine your net taxable income
- Apply federal income tax rates to calculate estimated tax due
- Divide the total by the number of payment periods (usually quarterly)
Example: If your estimated federal tax liability is CHF 6,000 for the year, you might choose to pay CHF 1,500 quarterly or CHF 500 monthly.
4. Where Do You Find the Tax Rates?
Federal tax rates are progressive and increase with income. The Swiss Federal Tax Administration (ESTV) publishes up-to-date tax tables for federal income tax. You can use the “Steuerrechner” or online tax calculator to estimate your liability.
These calculators consider filing status (single, married), children, and canton of residence, though they focus on federal tax.
5. How to Make Advance Payments
Advance payments can be made directly to the Federal Tax Administration using bank transfer, online banking, or payment slips. Most cantons also allow online payments through eTax portals. Here’s how to do it:
- Log into your canton’s tax payment system (or check the federal payment instructions)
- Enter your tax ID/reference number
- Input the amount you wish to pay
- Select the payment frequency (monthly, quarterly, or in full)
- Complete the bank transfer using the IBAN and payment slip details provided
Tip: Always include your tax reference number to ensure the payment is correctly allocated.
6. What If You Overpay?
If your advance payments exceed your actual federal tax liability, the excess amount will be refunded after your final tax assessment. The refund will be issued to your registered bank account.
You may also be eligible to receive a small amount of “Vergütungszins” (repayment interest) on your overpayments, depending on the amount and timing of your payments.
7. What If You Underpay?
If you pay too little in advance, and your final assessment shows a balance due, you must pay the difference by the deadline stated in the tax bill. Interest (typically 3–5%) may apply to underpaid tax from the date it was due.
Some cantons may send reminders or provisional invoices mid-year, especially if your income changes drastically or your last tax bill was substantial.
8. When Are Advance Payments Due?
There’s no fixed federal schedule, but many taxpayers choose to pay:
- Monthly (12 equal payments)
- Quarterly (March, June, September, December)
- Annually (in a single payment before March 31)
Your canton may suggest a payment schedule. The federal system is more flexible, and voluntary payments are accepted any time during the year.
9. What Documentation Is Needed?
For estimation purposes, you should gather:
- Latest tax assessment notice
- Salary slips or business income estimates
- Bank statements and investment income forecasts
- Expected deductions (3a pension contributions, health insurance premiums, etc.)
These documents help you make a realistic estimate of your expected income and deductible expenses.
10. Can You Adjust Payments Mid-Year?
Yes. If you anticipate a change in income—such as starting a new job, losing employment, or moving cantons—you can modify your advance payments. Simply reduce or increase your payment amounts. If necessary, you may also contact the tax office to inform them of your updated income situation.
11. Benefits of Paying Advance Federal Tax
- Reduces interest penalties for underpayment
- Encourages budgeting through predictable payments
- May earn interest on overpayments
- Improves financial discipline for self-employed individuals
12. Digital Tools and Support
Most cantonal tax offices provide digital access for payment history, advance invoices, and calculators. Some helpful tools include:
- Federal Tax Calculator (ESTV)
- eTax portals for each canton
- Swiss PostFinance and bank tools with tax templates
13. Real-Life Example
Example: Luc, a freelance graphic designer in Bern, expects a taxable income of CHF 85,000 in 2025. Based on last year’s assessment and estimated deductions, his federal tax due is projected at CHF 5,500.
Luc decides to make monthly payments of CHF 460 starting in February. By December, he has paid CHF 5,520. His final tax bill is CHF 5,400. The excess CHF 120 is refunded to his bank account the following year.
Conclusion
Advance tax payments are a responsible and strategic approach to managing your Swiss federal tax obligations. Whether you’re self-employed, receive rental income, or simply want to spread your tax burden throughout the year, advance payments help you stay compliant and financially prepared. Estimating your liability using tax calculators, planning your payment frequency, and keeping detailed records will ensure a smooth process and minimize your year-end stress.
When in doubt or if your income situation is complex, don’t hesitate to consult a tax advisor who can help you navigate the federal and cantonal systems with precision.
