Switzerland has an enviable reputation for being a rich country. And with one of the highest GDP’s per capita in the world (2022 ranked 8th globally) on the surface this may seem justified. In reality however, things look slightly different.
In this post we lift up the hood on the Swiss economy and take a look at various aspects of wealth and wealth distribution in Switzerland. Are all Swiss residents rich? Are salaries as high as they seem? How far does the average salary go? What about basic living costs? We answer these questions and more now.
Wealth distribution
Switzerland is divided into 4 main language regions, split over 26 cantons or states. The top 10 % of earners in Switzerland, take home approximately 1/3 of total earnings. And the wealthiest 10% of the Swiss population own 63 % of the country’s capital.
A high percentage of Switzerland’s wealthiest residents live in the cantons of Zug and Schwyz. Not surprisingly, these cantons also have significantly lower levels of income tax compared with elsewhere in Switzerland. They also are home to many international companies offering high salaries for skilled workers.
It is estimated that the richest 10% of the population in canton Zug earns almost 50% of the total income for the canton, and provide 88 % of the canton’s tax revenue.
Canton Zug and canton Schwyz are top contributors to a national system that operates in Switzerland for financial adjustment of payments. This was devised to balance out cantonal finances, where well-off areas make contributions to developing cantons.
Home Ownership
Given that banks in Switzerland have very strict rules for offering mortgages (minimum 20% deposit) and the price of property is high – there is very limited opportunity for many “ordinary” citizens in Switzerland to own their own homes. Most people therefore spend their entire lifetime renting an apartment to live in.
Much of the wealth in Switzerland is held by so called “legacy” families, who commission financial experts to build and manage a portfolio of assets for future generations within their families.
Income Gap
Despite a polarised wealth distribution situation, where Switzerland has a much higher inequality than the rest of Europe – the income gap in Switzerland remains stable. The average salary in Switzerland in 2022 was CHF6’507 per month. Depending which one of the 26 cantons one lives in, there are major differences in income tax, cost of living and as a result life quality.
Average Monthly Salary
The basic expenditures for the average monthly salary are quite difficult to calculate in Switzerland due to the fact that living costs vary significantly depending on where one lives. The numbers shown below may differ therefore, depending on location but are an “average” indication.
| Item | Description | Cost CHF |
| Salary | Monthly Salary of CHF6’500 minus social costs | 5’900
|
| Rent | Monthly rent for 2 bedroomed Apartment | 1’950 |
| Health Insurance | Family of 3 compulsory health insurance | 1’250 |
| Tax | Either taxed at source or paid at end of year | 850 |
| Insurances | Accident, life, etc. | 450 |
| Food, Travel & Expenses | 1’000 | |
| Total | 5’500 | |
| Left over | 400 |
Percentage of Millionaires
Despite the apparent high cost of living and low net monthly wealth when we calculate the average salary vs costs, Switzerland reportedly still has the highest rate of millionaires worldwide. Data from the Swiss National Bank shows Swiss residents have assets averaging CHF 460’000. In fact, the last two decades witnessed wealth per adult rising by 53% and 16.4 % of the adult population in Switzerland now owns assets worth more than one million U.S. dollars.
Low Paid Jobs
Despite reports of increased wealth though assets, there are around 320,000 jobs in Switzerland now considered to be “low paid”. Workers in these jobs earn a gross monthly salary on average, of under CHF4’335.
The main sectors for the lowest paid workers in Switzerland are: personal services such as hairdressing and cleaners, the retail sector, the food and restaurant sector, and hotels and accommodation. The canton of Ticino has the highest percentage of low salary earners (24.7% of the total in Switzerland). This is almost double the national average. And just over half of all low paid jobs (53.8%) were occupied by foreign residents. And almost 50% of poorly paid work was offered by companies with fewer than 50 staff.
Summary: Switzerland is generally speaking a rich country, but wealth is unevenly distributed and a high percentage of people work in low paid jobs. Living costs are expensive, although this differs depending on region and canton. Up until recently there were over 130’000 open job positions and not enough skilled workers to fill these. This situation may be set to change soon as due to recent developments in the banking sector, where more skilled workers could soon be coming onto the job market.
In conclusion: the Swiss may be soon also taking the advice given by Winston Churchill to his wife regarding money: “Nothing expensive is to be bought, by either of us, without talking it over.”
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