The cost of living in Switzerland vs Salaries

Several cost-of-living indexes rank Zürich, Switzerland as the third most expensive city in the world, even ahead of New York City and some have it ranked at the top along with Paris, Hong Kong, Tel Aviv, or Singapore. So those thinking of moving to Switzerland to work or even retire, should be well-informed about the cost of living before they decide to move.

In this post, we break down the average basic costs of living compared to typical salaries.

Switzerland

Switzerland is a land-locked country located in the centre of Europe. It has great history, and traditions as a neutral jurisdiction. Switzerland also prides itself in its economic stability (The inflation Rate in Switzerland averaged 2.30 percent from 1956 until 2023) however, it has been known as an expensive place to live and visit for some time. Further:

• It is a leader in finance, technology and science.
• Switzerland is also home to two highly-ranked international universities – the ETH Zurich ranked 6^th and EPFL in Lausanne ranked 14^th in the world in 2021.

Cost of Living

• The main basic cost items for living in Switzerland are:
  • Accommodation rental + utilities, which can also be expensive (especially electricity)
  • Obligatory insurances: health, accident, pension
  • Transport
  • Food & Entertainment
  • Clothing

Housing

The cost of living in Switzerland starts with the cost of renting an apartment or house to live. The general rule of thumb is that the total price of the rent should not exceed 30% of the gross salary.   The above means that a good salary is required to just get by in some of Switzerland’s most expensive cities. However, the cost of living can be reduced by residing outside of the major cities.

• Unlike in other countries, the majority of people in Switzerland live in rented accommodation. In fact in 2021, 61% of the total population of Switzerland lived in a rented or cooperative dwellings.
• This compared to the U.S,. where it is almost the opposite and where the number of people living in their own properties stands at 66% (230 million people).
• In Switzerland, the urban cantons of Basel-Stadt and Geneva have the highest proportion of rented dwellings at 83% and 78% respectively, whereas the cantons Appenzell Innerhoden and Valais have the lowest at 38% and 40 % respectively.
•  According to realtor sources, the median monthly rent for apartments on the market is CHF1’580. The monthly rent of 80% of properties falls between CHF890 and CHF2’740. And the average annual rent per m² in Switzerland is CHF267 m2 / year. Cities are more expensive than regional towns.
• Utilities and garage or parking space is usually charged separately in addition to the basic rental price. And this can be significant depending where the apartment or housing is located. Prices for a garage or parking space typically vary from between CHF50 per month to around CHF300 per month.

Food & Entertainment

Average prices in Switzerland are higher than most other countries including the United States. Food shopping in Switzerland costs around 1.5 times more than in the US. But this is a difficult expense item to approximate, given that everyone has different tastes and life-styles and prices do vary in Switzerland depending on location. That said a typical shopping basket for a single person would be around CHF1’000 per month. Dining out or going to bars, pubs and clubs will significantly, and rapidly increase this category spend.

Health and Dental Care

The healthcare in Switzerland is universal and is regulated by the Swiss Federal Law on Health Insurance. There are no free state-provided health services, and private health insurance is compulsory for all persons residing in Switzerland (within three months of taking up residence or being born in the country).

• There are a variety of health insurance plans that range from basic to comprehensive. For singles or families. The more the insured person pays each month, the better the cover.
• The deductible amount in a health insurance plan is the cost sharing that every adult in Switzerland has to pay for his or her treatment costs per calendar year.
  • Insured persons can choose between CHF 300, 500, 1’000, 1’500, 2’000 or 2’500.
  • That means insured persons take care of at least the first CHF 300 up to a maximum of the first CHF 2’500 of their treatment costs per calendar year.
• In 2023, the average monthly premium for adults over 26 is CHF 397.20.
• People under 26 pay lower premiums, at around CHF 279.90 per month.
• Dental care in Switzerland is expensive and private. Supplementary insurances can be purchased however.

Transport

Almost any part of the country can be reached by bus or by train – even remote mountain areas. Switzerland is one of the countries where people use public transport the most, especially the train. Although it can be expensive for single trips, there are many special, and season tickets that make public transport quite affordable.

Clothing

Just like almost everything else in Switzerland, clothing is expensive. Compared to the three neighbouring countries (Italy, Germany, France)  you can expect to pay around 25% more.

Salaries

So now we know what the basic monthly costs are likely to be to live in Switzerland, what about salaries? According to the Swiss Federal Statistical Office, the average gross salary in Switzerland is CHF 79’980 per year which equals CHF 6’665 per month. By gender: men earn on average approximately CHF 6’963 gross monthly and women CHF 6’211. So which sectors pay best?

Average salary by sector

The Federal Statistical Office has compiled the following average earnings by sector (2020). This is just a sample of some sectors. For more information click the link provided.

Source: www.bfs.admin.ch 

Average Salary by Position 

Source: www.bfs.admin.ch 

Taxes

In Switzerland income taxes are levied at three different levels:

• Federal level (which is the same all over Switzerland)
• Cantonal level (which is the same within a certain canton and is based on the canton’s own tax law and tax rates)
• Municipal level (municipalities follow the cantonal tax law, but are independent)

In Switzerland, the average single worker faced a net average tax rate of 18.5% in 2022, compared with the OECD average of 24.6%. In other words, in Switzerland the take-home pay of an average single worker, after tax and benefits, was 81.5% of their gross wage, compared with the OECD average of 75.4%.

Source tax

This is paid by foreign nationals working in Switzerland who do not hold a settlement permit (C permit), as well as employees working in Switzerland who live abroad, regardless of their nationality (for example international weekly residents, short-term residents, lorry drivers, cross-border commuters).

Summary: Although we have only shown a cross section of the typical costs in Switzerland, an average of the cost of living in Switzerland point to:

• a family of four has estimated monthly costs are around CHF 5’600 without rent.
• a single person has estimated monthly costs are CHF 1,500 without rent.

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