In certain regions of Switzerland, cross-border cooperation has increased in recent years. In many places, cross-border commuters cross the border every day, for example in the Basel or Geneva area. But what about health insurance, taxes, contributions and social security? As a cross-border commuter, you should be aware of the following.

Genf Tourismus
Photo: Geneva Tourism

The interconnectedness is particularly close in the Basel area and in the canton of Geneva: Every day, several tens of thousands of cross-border commuters commute from France to the agglomeration at Lake Geneva – these are on the one side French nationals, but, conversely, more and more Swiss nationals, too, who can barely afford the high rents in the city on the Rhône. This model is also very widespread in the border triangle of Basel, in the Lörrach area or in Ticino.

In short, a cross-border commuter is an employee who lives in a foreign country close to the border and works in Switzerland. The important thing here is that the employee returns to his or her residence on the other side of the border every day.

Cross-border commuter status: Advantages and disadvantages

Cross-border commuters who work in Switzerland must generally meet the following requirements:

  • They are resident outside Switzerland and are registered there as nationals of an EU or EFTA state.
  • They have proof of a professional activity and/or employment or exercise of self-employed activity in Switzerland (usually an employment contract or proof of self-employed status).

In practice, very different motives and factors play a part here. On the one hand, Switzerland is considered an attractive place to work, with good working conditions and dynamic companies. Wage levels are well above the EU average. Added to this, qualified professionals and specialists are in high demand in the Swiss economy. It is important to bear in mind, however, that living costs and rents in Switzerland are also relatively high! Those who live within commuting distance – for example in southern Germany or in the border region near Geneva – will therefore consider keeping their residence at their place of origin.

These days, cross-border commuters from EU and EFTA Member States enjoy extensive freedom (free movement of persons). This area now includes 30 states, including Germany, France, Italy and many more. Geographical and occupational mobility applies as a general rule within this economic area. Citizens and/or cross-border commuters are free to live anywhere in the EU/EFTA area and, under certain conditions, to work anywhere in Switzerland. Either way, the condition for this is a weekly return to the foreign place of residence.

Application to the cantonal authority

Cross-border commuters must register with the competent authority of the respective canton. To ensure that everything is in order, cross-border commuters need to apply for a Permit G. The following documents are usually required for this:

  • Employment contract or certificate of employment or proof of self-employment in Switzerland
  • Valid certificate of main residence – in Germany, for example, a confirmation of residence.
  • Current passport photo
  • A copy of your passport or identity card.
  • For school pupils or students: Confirmation from the school or a certificate of enrolment from the university.

Depending on the cantonal authority, other documents may also be required. In practice, the employer generally takes care of many formalities and submits the application. However, the relevant application form contains information that must be completed by both the applicant and the employer.

Mandatory for cross-border commuters: Health insurance

What is also important to know is that cross-border commuters need to take out compulsory health insurance in Switzerland. “In this context the principle of place of employment applies,” explains Lukas Rieder, spokesperson for the State Secretariat for Migration (SEM) in Bern.Unlike in Germany, for example, the employer does not contribute to health insurance. Furthermore, certain conditions must be fulfilled when working in Switzerland; these mainly concern the employer. The employment conditions must be in line with the usual local practices (working conditions, employment contract, salary, etc.). In addition, the so-called precedence to nationals comes into play, i.e. the employer has to prove that it was unable to fill the position elsewhere.

For citizens of EU and EFTA states, the cross-border commuter permit is generally valid for five years. The prerequisite for this, however, is that the employment contract is concluded for an indefinite period or is valid for at least one year. If the applicant submits a contract with a shorter period of validity, the cross-border commuter permit will be limited in time accordingly. For a period of employment of less than three months, the authorities stipulate that cross-border commuters register online (registration procedure):

As mentioned above, professional and geographical mobility applies for working persons from EU and EFTA Member States. This means, in principle, that they are entitled to change employers or jobs within Switzerland. “There is a mandatory duty to notify, however, when changing jobs,” explains the spokesperson of the responsible State Secretariat.

Salary in Switzerland: gross or net?

Cross-border commuters need to consider not only the obligation to take out health insurance, but of course also Swiss social security law in general (especially the state pension scheme AHV). This results in further costs and contributions being deducted from the salary. After all deductions, net wages are obviously lower than gross wages.

Those who work for a Swiss employer pay their contributions to Swiss social security and to the company pension scheme and/or pension fund. Analogously to Swiss employees who make their contributions, this results in entitlements to pensions, for example a Swiss AHV pension in Swiss francs later on. The Swiss pension system consists of old-age and survivors’ insurance (AHV) and the supplementary employer’s occupational pension scheme (pension funds) as well as private pension provision (“three pillars“).

Beware: In the event of unemployment, cross-border commuters must register with their place of residence abroad.

Difference to status as a resident

The main difference to persons with a residence or settlement permit is that cross-border commuters remain registered at their previous place of residence and also pay taxes there. However, a withholding tax of 4.5 per cent is deducted directly from the income earned in Switzerland. Switzerland has concluded corresponding double taxation agreements with neighbouring countries such as Germany, France, Austria and Italy.

The status of cross-border commuters differs also in that they cannot easily acquire property in Switzerland. Exceptions are commercial property or a second home. In principle, however, they are considered “persons abroad” under Swiss law and are subject to the restrictions of the Lex Koller. The purchase of a property with residential use or, at a later point, a main residence is not possible with a G Permit – or is possible only with the express permission of the respective canton.

Conclusion: Networking and cooperation in the border regions is indeed on the increase. However, the formal aspects, the laws and regulations, have by no means become easier! It is worthwhile preparing thoroughly in advance or seeking professional advice.

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