What a tax deduction actually saves you (2025 tax year)

A CHF 1'000 deduction does not take CHF 1'000 off your tax bill. It takes CHF 1'000 off the income your tax is calculated on. What you actually keep is the deduction multiplied by the rate that applies to the top franc of your income.

For the 2025 tax year, in figures: a married couple in the city of Zurich with CHF 100'000 of taxable income pays CHF 12'199.45 in income tax across federal, cantonal and municipal level, church tax aside. Add a CHF 1'000 deduction and the bill is CHF 11'973.68. The gap is CHF 225.77, a little over 22 centimes for every franc deducted.

That is not a disappointment, it is the arithmetic. It also explains why the same line is worth different amounts to different households.

A deduction is not a coupon at the till

A coupon reduces what you hand over at the till. A deduction works one step earlier: it shrinks the price before the till starts calculating.

The tax return follows a fixed order. All income is added up, the deductions come off, and what remains is your taxable income. Only then does the tariff put a rate on it, and only that rate produces francs.

So a deduction always works through the tariff. That is why "what is this worth to me?" can't be answered with the deduction's amount, only with the rate at the top of your income. The technical name is the marginal rate: the rate on your last hundred francs.

There's a second reason the number lands where it does: in Switzerland three levels tax the same income at once. The Confederation, the canton and the municipality all levy on the same taxable income, so one deduction shrinks the base for all three. That is how a 5 % federal rate turns into roughly 22 % of the deduction.

What CHF 1'000 does for the Bergers

The Bergers are married, live in the city of Zurich and reach CHF 100'000 of taxable income for the 2025 tax year. Federal and cantonal law work that income out under their own rules; here both land on the same figure.

The CHF 1'000 saves the Bergers CHF 225.77: CHF 50.00 federally and CHF 175.77 at cantonal and municipal level. Church tax is not part of this calculation.

The cantonal half of that bill is built differently from what most people picture. Zurich does not charge its tax in francs directly: the tariff produces a "simple cantonal tax", and canton and municipality each apply a multiplier to it. For 2025 the canton takes 98 % of it and the city of Zurich another 119 %. One franc of simple tax therefore becomes CHF 2.17 of actual bill in the city, and a deduction bites into that whole factor. The canton truncates the rate behind that simple tax to three decimals: 4.785 % at CHF 100'000, 4.752 % at CHF 99'000. That is why the saving below is CHF 175.77 and not a round number.

Why is the same deduction worth more to your neighbour?

Because the tariff is progressive: the higher your taxable income, the higher the rate on its top slice, which is exactly what a deduction removes.

Same CHF 1'000, same city of Zurich, same 2025 tax year, three married-couple incomes:

This also settles a common puzzle. The Bergers pay CHF 12'199.45 on CHF 100'000, which is 12.2 % of their taxable income. Yet the deduction works at 22.6 %. Both are correct: the first is the average across the whole income, low opening brackets included; the second applies only to the top slice a deduction removes.

The second lever is where you live. The Bergers save CHF 225.77 in the city of Zurich; the same family, same income, same receipt, saves CHF 187.70 in Kilchberg, where the municipal multiplier is 72 % rather than 119 %.

Tariffs, multipliers and ceilings belong to the 2025 tax year and are reset annually, so for another year it is worth reading the canton's current figures.

What comes off the tax bill itself

Some things in Swiss tax law hit the tax amount rather than the income, and a child shows both routes.

Federally, a child brings two separate reliefs. The child deduction of CHF 6'800 for the 2025 tax year comes off the income, so it is worth whatever your rate makes of it. The reduction of CHF 263 per child comes off the computed tax instead, provided the child lives in your own household. The smaller figure is the more direct one: the CHF 263 does not depend on your rate, only on there being that much federal tax to reduce. Cantons run their own child deduction, which differs from the federal figure and also works on the income.

The other case is investment income. Swiss banks withhold 35 % withholding tax on dividends and on interest from customer accounts, though interest is only caught once it passes CHF 200 in a calendar year. Where that income is declared in the securities schedule, the amount is normally refunded or credited against the tax bill; the refund carries further conditions and lapses after three years. It isn't a deduction at all, it is tax already paid coming back.

What this changes when you fill in the form

A CHF 500 receipt left in a drawer costs the Bergers CHF 113.97, not CHF 500. That takes the urgency out of hunting for the last slip, and it changes the order of work: a whole line nobody filled in weighs more than a small receipt documented perfectly.

The reverse holds too. Every line is worth more the higher your income: in the table above, the same deduction is worth a little over twice as much at CHF 200'000 as it is at CHF 60'000.

There is a floor. A deduction can take your tax to zero but not below, and it never becomes a payment to you. If your deductions use up your income on paper, the remainder has nothing left to work on.

Whether a given line applies to you, and at what amount, depends on your circumstances and may be worth checking against your own documents. TaxWize reads your uploaded records, maps them onto the lines of the return, and runs the result through the tariff and the multipliers of your municipality; every value can be checked and corrected.

To see roughly what a lower taxable income is worth where you live, use the tax comparison. For what the commuting and work-expense lines add up to, see commuting and work costs.

Sources

• Swiss Federal Tax Administration (ESTV), "Tabelle für die Berechnung der direkten Bundessteuer der natürlichen Personen", Form. 58c-2025 (ESTV/DVS 05.2025): married and single-parent tariff, CHF 1'816.00 at CHF 100'000 of taxable income; footnote 1 (remainders below CHF 100 are disregarded), footnote 3 (reduction of CHF 263 per child or dependent person): ur.ch, retrieved 03.09.2026
• Federal Act on Direct Federal Taxation (DBG, SR 642.11), as at 01.01.2025: Art. 35 para. 1 lit. a (child deduction), Art. 36 paras. 1 and 2 (tariffs), Art. 36 para. 2bis (reduction of the tax amount per child): fedlex.admin.ch, retrieved 03.09.2026
• Federal Act on Withholding Tax (VStG, SR 642.21), as at 01.01.2025: Art. 5 para. 1 lit. c (interest on customer accounts exempt up to CHF 200 per calendar year), Art. 13 para. 1 lit. a (35 % on capital income), Art. 21 and 22 (refund to individuals resident in Switzerland), Art. 32 para. 1 (claim lapses after three years): fedlex.admin.ch, retrieved 03.09.2026
• Canton of Zurich, "Aktuelle Gemeindesteuerfüsse" (cantonal multiplier 98 % for 2024 and 2025, 95 % for 2026 and 2027; municipalities set their own): zh.ch, retrieved 03.09.2026
• City of Zurich, "Steuerberechnung und Steuerfuss", municipal multiplier 119 % for the 2025 tax year (set in the city parliament's budget resolution of 12.12.2024): stadt-zuerich.ch, retrieved 03.09.2026
• Municipality of Kilchberg, "Budget 2025 sowie Festsetzung des Steuerfusses für das Jahr 2025", resolution of the municipal assembly of 03.12.2024: "Der erforderliche Steuerfuss für das Jahr 2025 wird unverändert auf 72 % festgesetzt": kilchberg.ch, retrieved 03.09.2026
• Canton of Zurich, official tax calculator for individuals: the canton derives the simple cantonal tax from a rate truncated to three decimals, and prints that rate itself. Married tariff, 2025 tax year: 4.785 % and CHF 4'785 at CHF 100'000 of taxable income, 4.752 % and CHF 4'704 at CHF 99'000: zh.ch, retrieved 03.09.2026
• Tax Act of the Canton of Zurich (StG, LS 631.1): § 35 (income tax tariffs, basic and married rates): zhlex.zh.ch, retrieved 03.09.2026