Deductions are a key element in determining taxable income in Canton Schaffhausen. As in other Swiss cantons, taxation starts from gross income, but a range of deductions can substantially reduce the amount subject to federal, cantonal and communal income tax.

This page provides an overview of the main deduction categories under Schaffhausen income tax law and how they interact with federal rules. Exact deduction amounts, lump-sums and caps depend on the tax year and the cantonal legislation in force.

Principles of Deductions in Schaffhausen

Schaffhausen broadly follows the Swiss standard approach to deductions and recognises, among others:

• Employment-related and professional expenses,
• Mandatory social security and occupational pension contributions,
• Tax-privileged private pension savings (Pillar 3a),
• Insurance premium and, in some cases, interest-related deductions,
• Family-related deductions and social allowances,
• Property-related deductions for homeowners and landlords,
• Extraordinary and unavoidable expenses (e.g. high medical costs).

While the overall framework is similar to other cantons, Schaffhausen applies its own deduction amounts, ceilings and administrative practice.

Employment-Related Deductions

Employees in Schaffhausen can deduct expenses directly connected with earning their employment income. Typically, these include:

• Professional expenses – usually claimed as a lump-sum based on employment income. Taxpayers may opt to deduct effectively incurred costs instead where these are higher and sufficiently documented, subject to cantonal practice.
• Commuting expenses – costs for travel between home and the regular workplace, generally based on public transport. Deductions for private car use are allowed only under specific conditions (e.g. lack of adequate public transport, special working hours) and are subject to cantonal caps.
• Other job-related costs – such as mandatory professional memberships, required licences, or job-specific tools and equipment.

The choice between lump-sum and actual expenses depends on the taxpayer’s situation and the level of documented costs.

Social Security and Occupational Pension Contributions

Contributions to mandatory social security and occupational pension schemes are generally fully deductible. This includes:

• AHV/IV/EO contributions,
• ALV (unemployment insurance),
• Mandatory occupational pension contributions (2nd pillar),
• Recognised voluntary 2nd-pillar buy-ins within statutory limits.

These contributions are normally deducted at source and reported on the Swiss salary certificate, which forms the basis for the deduction in the tax return.

Private Pension Savings (Pillar 3a)

Contributions to tax-privileged private pension schemes (Pillar 3a) are deductible up to the annual federal maximum. Schaffhausen follows this federal framework without major deviations.

• Taxpayers affiliated to a 2nd pillar plan can deduct up to the standard limit,
• Self-employed taxpayers without 2nd pillar coverage may deduct a higher amount.

Pillar 3a deductions are relevant both at federal and Schaffhausen cantonal/communal level.

Insurance Premiums and Interest on Savings

Schaffhausen grants deductions for certain insurance premiums and, in some cases, interest on savings and similar income within combined federal and cantonal limits. Typically, this includes:

• Health insurance and qualifying life insurance premiums,
• Combined deductions for insurance premiums and interest on savings, subject to ceilings that vary by marital status and family situation.

The precise limits and conditions are set out in cantonal legislation and may be periodically adjusted.

Family-Related Deductions and Allowances

Taxpayers with dependants benefit from a range of family-related deductions and social allowances, for example:

• Child deductions for each dependent child,
• Deductions for dependants in need of support (e.g. parents or relatives),
• Special deductions or allowances for single parents.

Schaffhausen may also grant additional reliefs for households with modest incomes. The exact amounts depend on income level, marital status and number of dependants.

Two-Income Households and Second-Earner Relief

Households in which both spouses or registered partners are gainfully employed may benefit from specific relief mechanisms. In particular:

• At federal level, a second-earner deduction reduces the tax burden on the lower income within the couple.
• At cantonal level, Schaffhausen reflects dual-income situations in its rate structure and deduction system, mitigating the additional burden on two-income households.

These rules interact with childcare and other family-related deductions and should be considered together when completing the tax return.

Childcare Costs

Third-party childcare costs may be deductible when they are necessary to allow:

• Gainful employment by one or both parents, or
• Education or training of the parents.

Typical conditions include:

• Documented expenses (contracts, invoices),
• Recognised childcare providers (e.g. nurseries, daycare centres, after-school care, registered childminders),
• Annual maximum amounts per child according to cantonal limits.

Education and Training Costs

Schaffhausen generally allows deductions for continuing education and training that is directly related to the taxpayer’s current profession or professional advancement, such as:

• Professional development and continuing education courses,
• Postgraduate programmes linked to the existing occupation,
• Specialised seminars and courses that enhance professional skills.

Initial education leading to a first profession is typically not deductible, in line with federal practice.

Property-Related Deductions

Property owners in Schaffhausen must declare rental income or imputed rental value, but in return may claim a series of property-related deductions, including:

• Mortgage interest on loans secured by real estate,
• Property maintenance and repair costs, either as actual expenses or as a lump-sum defined by cantonal rules,
• Recognised renovation expenses that preserve, but do not enhance, the value of the property.

Value-enhancing investments are generally not immediately deductible and are treated as capital expenditure.

Extraordinary Expenses and Medical Costs

Certain extraordinary expenses may be deducted if they are unavoidable and exceed a defined proportion of income. Typical examples include:

• High medical and dental costs not reimbursed by insurance,
• Disability-related expenses and necessary assistance,
• Support payments to persons in financial distress that go beyond normal living expenses.

Thresholds and criteria are defined in cantonal law and administrative practice; detailed documentation is required to support such claims.

Cross-Cantonal and International Aspects

For taxpayers with income or assets outside Schaffhausen or abroad, deductions and relief mechanisms may arise in the context of:

• Double Taxation Agreements (DTAs),
• Unilateral relief provisions for foreign-source income,
• Inter-cantonal allocation and exemption-with-progression rules.

These rules do not always operate as “deductions” in the narrow sense, but they can reduce the income or tax allocated to Schaffhausen.

Interaction Between Federal and Cantonal Deductions

Many deduction items are relevant for both federal and Schaffhausen cantonal/communal tax, but:

• Federal and cantonal maximum amounts may differ,
• Some deductions exist only at one level,
• The same expense can have different effects in the federal and cantonal calculations.

When preparing the tax return, taxpayers must apply the correct rules separately in the federal and Schaffhausen sections.

Documentation and Evidence

The ability to claim deductions in Schaffhausen depends heavily on proper documentation. It is advisable to retain:

• Salary certificates and pension contribution statements,
• Tickets and invoices for commuting and work-related expenses,
• Contracts and invoices for childcare, education and training,
• Insurance premium statements,
• Bank and mortgage statements,
• Receipts for significant medical or extraordinary expenses.

Practical Considerations

The overall impact of deductions in Schaffhausen depends on:

• The type and level of income,
• The taxpayer’s family and housing situation,
• The availability and size of deductible expenses,
• The interaction between federal rules and Schaffhausen cantonal practice.

To understand your specific tax position, this Deductions section should be read together with the pages on Rates, Filing Requirements, Special Rules and Examples in the Schaffhausen income tax guide.