1. Overview of Taxable Income at Federal Level

Pour les personnes physiques, l'impôt fédéral direct est prélevé sur revenu net. The starting point is the taxpayer’s gross income from all taxable sources, which is then reduced by federal deductions to arrive at revenu imposable.

Main income categories relevant at federal level include:

• Revenu de l'emploi (salary, bonuses, benefits in kind),
• Self-employment and business income,
• Revenus des investissements (interest, dividends, income from certain funds),
• Revenus immobiliers and imputed rental value,
• Pension and social security income,
• Other recurring income such as certain maintenance payments.

Some income is specifically exempt at federal level (for example, many private capital gains), which is covered in a separate guide on Revenus exonérés et non imposables.

2. Employment Income

Employment income is a core component of taxable income under the DBG. It includes, among others:

• Base salary and wages,
• Bonuses, commissions and variable pay,
• Overtime and allowances (e.g. shift or hardship allowances),
• Benefits in kind such as private use of a company car, housing provided by the employer, or subsidised meals,
• Stock options and other employee participation plans, taxable according to specific federal rules.

Employment income generally becomes taxable in the period in which it is earned or paid, depending on the nature of the payment and local practice.

2.1 Reimbursed expenses

Genuine reimbursement of properly documented business expenses is usually not taxable. However, flat-rate expense allowances without sufficient justification can be treated as taxable salary.

3. Self-Employment and Business Income

Income from self-employment is fully taxable at federal level. This includes:

• profits from commercial, professional or independent activities,
• income from partnerships and unincorporated businesses,
• side businesses operated on a commercial basis.

The taxable income is generally the net business profit according to tax accounts, after deducting allowable business expenses.

3.1 Distinguishing self-employment from employment

Whether a person is treated as an employee or self-employed has important consequences for:

• social security contributions,
• deductible business expenses,
• treatment of assets as business vs. private assets.

The classification is based on economic factors such as independence, assumption of risk, multiple clients, and use of own infrastructure.

4. Investment and Financial Income

Under Swiss federal law, revenus des investissements is generally taxable, while many private capital gains are not. Taxable investment income typically includes:

• Intérêt from bank accounts, bonds and other debt instruments,
• Dividendes from Swiss and foreign companies,
• certain distributions from collective investment schemes,
• Income deemed to be from funds (e.g. taxable fund components identified in annual fund reports).

4.1 Qualified dividend relief

For significant direct shareholdings in companies, individuals may benefit from partial taxation of dividends at federal level, reducing the effective tax burden. Specific participation thresholds and conditions apply.

4.2 Foreign-source investment income

For Swiss residents, foreign-source investment income is generally taxable at federal level, with potential relief for foreign withholding taxes under double tax treaties.

5. Real Estate Income and Imputed Rental Value

Real estate income relevant for the federal tax base includes:

• Revenus locatifs from Swiss and foreign real estate (for residents),
• les valeur locative imputée of owner-occupied property in Switzerland,
• certain income from rights in rem and usufruct arrangements.

For owner-occupied property, Switzerland typically taxes a notional or imputed rental value while allowing deductions for maintenance, repairs and mortgage interest. The exact methodology may vary between cantons, but the income is relevant for the federal tax base as well.

6. Pension, Social Security and Replacement Income

Many forms of pension and social security income are taxable at federal level, including:

• Swiss social security pensions (AHV/AVS),
• occupational pension benefits from the second pillar (BVG/LPP), whether paid as annuities or lump-sum distributions, subject to specific rules,
• voluntary pension arrangements (third pillar, pillar 3a) when benefits are drawn,
• foreign pensions, depending on treaty allocation and Swiss domestic rules.

Autres replacement income such as daily sickness benefits, unemployment benefits and accident insurance pensions can also form part of taxable income.

7. Other Taxable Income Categories

In addition to the main categories above, other items can qualify as taxable income under the DBG, for example:

• certain alimony and maintenance payments received,
• regular payments from foundations or trusts, where taxable in Switzerland,
• compensation for the assignment of rights or for non-compete agreements,
• prizes and awards, if they represent a substitute for earnings.

The exact treatment can depend on the legal and contractual framework and may require a careful review of the underlying documentation.

8. Capital Gains: Taxable vs. Tax-Free

A key distinction in Swiss federal income tax is between:

• Taxable capital gains (typically on business assets), and
• Tax-free private capital gains (on movable private assets, under certain conditions).

In many cases, gains realised on the sale of privately held shares, bonds or other movable assets are not subject to federal income tax, as long as the taxpayer is not considered a professional securities trader and the assets are held as private investments.

By contrast, capital gains on les actifs des entreprises (including real estate allocated to a business) are generally treated as taxable income. For real estate, special cantonal property gains taxes may also apply.

9. From Gross Income to Taxable Income

To determine the federal revenu imposable, the tax authorities:

1. aggregate all composantes du revenu imposable for the tax period,
2. exclude éléments exonérés d'impôt (e.g. qualifying private capital gains, certain insurance benefits),
3. deduct allowable federal deductions (professional expenses, social security contributions, certain insurance premiums, debt interest, and social deductions),
4. arrive at the revenu net imposable which forms the basis for applying the federal tax scale.

The detailed list of deductions and social allowances is described in the dedicated guide on Déductions fiscales fédérales.

10. Coordination with Cantonal and Communal Taxes

The federal definition of taxable income is closely aligned with cantonal tax bases. Thanks to the tax harmonisation framework:

• les same income declaration is used to calculate both federal and cantonal taxes,
• differences usually arise only in deductions, social allowances or tax incentives, not in the fundamental classification of income.

Nonetheless, the overall tax burden can vary significantly depending on the canton, due to different cantonal rates and multipliers. For a comparison of cantonal tax environments, see: Impôt suisse sur le revenu par canton .

11. Next Steps and Related Guides

Understanding which items are included in revenu imposable is only the first step. To get a complete picture of the Swiss federal tax position of an individual, you should also review:

• Revenus exonérés et non imposables – what can be excluded from the federal tax base,
• Déductions fiscales fédérales – how to reduce taxable income legally,
• Taux et tranches de l'impôt fédéral – how taxable income translates into actual tax payable,
• Résidence fiscale fédérale suisse – who is taxed on worldwide income vs. Swiss-source only.

Ensemble, ces guides fournissent une une feuille de route pratique en anglais pour analyser l'impôt fédéral suisse sur le revenu des personnes physiques.