1. Overview of Federal Tax Deductions

For individuals, the Direct Federal Tax is levied on net income. Calculating net income involves:

1. aggregating all taxable income components,
2. excluding tax-exempt items, and
3. subtracting allowable deductions as defined under the DBG.

The main categories of federal deductions include:

• Professional expenses related to employment,
• Social security and mandatory pension contributions,
• limited insurance premium and health-related deductions,
• Debt interest within statutory limits,
• Voluntary pension contributions (pillar 3a),
• Family and social deductions for children and dependants,
• deductions for alimony and support payments in certain cases.

2. Professional Expenses (Employment-Related Costs)

Employees may deduct professional expenses incurred in the exercise of their employment. These costs are intended to reflect necessary outlays to earn income and typically include:

• Travel and commuting costs between home and the place of work (subject to federal limits),
• Work-related costs such as specialised tools or equipment, where not provided by the employer,
• Professional training and continuing education costs, if they qualify under the DBG.

In practice, tax authorities often allow:

• a standard lump-sum deduction for professional expenses, or
• a deduction of actual expenses, where higher and properly substantiated.

The choice between lump-sum and actual expense deduction depends on the canton and the individual’s situation, but the underlying legal basis for professional expenses is harmonised at federal level.

3. Commuting, Meals and Other Employment Costs

Certain employment-related costs are treated separately within the broader professional expenses category.

3.1 Commuting expenses

Employees can typically deduct reasonable costs for commuting between their home and place of work, subject to a maximum deduction at federal level. Depending on the canton, taxpayers may choose between:

• deducting the cost of public transport, or
• in specific circumstances, deducting car expenses according to approved rules.

3.2 Additional meal costs

Where an employee cannot reasonably take meals at home (due to distance or working hours), the tax authorities may grant a deduction for additional meal costs, often in the form of a lump-sum deduction, subject to conditions.

3.3 Home office and mixed expenses

In certain cases, a deduction may be allowed for a home office, particularly where the employer does not provide a suitable workplace. The rules are practice-driven and can vary between cantons, but the deduction still affects the federal tax base.

4. Social Security Contributions and Mandatory Pension Contributions

Contributions to mandatory social security systems are generally deductible at federal level, including:

• AHV/AVS, IV/AI, EO/APG and ALV/AC employee contributions in Switzerland,
• mandatory contributions to recognised occupational pension schemes (second pillar – BVG/LPP),
• contributions to unemployment insurance and certain similar schemes.

These contributions reduce the tax base because they are a precondition for receiving later pension or insurance benefits, which will generally be taxable in the future.

5. Insurance Premiums and Health-Related Deductions

Individuals may deduct a portion of their insurance premiums and certain health-related expenses at federal level, subject to statutory maximum amounts. Typical eligible items include:

• premiums for health and accident insurance,
• selected life insurance premiums (where not treated under pension rules),
• unreimbursed medical expenses exceeding a percentage threshold of net income, depending on the federal rules in force.

These deductions are often combined into a single capped deduction at federal level, and the amount can vary depending on marital status and family situation.

6. Debt Interest and Financing Costs

Interest paid on private debt is generally deductible at federal level, but only up to a defined limit. The DBG typically allows deduction of:

• interest on mortgages and other loans,
• interest on consumer loans and credit lines,
• other private debt interest, within the statutory cap.

The overall deduction for private debt interest is limited and may be restricted to:

• the amount of taxable investment income plus a small additional margin (a percentage of net assets).

For real estate, mortgage interest is typically deductible alongside maintenance costs, while the imputed rental value of owner-occupied property is taxable.

7. Voluntary Pension Savings (Pillar 3a)

Contributions to recognised tax-privileged pension savings under pillar 3a are deductible at federal level within annual limits. The maximum allowable amount depends on:

• whether the individual is already affiliated with an occupational pension plan (second pillar), and
• whether the individual is self-employed without a second pillar plan.

Pillar 3a contributions reduce current taxable income, but pension benefits received later (lump sum or annuity) are typically taxed at preferential, separate rates. Detailed rules and planning aspects are discussed in the guide on Federal Taxation of Pension and Retirement Income.

8. Family and Social Deductions

The DBG provides social deductions designed to take into account family responsibilities and the ability to pay. Common federal social deductions include:

• Child deductions for dependent children,
• Deductions for dependants supported by the taxpayer (for example parents or other relatives),
• deductions for childcare costs for children below a certain age, subject to conditions and limits,
• special deductions for married couples or single parents, to alleviate the impact of joint taxation or single-income constraints.

These social deductions are applied after the calculation of net income and can significantly reduce the federal tax burden of families with children or dependants.

9. Alimony and Support Payments

Certain alimony payments and maintenance contributions can be deducted from taxable income at federal level, especially when:

• payments are made in cash to a separated or divorced spouse, and
• the recipient is taxable on the amounts received.

Conversely, child support payments are often not deductible for the payer and are not taxable for the child, in line with Swiss policy to protect family income at lower levels. The exact treatment depends on the legal structure of the arrangement and the DBG provisions.

10. Deductions for Self-Employed Individuals

For self-employed individuals, many deductible items are treated as business expenses rather than personal deductions. The taxable income is typically the net profit shown in the tax accounts, after deduction of:

• ordinary and necessary business expenses,
• depreciation on business assets according to tax rules,
• employer contributions to pension and social security schemes,
• other operating costs essential to generating business income.

In addition to business expenses, self-employed individuals may also claim personal deductions such as pillar 3a contributions, insurance premium deductions and social deductions, where applicable.

11. Coordination with Cantonal and Communal Deductions

While the basic framework for deductions is harmonised at federal level, cantonal and communal tax laws may:

• apply different maximum amounts for specific deductions (for example commuting costs or childcare),
• offer additional deductions or incentives (for example for environmentally friendly investments),
• grant larger or smaller social deductions depending on family circumstances.

As the same income and deductions form the tax base for both federal and cantonal taxes, the overall effect on the taxpayer’s burden depends heavily on the canton of residence. For a cantonal overview, see: Swiss Income Tax by Canton .

12. Practical Considerations and Documentation

To make full and compliant use of federal tax deductions, taxpayers should:

• keep receipts and invoices for professional expenses and commuting costs,
• retain insurance and pension contribution statements,
• obtain interest and loan statements from banks and lenders,
• document alimony and support payments with legal agreements and bank transfers,
• keep evidence of childcare costs and eligibility for child or dependant deductions.

Good documentation simplifies the tax return process, reduces the risk of adjustments by the authorities and is particularly important in cross-border and multi-cantonal situations.

13. Next Steps and Related Guides

Federal tax deductions are a key driver of the ultimate Swiss federal tax burden. To obtain a complete picture of an individual’s situation, you should also review:

• Taxable Income Under Swiss Federal Law – the starting point for the income base,
• Exempt and Non-Taxable Income – which receipts can be excluded from taxation,
• Federal Tax Rates and Brackets – how net taxable income is translated into tax due,
• Swiss Federal Tax Residency – which individuals can claim deductions as Swiss residents.

Together, these guides form a practical, English-language reference for analysing Swiss federal income tax for individuals.