Deductions play a central role in determining your taxable income in Canton Aargau. While the gross income figure is the starting point, a range of deductions can substantially reduce the amount on which federal, cantonal and communal income tax is calculated.

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

Principles of Deductions in Aargau

In broad terms, the Swiss and Aargau tax systems allow deductions for:

• Expenses directly linked to earning income,
• Certain social security and pension contributions,
• Specific private expenses recognised as tax-deductible (e.g. insurance premiums, childcare), and
• Family-related allowances and social deductions.

Some deductions apply at both federal and cantonal level, while others may exist only in the Aargau tax law or differ in amount and conditions between the two levels.

Employment-Related Deductions

Employees in Aargau can usually claim deductions for costs incurred in earning their employment income. These often include:

• Professional expenses – such as work-related tools, professional literature, and in some cases home office costs, subject to the applicable rules.
• Commuting expenses – travel between home and the regular workplace, either based on public transport costs or, where allowed, private car use, typically subject to caps or limitations.
• Other job-related costs – for example, certain mandatory professional memberships or licences, where recognised by tax law.

Aargau may allow either a lump-sum deduction for professional expenses or the deduction of actual costs, subject to documentation and local practice.

Social Security and Pension Contributions

Contributions to mandatory social security and pension schemes are usually deductible, including:

• AHV/IV/EO (old-age, survivors, disability and loss-of-earnings insurance),
• ALV (unemployment insurance),
• Occupational pension contributions (2nd pillar),
• Recognised buy-ins into the 2nd pillar, subject to specific conditions and caps.

These contributions are typically deducted at source from employment income and reflected in the salary certificate, which forms the basis for the deduction in the tax return.

Private Pension Savings (Pillar 3a)

Contributions to recognised tax-privileged private pension schemes (pillar 3a) are generally deductible up to statutory limits. The maximum deductible amount differs depending on whether you are:

• Affiliated to a 2nd pillar occupational pension plan, or
• Not affiliated (e.g. self-employed without 2nd pillar coverage).

Aargau follows the federal framework for pillar 3a, with the exact annual maximum amounts set at federal level for each tax year.

Insurance Premiums and Interest on Savings

Aargau allows certain deductions for:

• Qualified insurance premiums (e.g. life and health insurance, subject to limits), and
• In some cases, interest on savings and similar income, within the framework of federal and cantonal rules.

These deductions are often granted as lump-sum or capped amounts, reflecting the policy of the canton and the federal legislator.

Family-Related Deductions and Allowances

Families benefit from a range of deductions and social allowances, for example:

• Child deductions for each dependent child,
• Deductions for dependants in need of support,
• In some cases, special allowances for single parents.

These deductions reduce taxable income and thus the overall tax burden for households with children or dependants. The exact amounts and conditions are set out in the Aargau tax law and can differ from the federal rules.

Childcare Costs

Under certain conditions, a portion of childcare expenses for children below a given age can be deducted, particularly where both parents are working or undergoing education or training. Typical conditions include:

• The childcare must be necessary to enable gainful activity or education,
• The expenses must be supported by invoices or contracts, and
• Only recognised forms of childcare may qualify (e.g. registered daycare, nurseries, after-school care).

Caps and detailed conditions depend on the tax year and cantonal implementation.

Education and Training Costs

Certain education and training expenses may be deductible if they are linked to the taxpayer’s current profession or further vocational development. This can include:

• Continuing professional education,
• Postgraduate courses and certifications,
• Specialised courses that enhance existing professional skills.

Initial education or training that qualifies an individual for a first profession is often treated differently or not deductible, in line with federal and cantonal practice.

Real Estate and Property-Related Deductions

Taxpayers who own real estate in Aargau must declare rental income or imputed rental value, but they may also benefit from property-related deductions, such as:

• Mortgage interest,
• Property maintenance costs, either actual or a lump-sum (subject to the applicable rules),
• Certain renovation expenses, where they are regarded as maintenance rather than value-enhancing investments.

The classification of property costs as immediately deductible or capital in nature can be nuanced and may require careful analysis.

Extraordinary Expenses and Medical Costs

Under specific conditions, extraordinary expenses can be deducted, particularly where they exceed a certain percentage of income and are unavoidable. This may include:

• High medical and dental costs not covered by insurance,
• Certain disability-related expenses,
• Support payments for persons in need in excess of normal living expenses.

The rules for what qualifies as extraordinary and the applicable thresholds can be strict; detailed documentation is usually required.

Cross-Border Situations and Double Tax Relief

Where taxpayers have income or assets abroad, or split their activities between Switzerland and other countries, deductions and relief mechanisms may apply in the context of:

• Double taxation agreements (DTAs),
• Unilateral relief provisions, and
• Allocation rules between cantons and countries.

These mechanisms may not be “deductions” in the narrow sense, but they can have a similar effect in reducing the income or tax subject to Aargau taxation.

Interaction Between Federal and Cantonal Deductions

Many deductions exist at both federal and cantonal level, but:

• The amounts or caps can differ between the two levels,
• Certain deductions may be available at one level but not the other, and
• The same underlying expense can have different tax effects for federal and cantonal purposes.

When preparing the tax return, it is therefore important to distinguish clearly between the federal and the Aargau cantonal/communal sections and to apply the correct rules to each.

Documentation and Evidence

In practice, the ability to claim deductions in Aargau depends not only on the legal rules but also on the availability of documentation. It is advisable to keep:

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

Having appropriate documentation ready reduces the risk of deductions being challenged or adjusted by the tax authorities.

Practical Considerations

The overall effect of deductions in Aargau depends on:

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

To understand your personal tax position, it is useful to view the deductions described on this page together with the sections on Rates, Filing Requirements, Special Rules and Examples in the Aargau income tax guide.