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How much do you need to earn in Switzerland to be considered wealthy?

Switzerland is a wealthy country but how much do people need to earn to be considered rich in the country?

How much do you need to earn in Switzerland to be considered wealthy?
1000 Swiss francs note, which was introduced in 2019. Photo by Michele LIMINA / AFP

In Switzerland, the amount of money one needs to make to be considered rich is different for every location.

The Institute for Swiss Economic Policy’s “Swiss Inequality Database” has calculated this number for each Swiss canton.

What exactly does it mean to be rich, and just how much money do you have to earn to be considered among Switzerland’s wealthiest breadwinners? While the desire for wealth and abundance is – to a degree – universal, its definition varies from place to place. This is particularly the case in a country as well off as Switzerland. Yet, there is clear data that shows when an individual is considered to be among the top earners for every canton.

Swiss national average

Households with an annual income of over CHF 97.591 (before taxes) belong to the wealthiest 20 percent in the country, however, it takes an impressive net salary of more than CHF 1.2 million to be among the country’s richest 0.1 percent. In contrast, after taxes, the latter will be left with around CHF 762,866 in their pockets.

French-speaking Switzerland

As with most things in Switzerland, just what income (before tax) makes one rich can vary significantly from canton to canton.

If you’re hoping to be among Romandy’s top earners, you’ll have the most challenging time accumulating wealth in Geneva where a staggering CHF 2.1 million is required to be considered among the canton’s 0.1 per cent uber rich. If you’re shooting for less, say the canton’s top 20 percent, you’ll only need to be earning a “modest” CHF 102,873 and to position yourself somewhere in the middle, at 5 percent, your salary would have to hit CHF 213,761.

Similarly, in Vaud, an income of around CHF 1,2 million will propel you among the 0.1 percent super rich, while a lesser CHF 192,842 and CHF 101,170, will mean you’re in canton’s top 5 and 20 percent earners.

Becoming rich is slightly more attainable in neighbouring Fribourg, and Neuchâtel where incomes of CHF 95,526, and CHF 86,805, respectively, place you within the top 20 percent of earners, and incomes of CHF 158,006 and 148,677 in the top 5 percent. In order to be considered among the cantons’ 0.1 percent, you’ll need an income of CHF 745,507 in Fribourg and CHF 930,015 in Neuchâtel.

Deutschschweiz

Leading the chart in German-speaking Switzerland is Zug where an income (before tax) of CHF 3,7 million will put you in the 0.1 percent of earners. In comparison, Zurich’s super rich average CHF 1,4 million per year. The gap is equally wide when it comes to the top 5 and 20 percent of the cantons’ wealthiest, with Zug’s averages standing at CHF 310,584 and CHF 133,048, while Zurich averages at CHF 205,822 and CHF 109,585.

In Basel-Country and Basel City, you will need to bring home CHF 106,284 and CHF 98,784 to be among the top 20 percent, while the top 0.1 percent make around CHF 1.1 million and 1.8 million. The two Basels highest 5 percent earners bag around CHF 185,288 (Country) and CHF 194,727 (City).

Things look a little brighter in Bern and Aargau with the former’s 0.1 percent income standing at a lesser CHF 730,312. Bern’s chief 5 percent earn CHF 144,412 and its 20 per cent average at CHF 89,150.

The situation is similar in Aargau with its richest earners bringing in some CHF 730,312. The top 20 percent of Aargauers have a salary of around CHF 707,342, with the 5 percent bringing home around CHF 165,682.

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ECONOMY

How Switzerland’s interest rate hike might affect you

The Swiss National Bank (SNB) raised its key rate on Thursday, not ruling out further increases “to ensure price stability in the medium term". What effect could this have on consumers?

How Switzerland's interest rate hike might affect you

“The SNB is tightening its monetary policy further and is raising policy rate by 0.5 percentage points to 1.5 percent,” the central bank said in a press release on Thursday.

In doing so, the SNB “is countering the renewed increase in inflationary pressure,” the bank added.

The rate change will go into effect from Friday, March 24th, 2023.

With this latest hike, the SNB’s key interest rate goes up for the fourth time in a row, suggesting that the fight against inflation is currently outweighing financial market concerns with the emergency takeover of Credit Suisse by UBS.

“Inflation has risen again since the beginning of the year, and stood at 3.4 percent in February. It is therefore still clearly above the range the SNB equates with price stability,” the bank said.  

It added that Switzerland is not the only country where key rates are increased.

“The global economy hardly grew in the fourth quarter, while in many countries inflation remained clearly above central banks’ targets. Against this background, numerous central banks have tightened their monetary policy further,” the SNB pointed out.

Also, the forecast calls for “further inflationary pressure from abroad.”

“Growth prospects for the global economy over the coming quarters remain weak. At the same time, inflation is expected to remain elevated globally for the time being,” the bank added.

The SNB has also raised its inflation projections for Switzerland for the current year, as well as for 2024, to 2.6 percent and 2.0 percent, respectively.

In September 2022, its outlook called for 2.4 percent for 2023 and 1.7 percent for 2024. 

“The inflation is likely to remain at the very top of the range considered acceptable for monetary stability in 2025 as well,” the bank said.

However, by international comparison, the SNB’s key interest rate remains relatively low.

The European Central Bank recently raised its rates to between 3 and 3.75 percent. The Fed, the US central bank, upped rates to between 4.75 and 5 percent.

What does this hike in interest rates mean for you?

It depends on what, if anything at all, you are looking to buy.

If you are planning to get big-ticket items that are usually purchased with credit — like homes — then you may have to dig deeper into your pockets.

If you already have a fixed-rate mortgage, then you are safe from rate increases for its term.

If not, rates could go up, though it is not clear by how much.

But it is not all bad news; higher interest rates will yield some benefits as well.

For instance, if you have certain types of investments — such as bonds and other fixed-income financial products — you may see more money coming in.

And if you have a bank account, you can expect to see a higher yield on your assets, though the actual increase depends on several factors, such as what bank you use and what kind of accounts you have there. 

READ MORE: Which Swiss banks offer the highest interest rates on savings?

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