How RSUs Are Taxed in Switzerland: A Practical Guide for Employees

More and more companies in Switzerland rely on employee equity. So-called Restricted Stock Units, RSUs for short, are particularly common. You see them above all at tech companies, international groups and fast-growing start-ups. RSUs can be a valuable part of your compensation. At the same time, they often cause uncertainty: When are RSUs taxed in Switzerland? Why do they appear on the wage statement? What happens with withholding tax? And why can a high tax bill arise even though no cash was paid out? This guide explains, in plain terms, how RSUs are treated for tax purposes in Switzerland and what you should pay particular attention to. The basis is Circular No. 37 of the Federal Tax Administration on the taxation of employee equity. If you want to see how an RSU vesting affects your overall tax burden, our Swiss tax calculator gives you a first picture.

What are Restricted Stock Units?

Under Swiss tax law, RSUs are neither classic shares nor options. They qualify as expectancies to employee shares. Put simply: your employer promises you today that you will receive a certain number of shares in the future. As a rule, you pay nothing for them at grant. But the shares do not belong to you straight away. You first have to meet certain conditions. Only then do the RSUs convert into actual shares and are credited to your custody account.

What conditions apply to RSUs?

The most important condition is usually the so-called vesting period. This means you have to stay with the company for a certain time. Often this is one, two, three or four years. If you resign earlier or leave the company before the deadline expires, the RSUs that have not yet vested generally lapse without compensation. Depending on the plan, performance targets may apply in addition. Then it is not enough to simply stay with the company. Vesting can also depend on whether certain company, market or individual goals are achieved. Important: the exact rules are always set out in the RSU plan, the grant letter or the employer's equity regulations.

The three life phases of an RSU

To understand how RSUs are taxed, you need to distinguish three points in time.

1. Grant: the allocation

At grant, your employer tells you that you will receive RSUs.

As a rule, nothing happens for tax purposes at this point. You only have a future right to shares. The shares are not yours yet and you cannot freely dispose of them.

Even so, the grant matters. It marks the starting point for the later tax assessment — especially in cross-border cases or when you change your place of residence or work during the vesting period.

2. Vesting: the release

At vesting, the conditions are met. The RSUs convert into actual shares and are credited to your custody account.

This is the central tax moment.

The value of the shares at vesting, or upon the conversion into shares, generally counts as taxable earned income in Switzerland. This amount is treated like salary. It is therefore subject to income tax and, as a rule, also to social security contributions.

The taxable amount usually appears on the wage statement under item 5 as participation rights per supplementary sheet.

3. Selling the shares

After vesting you hold actual shares in your custody account. Depending on the plan, you can often sell these shares immediately. In certain cases, however, contractual blocking periods or internal trading restrictions may apply.

For private individuals, a later sale of shares held in private assets is generally tax-free in Switzerland. This means: if the share price rises after vesting and you later sell the shares at a profit, that capital gain is usually not taxable as income.

With employee shares, however, there are special cases. Particularly with non-listed shares, a switch from formula value to market value, or a change in the valuation method, part of the added value may qualify as income for tax purposes.

Regardless of any sale, dividends remain taxable income. In addition, after vesting the shares must be declared in the securities and assets statement. For wealth tax, the value as of 31 December is generally decisive.

When are RSUs taxed in Switzerland?

As a rule, RSUs are taxed not at grant but at the time of conversion into employee shares. In practice, this point in time often coincides with vesting, that is, the delivery of the shares. The taxable amount corresponds to the market value of the shares at the time the legal entitlement is acquired, less any purchase price. Since employees often receive RSUs for free, the full market value at vesting is usually taxable. Example: you receive 100 RSUs. At vesting the share price is CHF 80. You pay nothing for the shares. Then your taxable income from RSUs is: 100 × CHF 80 = CHF 8'000. These CHF 8'000 are added to your other salary.

How is the taxable value determined?

The taxable value depends on whether the shares are listed or not.

Listed shares

For listed companies, the valuation is usually relatively simple. The market value is in principle the stock-exchange price at the time the legal entitlement is acquired. For RSUs, this is in practice usually the moment the RSUs vest and the shares are credited to your custody account. If the shares are listed in a foreign currency, for example in USD, the value has to be converted into Swiss francs. A tax-recognised exchange rate is used for this.

The 60-day rule

Some employee equity plans have an acquisition period. This means employees receive an offer and have to accept it within a certain deadline. Then special valuation rules apply: with an acquisition period of more than 60 calendar days, the closing price on the day of acceptance is generally decisive. With an acquisition period of up to 60 calendar days, the closing price on the first day of the acquisition period may be decisive. Important: with classic RSUs there is often no active acceptance of a share acquisition in the narrower sense. Many RSUs convert automatically into shares at vesting. In such cases, the vesting or delivery date is usually decisive in practice.

Non-listed shares and start-ups

With private companies and start-ups, the valuation is considerably more demanding. There is no daily stock-exchange price. Therefore a clear market value is often missing. In such cases, a formula value is frequently used. This is calculated according to a recognised valuation method. In Switzerland, the so-called practitioner method or a comparable method is often used for this. This can be problematic for employees. Because even if the shares cannot be sold, taxable income can arise at vesting. This is often referred to as dry income. It means you have to pay tax on a theoretical value even though you have received no cash and may not be able to sell the shares at all. With start-ups in particular, this is an important point. An equity stake can be valuable on paper but remain practically illiquid until a sale, a buy-back programme or an IPO takes place.

Practical example: RSUs on the wage statement

Let's look at a typical example. An employee receives several RSU tranches. These vest in 2025. The shares are listed and valued in USD. For Swiss tax purposes, the value is converted into CHF.

Sample supplementary sheet for employee equity

Example – fictitious figures.

The figures are rounded and fictitious. In the actual settlement, slight deviations can arise if the employer calculates with more decimal places.

What does pro-rata mean?

This refers to the supplementary sheet to the wage statement for employee equity – the breakdown that lists your individual RSU tranches with vesting date, price and taxable value (like the worked example above). This supplementary sheet often contains an additional column with a pro-rata share. This share shows which part of the RSU benefit is taxable in Switzerland. If you worked in Switzerland during the entire time between grant and vesting and Switzerland had the right of taxation, the pro-rata share is usually 100%. Then the full value is taxable in Switzerland. But if you worked in several countries during the vesting period, an allocation may be necessary. Example: you receive RSUs during your time in London. After two years you move to Switzerland. Part of the RSUs vests later, while you live and work in Switzerland. Then it has to be examined which part of the vesting period falls on Switzerland and which part on abroad. Working days, residence, double taxation agreements and the specific secondment situation all play a role here. Pro-rata is therefore particularly important for expats, international employees and people who relocate.

In international cases, the pro-rata share has to be examined carefully. The decisive factor is, in principle, the ratio of the working days attributable to Switzerland within the vesting period to the entire vesting period. Holidays, weekends, public holidays and similar absences are not deducted separately.

Important: in certain inbound cases, the full monetary benefit can appear on the Swiss wage statement. The portion attributable to abroad is then only allocated out in the tax return as the portion taxable abroad.

Conversely, when leaving Switzerland: if you earn RSUs in Switzerland but move abroad before vesting, the portion attributable to Switzerland may remain taxable here. The Federal Tax Administration (ESTV) provides for withholding tax on the Swiss portion in such cases.

Entry on the Swiss wage statement

The taxable RSU value normally appears on the Swiss wage statement under item 5 (equity rights per supplementary sheet). The amount is added to the rest of the salary. As a result, your gross salary rises significantly in that year.

Item	Description	Amount (CHF)
1	Salary	135'000
2.3	Other (car allowance)	9'600
3	Irregular benefits (commissions)	40'000
5	Equity rights per supplementary sheet	175'160
8	Total gross salary	359'760
9	AHV/IV/EO/ALV/NBUV	20'600
10.1	Occupational pension	10'500
11	Net salary	328'660
12	Withholding tax deduction	58'500

This can have an impact on:

• income tax;
• withholding tax;
• social security contributions;
• tax-rate progression;
• subsequent ordinary assessment;
• wealth tax in the following year or as of 31 December.

The supplementary sheet is therefore very important. It shows the tax office which tranches the amount is made up of.

Withholding tax and RSUs

The tax handling depends heavily on whether you are subject to withholding tax or assessed under the ordinary procedure. For how tax at source and filing a tax return differ in general, see our guide to tax at source vs. filing a tax return for expats.

Scenario A: you are subject to withholding tax

This applies, for example, to many expats with a B permit. If you are subject to withholding tax, the tax is generally deducted directly via the payroll. This also applies to monetary benefits from RSUs. In the months in which RSUs vest, your salary can therefore fluctuate significantly. The employer has to account for withholding tax and social security contributions on the RSU value. Since you receive shares and not cash at vesting, a solution is needed for the tax payment. Many employers or plan providers use a so-called sell-to-cover procedure for this. Here, part of the newly received shares is sold directly. The proceeds are used to cover withholding tax and social security contributions. Only the remaining shares are credited to your custody account. Important: sell-to-cover is not regulated the same way at every employer. It depends on the RSU plan, the broker, the employer and the tax status.

B permit and income over CHF 120'000

A common mistake is the assumption that from CHF 120'000 income you are automatically no longer subject to withholding tax. That is not correct. Anyone who is subject to withholding tax with a B permit and earns a gross income of at least CHF 120'000 per year remains, in principle, subject to withholding tax. In addition, however, a subsequent ordinary assessment is carried out. This means: during the year, withholding tax is deducted. After year-end you have to file a complete tax return. The withholding tax already paid is credited against the final tax bill. RSUs can cause the CHF 120'000 threshold to be exceeded or the tax burden in the ordinary assessment to turn out significantly higher. We explain exactly how this transition works in our guide to the tax return with a B permit.

Scenario B: you are assessed under the ordinary procedure and not subject to withholding tax

If you are a Swiss citizen, hold a C permit or are for some other reason not subject to withholding tax, no ongoing withholding tax is deducted from your salary. The RSU value is nonetheless reported on the wage statement and recorded as income in your tax return. This can lead to a high tax bill. Example: your normal annual salary is CHF 140'000. In addition, RSUs worth CHF 190'000 vest. Your taxable income rises sharply as a result. But the tax bill often comes only months later. If you have kept all the shares and have not planned for liquidity, this can become uncomfortable. It therefore makes sense to deliberately build up cash reserves at vesting or to sell part of the shares.

Watch out: dry income and liquidity risk

RSUs can be demanding from a tax perspective because you generate taxable income at vesting but do not necessarily receive cash. With listed shares, this problem can usually be solved by selling part of the shares. With non-listed companies it is more difficult. There it can happen that you have to pay tax on a value even though you cannot sell the shares at all. This is one of the biggest risks with employee equity in start-ups.

When is there a tax discount?

Sometimes shares are not freely sellable after vesting. The employer can provide for a contractual blocking period. This means: the shares belong to you, but you may not sell them for a certain time. Because such shares are less flexible, Swiss tax practice grants a discount on the taxable market value. This discount is often called "Einschlag". The discount amounts to 6% per blocking year in economic terms and is capped at a maximum of 10 years.

Important: the discount is not a direct rebate on the tax bill. It reduces the taxable value of the shares. Example: you receive shares worth CHF 100'000. The shares are blocked for four years. The discount is 20.791%. Then not CHF 100'000 is taxed, but only CHF 79'209.

When does no discount apply?

Not every restriction leads to a tax discount. No discount normally arises with ordinary blackout periods or internal trading windows. Such restrictions often concern only certain trading periods and are not the same as a genuine contractual blocking period. A tax discount presupposes that the shares are actually contractually blocked after the legal entitlement is acquired and that you cannot freely sell them during this blocking period. That is why it is worth taking a close look at the RSU regulations and the supplementary sheet to the wage statement.

What happens with dividends?

After vesting you are a shareholder. If the shares pay out dividends, these dividends are generally taxable income in Switzerland. This is independent of whether you have sold the shares or not. With foreign shares, foreign withholding taxes can also play a role. Depending on the country and the double taxation agreement, a reclaim or credit may be possible.

Don't forget wealth tax

After vesting, the shares are part of your assets. You have to declare them in the tax return in the securities schedule. The decisive value is usually the value as of 31 December. Even if a later capital gain is often tax-free for private individuals, this does not mean that the shares are irrelevant for tax purposes. They can increase your wealth tax, and dividends remain subject to income tax.

Important: employee equity must, in principle, be declared in the securities and assets statement. This applies in particular even when income taxation is not yet relevant, for example with RSUs that have not yet vested or other expectancies. After vesting, the shares actually received must additionally be declared at their value as of 31 December.

In practice, RSUs that have not yet vested and other forms of employee equity are often listed on a "pro memoria" basis, i.e. without a taxable asset value. The Canton of Zurich explicitly handles it this way.

Common mistakes with RSUs

Many employees underestimate the tax consequences of RSUs. These mistakes are particularly common:

1. RSUs are confused with tax-free capital gains. The later sale can be tax-free. But the vesting itself is earned income and taxable.
2. No liquidity for the tax bill. Anyone who keeps all the shares may later be forced to sell shares at an unfavourable time.
3. Withholding tax and subsequent ordinary assessment are confused. A B permit with income over CHF 120'000 does not mean that no withholding tax is deducted anymore. Usually withholding tax is deducted and later corrected via the ordinary assessment.
4. Pro-rata is ignored. In international cases, only part of the RSU benefit may be taxable in Switzerland. Without a clean allocation, double taxation or an incorrect declaration looms.
5. The supplementary sheet is not checked. It contains vesting dates, prices, exchange rates, number of shares, pro-rata share and any blocking periods.
6. Blocking periods are not taken into account. If genuine blocking periods exist, a tax discount may be possible. This should be shown correctly on the supplementary sheet.

What should you specifically check?

If you receive RSUs, you should check the following points every year:

• Did RSUs vest in the tax year?
• Is the taxable amount correctly recorded on the wage statement?
• Does the supplementary sheet match the vesting dates?
• Were the correct share prices used?
• Was the correct exchange rate applied?
• Is the pro-rata share correct?
• Is there a genuine blocking period?
• Was any discount taken into account?
• Was withholding tax deducted correctly?
• Is there an obligation to a subsequent ordinary assessment?
• Are the shares declared in the securities schedule as of 31 December?
• Were dividends recorded correctly?

Conclusion

RSUs are a popular form of employee equity. But they can be complex from a tax perspective. The most important point is: RSUs are generally taxed at vesting in Switzerland. The value of the shares received counts as earned income and appears on the wage statement. A later sale of the shares is often tax-free for private individuals. Nonetheless, dividends, wealth tax, blocking periods, withholding tax and international pro-rata allocations have to be checked carefully. You should be especially careful if you are subject to withholding tax, hold a B permit, have relocated internationally or receive RSUs from a non-listed company. A clean review of the wage statement and the RSU supplementary sheet helps you avoid mistakes on the wage statement and later queries from the tax office — and makes sure you don't pay more than you owe. For larger RSU amounts or international setups, working with an independent financial advisor who looks at taxes, pensions and investments together pays off.

Note

This article offers a general overview of the taxation of RSUs in Switzerland. The specific tax treatment depends on the equity plan, your place of residence, your place of work, your residence status, any double taxation agreements and cantonal practice. For larger RSU amounts, international cases or non-listed equity, an individual review is worthwhile.