Zürich is one of the most expensive cities in the world, they say. And they are right!

You don’t have to be a Google engineer, well-paid manager or doctor, but it would certainly make things easier if you want to live in Zürich. 

Not only the world-class infrastructure of Zürich costs a lot of money, but the salaries of people there are also very high. Switzerland overall is in a bit of a salary bubble leading to everything remaining more expensive than in its neighboring countries.

What do you need money for?

The first important question towards computing your monthly cost of living is making a list of categories that you will spend money on.

This depends of course a bit on your situation, so for simplicity’s sake, in this article we will assume that you are a single, about 30 years old, no kids and are moving to Zürich from a different country like the US or UK. This means you will need a bit more time to get into the local culture and how to negotiate lower prices than a German or Austrian would who almost speaks the same language.

Also, all prices in this article are based on 2020 prices.

In the future there will be more articles about the situation for couples.

Where does all the money go?

Here is a somewhat arbitrary categorization that we will use for this article, once again targeting the average single expat with no kids:

1. Rent
2. Food
3. Mandatory insurances including health
4. Transportation
5. Sports
6. Telecommunication
7. Leisure, restaurants and entertainment
8. Vacation
9. Miscellaneous
10. Saving / cash buffer

Preliminary remarks about this estimation

The following calculation example will almost certainly not fit you perfectly. As stated above, there are a few assumptions about you being single and so on and of course it can vary a lot what one person spends on vacation or on going out. So consider this more as a framework to do your own math and the total number at the end as a ballpark figure. It should be a rough guidance if you are completely new to Switzerland and are just starting your research on the country and on living in Zürich in particular.

Rent

In Zürich you can easily spend around 1’500 CHF for a nice one-room apartment slightly outside the center. You can get down to around 1’000 CHF if you share a flat with someone or you can pay up to 2’500 CHF for just one person if you want more space or want to live right in the center, e.g. in Europaallee, which is next to the Zürich Central Station “HB”.

As you may expect, a typical Swiss person being conscious with their spendings would spend less rent because they would not care so much about living in the center or might just share a flat to save money. And of course they have more connections than you will have in the beginning, so they might end up paying a bit less.

So let’s assume you go with the decent, but not luxurious 1’500 CHF apartment. Feel free to redo the calculation later on with different values after you have done some research on what options you want to go with. 

Food

I am a fan of splitting up essential food spendings like on groceries, baked stuff and maybe the occasional sandwich from a super market near the train station vs. dining out with your partner or friends. The latter is clearly less essential than the first, typically in a different price class and if you use an app like Revolut, neon, Zak and so on it is relatively easy to categorize your spendings using this separation by business name.

Here again it depends a bit on whether you have special dietary needs like gluten intolerance, whether you buy more organic items or whether you literally “go the extra mile” and shop at Lidl and Aldi (two originally German discount supermarket chains) or the widespread Swiss incumbents Migros, Coop and a few others.

According to Blick, the price difference is in the ballpark of saving around 30-40% when shopping at Lidl/Aldi vs Coop/Migros. According to them, the difference is actually that Lidl/Aldi operates in cheaper locations that also tend to take more time to get there for you, the less nice display of the goods in the store which reduces cost of labor and of course the use of way more imported products at Lidl/Aldi which are sometimes drastically less expensive than locally sourced Swiss products. Further, the absolute basics like milk, butter or bananas (imported) tend to cost the same everywhere, while there can be a big price difference already for sweet potatoes imported from somewhere else (which you may find at Lidl/Aldi) vs. grown locally in Switzerland (typically at Coop/Migros).

Based on experience from some people, let us assume you will spend around 500 CHF per month on groceries and other essentials, which is around 115 CHF per week.

Mandatory insurances including health

Switzerland requires you to have roughly the same basic types of insurance coverage that its neighboring countries like Germany, Austria, France or Italy would. The system is more similar to Germany and Austria though and less to France or Italy.

The most basic thing is probably social security. It’s quite expensive like in most European countries and similar to other European countries, you don’t have much choice since it’s taken care of by your employer.

Since your employer takes care of it, we will not factor in social security insurance as a monthly cost - for now. At the very end, we will add social security again to your monthly total to calculate the minimum gross salary you will need to sustain your life.

Next up is health insurance. This is your own responsibility, but the prices for the obligatory health insurance are to a large part regulated by your local canton. You must get the obligatory (haha!) health insurance and for being “basic” the coverage is quite decent since most things except dental are covered inside Switzerland as well as emergencies within the EEA. You have a choice for your deductible though: If you rarely go to the doctor or if you are good at managing money, it pays off to get a high “franchise” of 2’500 CHF. It means you will pay the first 2’500 CHF in full and 10% of everything above, capped at a total of 3’200 CHF per year out of pocket. In return, you get a significant discount on your monthly premiums. So if only go see the doctor for a few recommended annual checkups, you will typically easily stay below 1’000 CHF of cost to pay out of pocket, while the annual discount on your premiums is way more than what you end up paying out of pocket, i.e. you save money.

You can also choose a lower “franchise” deductible, but it only pays off if you have serious conditions that require you to go the doctor very often and for more than a checkup. Or if you are terrible with money and can’t manage to have 3’200 CHF health cash reserve at any given time.

For our single with no kids around 30 years of age, the monthly premium in the typically recommended high franchise option will be around 320 CHF per month in 2020.

For 50-100 CHF per month more, you can add insurance for the rest of the world (e.g. vacations), special treatment in hospitals, dental care and so on. While a hospital add-on may make sense, dental rarely makes sense. It’s better to keep your teeth in good shape and get dental treatment in Germany, Austria or Hungary since it’s rarely an emergency and prices over there are much cheaper while traveling there is easy and common for dental procedures. As always, nothing ever comes for free, so the Swiss doctors and dentists tend to be less stressed and slightly more reliable than doctors in nearby countries, so if you want the absolute best treatment, you must pay the high Swiss prices.

Also considered as mandatory, while not legally required, in Switzerland is private liability insurance. So whether you pour coffee over a friends laptop or hit a famous Tennis player like Roger Federer with your car in an accident or you just accidentally set the house on fire, that’s what you have this insurance for. Because your landlord wants a counter-party with a lot of money (insurance company) in case you do flood the basement, you will need this insurance as if it were legally required. Together with an insurance against your damage to your household belongings from burglars, fire etc, you will end up with around 200-300 CHF per year or 17-25 CHF per month. 

So in total let’s assume you spend around 400 CHF per month for mandatory insurances.

Now as I wrote above, if you pick the high franchise health insurance, you need some cash to pay things out of pocket. So let’s assume you put away a further 100 CHF each month in a special piggy bank / virtual vault (Revolut, Zak, N26) for all sorts of insurance deductibles like the health insurance franchise or for other insurances.

So overall that would be around 500 CHF per month, not counting social security since it’s taken before your net salary payment.

Transportation

This category of your spending can vary a bit depending on whether you travel mostly locally or across Switzerland to discover the whole country and of course whether you want to save money by using public transportation or prefer the comfort and flexibility of your own car. 

The probably most basic option apart from paying as you go is getting a monthly pass from the ZVV (Zürich public transport association) and paying on a monthly basis. You can then cancel or extend it any time. A monthly non-transferrable transcription for just the city of Zürich will set you back 85 CHF. You can add more areas of the Greater Zürich Area at an additional cost. There is also an option to share it among people for 10 CHF more, so 95 CHF per month. The downside is that the sharable option is less convenient and you really have to share it often with a friend or partner to make the additional 10 CHF and effort worth it. With the non-transferrable option you also have the benefit that you can simply use the SwissPass, a free plastic card from SBB, as a ticket. Whenever they check whether you have a valid ticket you can simply show them your SwissPass card which contains the info that you have a valid ZVV subscription. Should you ever forget your SwissPass at home, they will give you only a very small admin fee fine if you come to their office with the SwissPass within a certain deadline vs. the full fine of 100 CHF that people regularly get when they have no valid ticket. With the transferrable option you lose these benefits.

As already mentioned, you can add additional zones within the ZVV area for a higher price. If you want the whole ZVV area on your subscription, you will currently pay 242 CHF per month. 

In each case, you can save money by buying an annual subscription instead of a monthly subscription straight away which can save you up to 24 percent. For example, the annual subscription for the whole ZVV will cost you 2226 CHF, approx. 186 CHF per month instead of 242 CHF.

Also, since you have the two-class system in public transport, you can buy access to the first class at an additional price with your subscription.

A more comprehensive option is to get a subscription not only for Zürich and its surroundings, but for all of Switzerland! SBB, the Swiss railroad company, has this amazing flatrate plan to use all public transportation in Switzerland and the tiny state of Liechtenstein as well as a few additional mountain funiculars. It is usually just called the GA which is short for Generalabonnement which roughly translates to flatrate in English (what a surprise). It is also sometimes called the GA Travelcard in English. Similar to the previously mentioned options, you can buy a monthly subscription with a minimum duration of 4 months. It can be cancelled at the end of each subscription month after the first 4 months. Or you can save a bit of money by committing to a full year.

A Generalabonnement in the second class will cost you either 340 CHF per month or 3’860 CHF per year (around 322 CHF per month, a saving of 5.5 percent).

To sweeten the deal even further, you get some additional partner discounts if you have a GA at car rental companies or when buying other passes like the Swiss museum pass, basically the same concept for museums (one flat fee for a large chunk of the Swiss museums).

To summarize, using public transportation you will end up spending between 85 and 340 CHF per month (in second class). So for the basic case, let us assume that you will end up spending 100 CHF per month, i.e. the 85 CHF and then a little bit more for traveling outside of the city of Zürich every now and then.

Sports

There are many things you can do in terms of sports, starting from almost free running outside where you might need to only buy new running shoes every year, up to going to the gym a couple of times a week, taking riding lessons or playing football with your friends. To make things simple, we are going to assume you are going to the gym to at least estimate the cost.

In the lower price segment, you can get a gym subscription for around 60 CHF per month, e.g. at Active Fitness. A higher quality offering would be the Migros Fitnesspark at around 1’200 CHF per year, i.e. 100 CHF per month. Other sports like horse back riding are of course substantially more expensive, while only going for outdoor running are probably less expensive. 

So let’s assume for the sake of our calculation that you are going to spend around 100 CHF per month on the sports category.

Telecommunication

Depending on where you are coming from, your phone bill will be lower or higher than what you are used to. You can get really decent landline internet plans based on fiber optics in Zürich around 40 CHF per month for a 60 Mbit symmetrical line and for 50 CHF per month you can get 200 MBit symmetric. The city of Zürich is really pushing this, so there is an overview website that gives you all the fiber plans in and around Zürich.

For another 35 CHF you can get a plan from Lebara (Sunrise network) with unlimited calls, SMS and data inside Switzerland at 4G speed, 3 GB of EU roaming and calls to the EU from Switzerland and while roaming included if you sign up during one of their promos (i.e. they don’t offer the plan all the time). Keep in mind that this is based on the offerings around the end of 2020, so a year later there will already be better offers or under different brand names.

So for 75 CHF per month you can already get really good landline + mobile plans. If you need less speed / data / roaming you can probably get down to 50 CHF per month in total although it’s probably not worth it to be too greedy to yourself here. The assumption here is of course that you bring your own phone or buy it separately, which in terms of money is generally a good idea. It is usually cheaper to buy the phone yourself than getting a more expensive plan with a subsidized phone. 

If you go with the big brands like Swisscom or Sunrise, they will happily sell you their more expensive plans with TV and a bunch of stuff you may or may not need for around 200 CHF per month. Since I believe that nobody needs TV anymore, I would not really recommend them, but it is of course your own free choice.

Leisure, restaurants and entertainment

You are in Zürich now, so let’s assume you go for dinner with someone once every week and maybe go see a movie once per month, just as an example. You might of course spend your money on something else. A decent, but not pricey dinner with drinks can cost you around 50 CHF for one person. Going to see a movie will set you back around 20 CHF.

So in total you could be spending around 300 CHF per month here. But it can of course be easily twice as much or more if you go clubbing every weekend (let’s see if this will even be possible after COVID) or eat out more often. 

Vacation

Since this is again very personal and quite different based on your personal desires, I am going to assume that per week of vacation you are going to spend on average 1’000 CHF per week. With about five weeks of vacation per year, that would amount to 5’000 CHF per year, i.e. approximately 420 CHF per month.

You should also add expenses for “vacation” near to your home in this category, for example if you do short trips on the weekend, especially if you stay in a hotel, eat out a lot or do other activities at relevant price levels.

Miscellaneous

This is a category where basically all other, typically smaller, expenses go. So for example, there might be a late fee every now and then when you don’t pay your bills on time, a parking time and so on.

I am just going to assume 100 CHF per month here, but feel free to adjust this upwards or downwards in your own calculation.

Saving / cash buffer

In total we are so far at about 3’595 CHF per month of living cost (keep in mind that your salary needs to be higher).

From the very beginning, you should start saving a bit of money. On the one hand, you definitely need a liquidity buffer for bad times. In Switzerland, similar to the US, you can often be fire quite quickly in the first year of your new job. It is common to see a notice period of only seven days for the first three months (probation period) and a notice period of one month within the first year. After this the notice period usually is three months, if you are lucky you get this benefit already after the probation period.

On the other hand, you need to save for buying a house or for an additional pension. The basic parts of the Swiss pension system (Pensionskasse and AHV) are probably not going to be very comfortable once you are old, similar to most pension systems in the developed world starting to fail these days. 

So my recommendation is that you put at least 20 percent of your other monthly spendings into a savings account. Since cash accounts don’t pay any interest these days and may not do so for many years to come, you should consider putting it into a stock-market-based savings plan (no investment advice).

In Switzerland, you can even get an additional tax benefit. The system is called Pillar 3a (Säule 3a) and basically the first 568 CHF (2020) per month (6’286 CHF per year in 2020) that you put into this special savings account is tax-free, i.e. you get all the taxes back that you paid on the amount of saving. It is later on taxed when you get it out of your savings account when buying a house or as a pensioner, but the taxation later on is drastically lower than what you would pay in taxes now. In another article, we are going to write more about how you can optimize your savings and taxes with the Säule 3a.

So: 3’595 x 20% = 719 CHF. That is how much you should additionally save each month. If you can, definitely save more.

It is generally recommended that you should have a cash liquidity buffer at any time of 3-6 months your monthly spendings. 6 x 3’595 CHF is roughly 21’600 CHF. So over time, you should have this amount on your bank account, preferably a separate virtual vault in apps like Zak, neon or Revolut to keep track of it. So if you can, save another 500 CHF per month just for building up this cash buffer.

The total sum

Depending on how you adjust the values from above, your total sum that you need after taxes + social security and before health insurance should be somewhere between 4’300 and 5’000 CHF per month. 

The income you need

The sum from above is just the actual money you will be spending each month. Since you also need to pay taxes and social security, you will need a higher gross income than that sum. Luckily, the taxes for that minimum spend is not too high. You will end up paying approximately 7 percent taxes and another roughly 7 percent of social security. What you don’t see is that your employer pays around another 7 percent of social security for you, so you end up paying around 21 percent to the government, of which 14 percent go away from your gross salary while you don’t see what your employer has to pay on top of the gross salary for you. It is worth mentioning that it is a pure coincidence here that it is three times 7 percent. If your gross income in Zürich is e.g. 10’000 CHF per month, you pay 4 percent more taxes on your whole income.

So in the end, if you spend 4’300 CHF per month, you will need at least a gross salary of around 5’000 CHF per month (60’000 CHF per year). If you spend around 5’000 CHF per month, you will need at least a gross salary of around 5’900 CHF per month (71’000 CHF per year).

The average Zürcher

Just to give you a comparison, the average person in Zürich earns about 8’000 CHF per month before taxes, social security and health insurance, so another 35 percent more than the upper value from above or a whole 60 percent more than the lower required salary we calculated. Don’t forget though that this is because Zürich has a lot of engineers working for Google, doctors, well-paid managers and so on. So if you don’t work in one of these fields (yet), don’t be disappointed that you won’t make quite those big bucks (yet).

Instead, be happy that you benefit from low taxes because the others are paying exponentially more than you, world class infrastructure and that it allows you to live in the (second) best city in the world!