Federal finances
An overview of the federal budget and the financial outlook for the years ahead.
Brief summary
The federal budgetary situation is strained. Following considerable deficits from 2020 to 2023, the Confederation almost broke even in 2024. This was achieved thanks to lower extraordinary expenditure and unexpectedly high tax receipts. Despite this temporary recovery, the financial room for manoeuvre remains limited. The outlook for the financial plan years from 2027 onwards, in particular, looks complicated if the Confederation does not take measures early on.
The reason for this is that expenditure is rising continuously and in some cases sharply, especially for the Armed Forces and social security. As receipts are not growing at the same pace, relief measures are needed to comply with the debt brake requirements. Cuts of CHF 2 billion were already necessary for the 2025 budget.
The situation will remain difficult in 2026. A balanced budget will be possible only thanks to extraordinary expenditure. Expenditure will rise significantly, due primarily to higher Armed Forces expenditure and the introduction of the 13th monthly AHV pension payment. Although receipts will also increase sharply, thanks in part to the new OECD minimum tax rate, there will still be an ordinary deficit of around CHF 600 million. The debt brake requirements will nevertheless be met. In structural terms, there will be a surplus of approximately CHF 100 million.
To stabilise the federal budget in the longer term, measures are planned from 2027 onwards in order to avoid structural deficits (relief package 27).
Who decides on federal expenditure?
In the middle of each year, the Federal Council prepares a draft budget for the year ahead. This includes all planned expenditure and receipts. This budget is subject to the debt brake, which means that the Confederation may not incur any new debt and must keep its expenditure and receipts balanced, although exceptions are possible. The Federal Council submits its proposal to Parliament. As Parliament has budgetary sovereignty, it has the final say on financing decisions. During the winter session, Parliament discusses the budget with integrated task and financial plan (ITFP), which contains the outlook for the budget year and the subsequent three years.
What are federal receipts derived from?
In 2024, the Confederation generated ordinary receipts of CHF 84.2 billion. Direct federal tax is the most important source of receipts, approximately half of which is paid by natural persons (private individuals) and half by legal entities (companies). The second-largest source of receipts is VAT, which is levied on services and goods sold. Further key sources of receipts include other consumption taxes, such as mineral oil tax and tobacco duty, and withholding tax, which is levied mainly on dividends and interest.
More information on federal receipts
What are the Confederation's main expenditure items?
The Confederation had ordinary expenditure of CHF 83.1 billion in 2024. Social welfare was the largest task area, followed by finances and taxes (including the cantons' shares of direct federal tax) and transportation. Extraordinary expenditure of CHF 1.4 billion was incurred for people from Ukraine seeking protection (global lump sums for the cantons). Total federal expenditure, i.e. ordinary and extraordinary expenditure combined, amounted to CHF 84.3 billion in 2024.
More information on federal expenditure
Where does my tax money go?
In Switzerland, taxes are levied by the federal government, the cantons and the communes. Swiss federalism also characterises the country's tax system. All of the 26 cantons have their own tax laws and levy very different taxes on income, assets, inheritance and other tax items. At federal level, taxes are generally not earmarked, i.e. they go to the general federal coffers to finance all subsidies, infrastructures and services that are essential for the smooth functioning of the community, such as social welfare, health and security.
Exceptions include restricted receipts, such as the percentage of VAT to finance AHV, and much of the mineral oil tax and transportation levies (heavy vehicle charge, automobile duty, motorway tax sticker), which go to the motorway and urban transportation fund.
Why is the Confederation's financial situation strained?
In the absence of countermeasures, the Confederation expects structural deficits of up to CHF 3 billion in the financial plan years 2027 and 2028. This is due to expenditure growing much faster than receipts. In particular, expenditure on retirement provision and the Armed Forces is rising sharply. Without countermeasures, the constitutional debt brake requirements can no longer be met.
What is the Federal Council doing to balance the federal budget in the long term?
The Federal Council wishes to prevent impending structural deficits, comply with the debt brake and bring the federal budget into balance in the medium term. To achieve this, it put together relief package 27 and carried out a consultation on the proposals. The measures are intended to ease the burden on the federal budget by just under CHF 2.4 billion in 2027 and slightly under CHF 3 billion in 2028. The legislative dispatch is currently being drafted and is expected to be adopted for the attention of Parliament in September 2025. Even after the relief package has been fully implemented, large deficits are anticipated from 2029 onwards – partly due to the expenditure growth concerning the Armed Forces.
Dossiers of the relevant office
Index
Press releases on the topic
Second 2025 extrapolation confirms financing deficit
The Federal Council took note of the current end-September extrapolation on 29 October 2025. The Confederation is reckoning on a financing deficit of CHF 0.6 billion for this year. The expected deficit is thus likely to be CHF 0.4 billion higher than forecast in the June extrapolation. However, the deficit is smaller than originally budgeted.
2026 budget with integrated task and financial plan for 2027 to 2029 available
Effective immediately, the 2026 budget is available in electronic format on the website of the Federal Finance Administration (FFA). The hard copy will be released in mid-September.
First extrapolation for 2025: financing deficit of CHF 200 million
The Federal Council was informed about the current extrapolation on August 13, 2025. According to this first extrapolation, the Confederation is anticipating a financing deficit of CHF 200 million for this year. A deficit of CHF 800 million had been budgeted. The improvement can be explained primarily by much higher tax receipts.
Federal Finance Administration FFA
Switzerland - 3003 Bern