All residents or domiciled individuals are subject to income tax on worldwide income, with the exception of income from real estate located abroad and income from either a fixed place of business or a permanent establishment located abroad. The income tax system in Liechtenstein is progressive, with employees paying a higher percentage at higher income levels. This national tax, state tax rates range from 0% to 8%, with municipal tax increasing the total effective rate, is very low relative to most countries, but there is also a communal tax which makes the actual total tax liability between 2.5% and 22.4%.

Employers deduct 4.7% from their employees’ wages for social security and pay 4.9% employer’s contributions to the administration.

Either party to an employment contract can give notice at any time with or without reason, provided that the statutory or contractually agreed period of notice is observed. However, during certain periods the employee is protected from dismissal (so called “restricted periods”). The employer must ensure that dismissal cannot be regarded as abusive. There is generally no need to give reasons for the termination of an employment contract. Employees have the right to demand written reasons for termination and the employer is obliged to state these.
At the end of the probationary period, the statutory notice periods are one month in the first year of service, two months in the second and up to and including the ninth year of service and three months thereafter.
The parties may freely determine the duration of the period of notice in writing, whereby the period of notice may not be shorter than one month.
Employees in Liechtenstein are usually entitled to a notice period prior to termination from employment. The mandatory notice period varies from one month to three months, depending on the length of service.