Self-employed in Switzerland: how your AHV/AVS contributions are calculated
Working for yourself in Switzerland? Your contributions are based on your self-employed income: first as advance payments, then settled exactly once your tax assessment is known.
As an employee, contributions come off every payslip. Once you are self-employed, you pay them yourself, directly to your compensation office (caisse de compensation). They cover old-age and survivors’ insurance (AVS, known as AHV in German), invalidity insurance (AI) and loss-of-earnings compensation (APG). The calculation happens in two stages.
Which income are the contributions based on?
On the income you actually earned during the contribution year, that is, your business profit. The compensation office takes this figure from your tax assessment (taxation fiscale).
Two adjustments are then made:
- the personal AVS contributions you deducted in your tax return are added back to your income;
- interest on the equity invested in your business is deducted, at a rate that changes from year to year.
Why pay advance contributions during the year?
Because the tax assessment arrives long after the year has ended. In the meantime, the compensation office sets advance contributions (acomptes) based on the income you expect for the current year. They are invoiced every quarter and are due within ten days of the end of the quarter.
If your income changes significantly, up or down, you let the compensation office know and it adjusts your advance payments. This matters most when starting out, when income is only an estimate.
What happens once your tax assessment is final?
The compensation office receives the income set by the tax authorities and issues a final statement (décompte définitif). If your advance payments were too high, it refunds the difference. If they were too low, it invoices the balance, payable within 30 days.
Where the advance payments cover less than 75% of the final contributions, late-payment interest is added. Hence the value of declaring a realistic income from the start.
Is the rate the same for everyone?
No. Above a certain income, a fixed rate applies. Below it, a sliding scale (barème dégressif) is used: the lower your income, the lower the rate, down to a minimum contribution. These thresholds are adjusted regularly.
If your self-employed work is a small side activity, contributions are only collected if you ask for them. Finally, the invoice also includes the compensation office’s administrative costs and a contribution towards family allowances.
How we can help
We work out with you the income to declare to the compensation office, check the final statement when it arrives, and keep your accounts so that your profit, your taxes and your contributions all match.
Questions about your contributions? Call us, and we can arrange a meeting if needed.
+41 26 303 36 69