Social Security for the Self-Employed: A Complete Overview

As a self-employed person you are responsible for your own social security contributions — AHV, IV and EO — with no employer to split them with.

The contributions

You pay AHV/IV/EO contributions on your net income through your compensation fund. These are the old-age, disability and income-compensation schemes that form the first pillar.

The three are collected together as a single contribution calculated on your net income. You pay the full amount yourself, with no employer share.

AHV covers old-age and survivors’ pensions, IV covers disability, and EO covers income compensation for events like maternity or military service.

The compensation fund bills you based on your assessed income, with periodic payments and a final adjustment when your actual figures are known.

• AHV (old-age and survivors).
• IV (disability).
• EO (income compensation, e.g. maternity).

What is optional

The second pillar (occupational pension) is optional for most self-employed people but highly recommended for retirement. The third pillar (3a) is voluntary and tax-advantaged.

Employees get a second pillar through their employer, but the self-employed must arrange their own. Joining a pension foundation is possible and often wise.

The third pillar (3a) is a private, tax-deductible savings account available to everyone. For the self-employed it is a key retirement tool.

The first pillar alone rarely provides a comfortable retirement. Combining pillars one, two and three is how the self-employed build a secure pension.

Build your own safety net

Start early, even with small amounts. Compounding does the heavy lifting over a working life, and the self-employed have no employer matching to lean on.

Treat your contributions as a fixed cost of doing business, set aside automatically from each invoice, rather than an afterthought at year-end.

Review your pension situation every few years. As income grows, so should the share you direct toward retirement.

Who to pay and how

Your first pillar contributions are handled by your cantonal compensation fund, the same body that assessed your self-employed status at the start.

For the second pillar you can join a pension foundation or a vested benefits institution, often through an association for your profession.

The third pillar (3a) is opened with a bank or insurance company and funded directly by you. Contributions are capped by law each year.

Keep records of every contribution. They are your proof of entitlement and, for pillar 3a, the basis of your tax deduction.