Entrepreneurs can use the payments they pay into their pension fund and Pillar 3 to optimize their tax. Here are some guidelines.
Pension fund: Business owners can also deduct the amount they pay to the pension fund as a company expense. The portion deducted from the salary of employees must be debited from the private account of the owner. It is also important for the calculation of the Old-Age pension and Survivors’ Insurance (OASI), which is based on gross income, before deducting the contributions for the second pillar.
If significant profits accrue, it is advisable to set up employers’ contribution reserves. These are payments to the occupational pension fund (called premium reserves), which impact profits and therefore the tax burden. They also serve to build up reserves for more difficult periods.
Pillar 3: Related pension contributions (Pillar 3a) of self-employed persons are also considered as an individual charge.
If the company owner is not affiliated with a pension fund, up to 20% of his/her salary liable for OASI can be paid into Pillar 3a, and this amount is subject to a tax break. The maximum amount is capped at CHF 35,280 (status 2024). If he/she is a member of the company’s pension fund, he/she may pay up to CHF 7,056 in the same way as employees (status 2024).
