TAX
BENEFITS
TAX
BENEFITS
TAX
BENEFITS
TAX
BENEFITS
Third pillar tax benefits
For each Franc you pay into your pillar 2 savings plan, your employer pays at least 1 Franc. This Franc is offered to you, tax free. The employers additional Franc makes the pillar 2 pension scheme viable.
Without this additional Franc the Swiss pension system would quite simply not work. Alone an individual could not afford to contribute sufficient capital to his or her pillar 2 pension scheme to finance a decent retirement.
The principle is the same for the pillar 3 savings scheme, but it is the State that contributes part of the additional Franc, not the employer.
For each Franc you pay into your pillar 3 pension plan, the State contributes, on average, 33 cents. With a contribution of CHF 500.- per month, these 33 cents represent, depending on your income, a tax benefit of roughly CHF 2’000.- per year; or CHF 800.- per year for a contribution of CHF 200.- per month. Indeed, the numbers add up fast, very fast!
Use the calculator to calculate:
The results are provided for a single person of catholic religion, living in the Canton of Geneva. If you live in another Canton, are not catholic, are a couple and/or have children contact us for a precise calculation.
| Your annual taxble income | 0 |
|---|---|
| Your monthly savings | 0 |
| Your annual tax savings | 0 |
| Your return on investment generated by the tax savings | 0 |
| The number of months per year that the State indirectly funds your savings plan | 0 |
*1 Your taxable income is your gross salary less your social charges and other authorized tax deductions
Let’s use the example of a person who lives in Geneva to help interpret your results:
A single person, without children, with a taxable income of CHF 70’000.- WITHOUT a pillar 3 savings plan, will pay roughly CHF 14’500.- of taxes per year.
This same person WITH a pillar 3 savings plan of CHF 500.- per month, will pay around CHF 12’500 of taxes per year.
The result can be interpreted in many ways, but the conclusion is always the same, it is VERY advantageous to fund a pillar 3 savings plan in Switzerland.
In Geneva, if I fund a CHF 6’000.- savings plan, I will save CHF 2’000.- of taxes annually. The saving on my tax bill represents a third of my investment, or a return of 33%.
An alternative way of interpreting the tax benefit is to divide the amount saved in taxes (CHF 2000.-) by the monthly investment (CHF 500.-). The total is 4. The State indirectly funds my pillar 3 savings plan 4 months per year.
Request your personal financial security assessment **
** The assessment is free and gives you an overview of your first, second and third pillar benefits in the event of retirement and loss of income in the event of illness or accident. It also gives you the amounts that are available if you wish to become a homeowner, start your own business or if you are going to leave Switzerland.