You Are Your Own Safety Net. Build it with the 3rd Pillar.
For self-employed expats, the 3rd pillar isn't just a pension plan—it's your replacement for a corporate safety net. This guide shows you how to build a plan that protects your income, your family, and your future.
Quick Summary
For self-employed professionals, the 3rd pillar is not optional—it is your only tax-advantaged safety net. The 'Big 3a' allows for massive tax deductions (up to CHF 36,288) while replacing the missing disability and death benefits of a corporate pension.
Key Points:
- • Massive Limits: Contribute 20% of net income up to CHF 36,288/year—5x the employee limit.
- • No Safety Net: You have no 2nd pillar. An insurance 3a is critical to replace lost disability/death benefits.
- • Tax Efficiency: Every franc contributed is 100% tax deductible, offering immediate ROI.
- • Flexibility: Use 'Big 3a' for core protection and surplus cash for growth, or structure it to handle variable income.
The 'Big 3a': Your Greatest Opportunity and Biggest Responsibility
As a freelancer or entrepreneur without a pension fund (LPP/BVG), the Swiss government grants you a massive tax privilege: The Big 3a.
While most employees are capped at CHF 7,258 per year, you can contribute up to 20% of your net earned income, up to a maximum of CHF 36,288 (2026 limit). This represents one of the most powerful tax deduction tools available to individuals in Switzerland.
However, this privilege comes with a heavy realization: You have no 2nd Pillar. In a traditional job, your employer automatically covers you for disability, provides a death benefit for your family, and builds a retirement pot alongside you.
"Self-employment means freedom, but it also means carrying 100% of the risk. If you only focus on growth (Bank 3a) without addressing protection (Insurance 3a), you are building your business on quicksand."
You must decide: Will you treat your 3rd pillar as just another investment account, or as the fortress that replaces everything a corporate job would have provided?
The 20% Rule Explained
As a self-employed person, you can contribute up to 20% of your net income to your 3a, with a maximum annual limit of CHF 36,288 (2026). Here's how to calculate your maximum contribution:
Example 1 (Moderate Income)
- • Net income: CHF 100,000
- • 20% of net income: CHF 20,000
- Max Contribution: CHF 20,000
- This is below the CHF 36,288 cap.
Example 2 (High Income)
- • Net income: CHF 200,000
- • 20% of net income: CHF 40,000
- Max Contribution: CHF 36,288
- This exceeds the cap, so the limit applies.
This is a massive tax advantage compared to employed individuals, who can only contribute CHF 7,258 annually.
Calculate Your "Big 3a" Potential
*Assumes 20% limit up to CHF 36,288. Tax savings estimated at an average rate of 25%.
Why You Don't Have a 2nd Pillar
Unlike employed workers, you don't have a mandatory 2nd pillar (occupational pension). This means you have no employer-funded retirement savings and no automatic disability or life insurance.
This is why the 3a is so critical for you—it's your only tax-advantaged retirement vehicle and your only source of integrated insurance protection.
Note: You have the option to voluntarily join a 2nd pillar, but most self-employed find the 3a more flexible and cost-effective.
Sole Proprietorship vs. GmbH/AG
If you are a Sole Proprietor (Einzelfirma)
You can contribute up to 20% of your net business income to your 3a. This is straightforward and provides the maximum tax relief.
If you are a GmbH or AG Owner
The rules are more complex. If you are an employee of your own company (drawing a salary), you can only contribute CHF 7,258 annually (the employee limit).
*In certain cases involving distributions, different limits can apply. Consult your accountant for your specific situation.
Managing Variable Income
As a freelancer, your income fluctuates. Here are three strategies for managing your 3a contributions:
1. Percentage-Based
Calculate 20% of your expected annual income and contribute monthly (e.g., CHF 2,000/month if you expect CHF 120,000 income).
2. Lump-Sum Annual
Wait until year-end to see your actual income, then make a single contribution. This is more accurate but requires cash flow planning.
3. Hybrid Approach
Contribute a conservative amount monthly (e.g., CHF 1,500), then make a lump-sum top-up at year-end if income exceeded expectations.
Hans's Insight
Self-employment is about freedom, but financial freedom requires a foundation. I've seen too many entrepreneurs build successful businesses but leave their personal safety net to chance. A 'Big 3a' is the most efficient way to turn business success into private wealth.
"Pay yourself first. The tax man can wait."
You Don't Have a Corporate Safety Net. This is How You Build One.
Disability: The Premium Waiver
If you get sick or have an accident and cannot work for 6 months, your income as a freelancer stops. In a bank 3a, your savings also stop. In an Insurance 3a, the provider takes over your payments. Your retirement pot continues to grow as if you were still working. This is non-negotiable for anyone without an employer-sponsored plan.
Death: Integrated Life Cover
Without a 2nd Pillar, your family is vulnerable. An insurance 3a integrates term life insurance directly into the plan. If the worst happens, your beneficiaries receive a tax-free lump sum instantly. It's often cheaper and more tax-efficient than buying a separate policy later.
The Strategic Realization
For a freelancer, a Bank 3a is a high-performance engine sitting in a car with no brakes and no seatbelts. It's great when things go fast, but it doesn't protect you from a crash. The Insurance 3a is the safety sub-structure your entire financial life depends on.
Hans Steiner
Senior Consultant
Certified Financial Planner (Swiss Federal Diploma) • 20+ Years Expertise
"I specialize in building 'Fortress Plans' for entrepreneurs. Let's design a pension strategy as resilient as your business."
Frequently Asked Questions
I'm healthy and have no family. Do I still need the insurance part? ↓
Are the fees of an insurance 3a worth it compared to a bank? ↓
What if my income fluctuates wildly year to year? ↓
Can I switch back to a regular 3a if I take a full-time job later? ↓
How do I prove my income to be eligible for the 'Big 3a'? ↓
What's my maximum 3a contribution as self-employed? ↓
How do I calculate my maximum contribution? ↓
Can I contribute more in good years? ↓
What if my income is variable? ↓
Should I join a voluntary 2nd pillar? ↓
How does the 20% rule work for GmbH owners? ↓
Can I deduct my 3a contributions from my taxes? ↓
What happens to my 3a if I become employed? ↓
Can I use my 3a to fund my business? ↓
What's the deadline for making contributions? ↓
Can I have multiple 3a accounts? ↓
What if I leave Switzerland permanently? ↓
Is 3a mandatory for self-employed? ↓
Can I pause my insurance 3rd pillar if I have no income? ↓
Ready to Build Your Ultimate Safety Net?
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Last Updated: January 29, 2026