Help me understand the 20% of the net income rule as a self employed person (pillar 3a)

Wife owns her own business (sole proprietorship). She does not have a 2nd pillar.

The business is not as big to need a tax accountant, we’re still doing it by ourselves and everything is going quite well but this I don’t understand completely: This year is the first one where she’s been making a bigger profit than the money needed to re-invest and we started to share expenses by her “paying herself” a salary from her business account to our joint account.

We opened a Finpension account for her and we’re not quite in agreement on how to understand the max. 20% of net income rule for people who have a sole proprietorship (Einzelfirma).

Me: The way I understand the max. 20% of net income which is the profit + her salary. So say at the end of the year she has 10k profit and has paid herself 50k. That would be 20% of 60k which is 12k.

She: The way she understands the max. 20% of net income is 20% of her salary. So in the above that would be 10k.

To me “her way” doens’t make sense since in her taxes it does not matter if the money is in one or the other account, what’s hers is her businesses, what’s the businesses is hers.

What is your understanding of the rule?

EDIT: We are planning to obtain a tax consultant in the future. The way the business is going I think next year it will probably be too big for us.

Sole proprietorships are not taxable as companies, as they are not legal entities (corporations). Every sole trader pays tax on his/her private and business income as well as private and business assets as a whole and not separately.

Self-employed persons who are not affiliated to a pension fund may pay up to 20% of their earned income (net according to their tax return after deduction of AHV/IV/EO), but no more than the amount of the so-called large pillar 3a, into the tied 3rd pillar.

As the owner of a sole proprietorship, you do not pay yourself a regular salary. Your salary consists of the taxable profit generated by your sole proprietorship. This taxable profit after social deductions is the number of which 20% or 35’280.- can be paid into 3a.


So that would be business profit + salary.

I added the summary to the above text to clarify.

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As an owner in the same situation (KLG but that is basically the same than sole propriorship), I confirm this.

Basically the full profit is equal to taxable income. (As the “wealth” of the company has to be added to your personal wealth).

That is the biggest drawback of the sole propriorship, the company and you (well your wife in this case) are one and not separated entities.

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Your wife has no salary it she isn‘t employed by her own legal company (GmbH/AG), thus she only has a profit. It makes no difference if she transfers a certain amount from her business account to her personal account.

So 20% of her net profit. The value which you would enter in the tax declaration.


@Cortana @Patirou @logitacher Thank you all! I appreciate the help!