Save taxes: Those who pay into the 3rd pillar immediately pay less tax.

You finally earn a decent monthly salary and ask yourself if there are smarter things to do than keep the money in your salary and savings account? Yes, there most certainly are. And even if the terms "pension" and "third pillar" give many of our generation a headache, it's worth looking into. 

Save up to CHF 2500 in taxes 

The money you pay into your 3a pillar can be deducted fully from your taxable income. This means that if you pay in the maximum annual amount of CHF 6,883 (as of 2022), you can reduce your annual tax bill by up to CHF 2,500, depending on your income and place of residence. This would pay for a decadent summer holiday. Or even that new racing bike you've been ogling?

But it gets even better: the credit balance on your 3a account is not taxed as wealth/assets. This means that, on the one hand, no wealth tax is due, and more importantly interest and dividend contributions are exempt from income and withholding tax. 

Savings advantages when paying out 

You can also save taxes if you have your 3rd pillar assets paid out (you can read here exactly how and when this is possible). This is because the withdrawals are taxed separately from the rest of your income and therefore at a reduced tax rate (capital payment tax). 

But be careful: Since the capital payment tax is often progressive, you will pay more in percentage terms when the funds are paid out, the higher the amount. It is therefore advisable to keep several 3a accounts or securities accounts, which are then closed in different years. 

But before things get too complicated, it's best to get the Caveo app and our free advice. We'll make sure you're perfectly set up in terms of insurance and pension provision, and take care of all the paperwork for you.