Social security contributions and insurance: what are the obligations for self-employed individuals?
Introduction
You've just started out as self-employed in Switzerland or you're considering taking the plunge? Congratulations! But after the excitement of the first administrative steps, a crucial question arises: what are your obligations regarding social security contributions and insurance?
Unlike employees whose contributions are partly covered by their employer, self-employed individuals must manage their entire social protection themselves. The Swiss system distinguishes between mandatory insurance such as self-employed AHV, and optional insurance that is strongly recommended such as UVG or daily sickness benefit insurance.
The complexity? Each canton applies its own rules for certain benefits such as family allowances. Amounts vary according to your income, your status and your place of activity. And unlike unemployment insurance ALV, which is generally inaccessible to self-employed individuals, you must anticipate quiet periods by other means.
This guide explains concretely which insurance policies you must take out, which are strongly recommended, how to calculate your contributions and manage your obligations canton by canton. The objective: to enable you to focus on your activity with complete peace of mind.
📌 Summary (TL;DR)
As self-employed in Switzerland, you must mandatorily contribute to AHV/IV/EO and family allowances according to your canton. UVG, daily sickness benefit and BVG insurance are optional but strongly recommended to protect your income. Unemployment insurance ALV generally remains inaccessible to self-employed individuals.
Your contributions are calculated on your net income and vary according to your compensation fund. Anticipate quarterly instalments and optimise your tax deductions to better manage your cash flow.
📚 Table of contents
Mandatory social insurance for self-employed individuals
In Switzerland, the social protection system is based on the principle of three pillars: state provision (AHV/IV), occupational provision (BVG) and private provision. For self-employed individuals, obligations differ significantly from employee status.
Unlike employees whose contributions are automatically deducted, self-employed individuals must manage their affiliations and payments themselves. Only certain insurance policies are legally mandatory, but others remain strongly recommended to avoid major financial risks.
This increased responsibility implies a good understanding of the system and rigorous planning of your social security contributions.
AHV/IV/EO: the essential basic insurance
Self-employed AHV (Old Age and Survivors' Insurance), coupled with IV (Disability Insurance) and EO (Income Compensation Allowances), constitutes the fundamental social obligation for all self-employed individuals in Switzerland.
You must register with your compensation fund as soon as you start your activity. This step is part of the essential administrative formalities to get started.
Contributions vary between 5.371% and 10% of your net income, depending on the amount. The fund calculates provisional instalments based on an estimate, subsequently adjusted according to your actual declared income.
The certificate of self-employed status issued by the fund is essential to avoid being considered an employee.
Family allowances: according to your canton
All self-employed individuals must affiliate with a family allowance fund. This obligation applies even without dependent children, as contributions finance the system for everyone.
Amounts vary considerably according to cantons. In Geneva, expect around 2.67% of your income, compared to 1.9% in Zurich, 2% in Vaud, and up to 3.1% in Valais. These differences directly impact your charges.
If you have children, you receive monthly allowances whose amounts also differ by canton: approximately 300 CHF/month in Geneva, 200-250 CHF in Zurich for one child.
Affiliation is generally done through your AHV compensation fund.
Optional but strongly recommended insurance
Beyond legal obligations, several insurance policies remain optional for self-employed individuals but prove essential in practice. Their absence can expose you to considerable financial risks.
An accident or prolonged illness without adequate cover can quickly compromise your activity and your income. Self-employed individuals do not benefit from the automatic protections of employees.
These insurance policies represent an investment in your financial security. Their cost must be integrated from the outset into your profitability calculations and your pricing.
Health insurance KVG: mandatory as a resident, not as self-employed
Basic health insurance (KVG) is mandatory for all Swiss residents, regardless of their professional status. This obligation therefore does not stem from your self-employed activity but from your residence.
KVG covers routine medical care but not accidents if you are covered elsewhere. The choice of your excess (from 300 to 2,500 CHF) directly influences your monthly premiums.
A high excess reduces your premiums but increases your costs in case of treatment. Adapt this choice to your health situation and your financial capacity.
Accident insurance UVG: essential protection
Unlike employees who are automatically covered by their employer, self-employed individuals do not benefit from mandatory UVG insurance. This gap can have dramatic consequences.
Without UVG cover, a professional or leisure accident generates significant medical costs and no loss of earnings compensation. Debts accumulate quickly.
Two solutions exist: include accidents in your KVG (economical option but limited cover) or take out voluntary UVG (better protection, more comprehensive benefits).
Compare offers according to your activity and your risks. Comprehensive UVG costs approximately 1-2% of your insured income.
Daily sickness benefit insurance: your safety net
This insurance compensates for your loss of income in case of prolonged illness. Without it, an incapacity to work for several months can ruin your activity.
Cover varies from 50% to 80% of your insured income. The higher the rate, the higher the premium. The waiting period (period before benefits begin) also influences the cost: 30, 60 or 90 days.
Premiums depend on your age, your income and the level of cover chosen. Expect between 2% and 5% of the insured income annually.
This insurance constitutes your real financial safety net in case of hardship.
BVG (2nd pillar): optional provision for self-employed individuals
Optional BVG allows self-employed individuals to build up retirement capital whilst benefiting from substantial tax advantages. Unlike employees, you are not obliged to do so.
Contributions paid are deductible from your taxable income, significantly reducing your tax burden. This saving partially offsets the cost of contributions.
Access generally requires a minimum income (variable according to foundations). You can also make purchases for missing years to increase your capital and your deductions.
Compare offers from different foundations: management fees, returns, flexibility. A good 2nd pillar optimises your provision and your taxation simultaneously.
Unemployment insurance ALV: generally not accessible
Self-employed individuals do not contribute to ALV (unemployment insurance) and therefore have no entitlement to it in case of cessation of activity. This absence of a safety net fundamentally distinguishes self-employed status.
Only exception: if you simultaneously carry out a part-time salaried activity, you contribute and can receive reduced benefits in case of loss of that salaried employment only.
Faced with this absence of protection, build up emergency savings covering at least 3 to 6 months of fixed charges. Daily sickness benefit insurance also offers a partial alternative.
Cantonal particularities and compensation fund
Obligations and contribution rates vary according to cantons, particularly for family allowances. These differences directly impact your monthly social security contributions.
Examples of family allowance rates by canton:
Geneva: 2.67% of income
Vaud: 2.0% of income
Zurich: 1.9% of income
Valais: 3.1% of income
Bern: 1.9% of income
You generally affiliate in the canton where your main activity is carried out, not necessarily that of your domicile. In case of activity in several cantons, specific rules apply.
Compensation fund: which fund to join?
Three types of compensation funds exist in Switzerland: cantonal funds (managed by each canton), professional funds (linked to certain sectors of activity) and the supplementary fund (last resort solution).
Favour a professional fund if your sector offers one: services often more adapted and specialised support. Otherwise, the cantonal fund of your place of activity is perfectly suitable.
Affiliation is done online or by paper form, with presentation of documents proving your self-employed activity (commercial register, client contracts, professional premises).
The fund assesses your status and issues the essential certificate of self-employment.
Calculating the total cost of your social security contributions
For a net income of 80,000 CHF/year, here is an estimate of the annual social security contributions of a self-employed individual:
AHV/IV/EO: 7,600 CHF (9.5% on average)
Family allowances: 1,600 CHF (2%)
Basic KVG: 4,800 CHF (average flat rate)
Optional UVG: 1,200 CHF (1.5%)
Daily sickness benefit: 2,400 CHF (3%)
Optional BVG: 6,400 CHF (8%)
Total: approximately 24,000 CHF/year, or 30% of income.
These charges must imperatively be integrated into your rates and your invoicing to ensure the viability of your activity.
Practical advice for managing your social obligations
Managing social security contributions requires organisation and anticipation. A few good practices will save you stress and unpleasant financial surprises.
Keep a precise calendar of payment deadlines for each insurance. Automate monthly transfers when possible to never forget.
Systematically keep all payment receipts and certificates. These documents are essential for your tax return and in case of inspection.
Reassess your cover annually according to changes in your personal and professional situation.
Anticipating instalments and annual adjustment
The compensation fund calculates your AHV contributions on provisional instalments based on an income estimate. This estimate can prove inaccurate, especially at the start of activity.
Provision monthly approximately 25-30% of your income to cover all your social security contributions. Place this sum in a separate account to avoid any temptation.
At the end of the year, the fund adjusts your contributions according to your actual declared income. If you have underestimated your income, you will have to pay a sometimes substantial supplement.
Adjust your instalments as soon as your activity takes off to avoid a painful adjustment.
Tax deductions: optimise your situation
All your AHV/IV/EO and BVG contributions are fully deductible from your taxable income. These deductions significantly reduce your final tax burden.
Basic health insurance premiums (KVG) are also deductible within cantonal limits. Supplementary insurance is generally not.
Keep all payment receipts meticulously: contribution certificates, premium invoices, bank statements. These documents prove your deductions in case of request from the tax authorities.
Good tracking of your income facilitates your tax return. BePaid does not replace a tax adviser but helps you track your receipts precisely.
When to consult a professional?
Certain situations justify the intervention of an insurance broker or a specialised fiduciary. Do not remain alone facing the complexity of the system.
Consult a professional when starting your activity to establish a coherent insurance strategy. A broker compares offers and often negotiates better conditions.
A change in family situation (marriage, birth, divorce) impacts your needs and your rights. Take stock with a specialist.
In case of very fluctuating income, a fiduciary optimises your provisional instalments and your tax planning. BePaid facilitates your invoicing tracking but does not replace personalised support for your insurance.
Social security contributions represent a significant part of your budget as self-employed in Switzerland. Between mandatory AHV/IV/EO, cantonal family allowances and strongly recommended supplementary insurance (UVG, daily sickness benefit, BVG), expect between 20% and 30% of your net income. These obligations may seem heavy, but they constitute your social protection and that of your family.
The essential thing is to anticipate these costs from the outset by provisioning monthly the necessary amounts. Affiliate quickly with a compensation fund, declare your income accurately and don't forget that your contributions to the 2nd pillar and daily sickness benefit insurance are tax deductible. These deductions significantly reduce your effective tax burden.
To manage your self-employed activity with peace of mind, start by mastering your invoicing and your cash flow. Create your free BePaid account to issue your compliant QR-invoices, track your payments and anticipate your incoming cash. Well-managed invoicing is the basis of clear accounting and stress-free social declarations.
