swiss tax deductions third pillar 3a
Investing & Retirement

Tax Savings With the Pillar 3a

January 10, 2023 - Daniel Dreier

Learn how to save up to 1000 francs on taxes in Switzerland by taking advantage of pillar 3a retirement savings options.

In 2024, Swiss taxpayers enrolled in occupational pension funds (pillar 2) can contribute up to 7056 Swiss francs to their pillar 3a retirement savings. Those not enrolled in occupational pension funds can contribute up to 20 percent of their annual income to their 3a retirement savings, up to a maximum annual contribution of 35,280 francs.

Pillar 3a contributions can be deducted from taxable income

The benefit of contributing to the pillar 3a providence category is that the full amount deposited can be deducted from your taxable income.

Swiss tax declaration forms include a unique field in which you can enter the amount you have contributed to the third pillar. Swiss banks and insurance companies will provide you with a statement showing the exact amount of contributions made, both for your own reference and for tax purposes.

Pillar 3a assets are not subject to wealth tax

Assets held in the pillar 3a are tax free until you withdraw them. They do not count towards taxable wealth and you do not have to pay wealth tax pillar 3a retirement assets.

Returns and interest do not have to be declared in your tax return. Neither income tax nor withholding tax applies. This is true for 3a savings accounts, 3a retirement funds and 3a cash value life insurance policies.

Lower income taxes are the main benefit of pillar 3a contributions

Depending on how high your taxable income is, making the maximum annual pillar 3a contributions can save you well over 1000 francs per year on income taxes.

Low taxes on pillar 3a withdrawals

When you withdraw money from the pillar 3a, you pay a capital withdrawal tax on those assets. Capital withdrawal taxes vary between cantons, but are generally much lower than income tax rates. This means the tax savings when you pay in are higher than the taxes you pay when you withdraw. Depending on your wealth, the wealth tax saved over the years that assets remain in the pillar 3a may also be significant.

Important: Pillar 3a assets can only be cashed out when you reach the age of 60, or if you meet the criteria for early withdrawals. These include becoming self-employed, financing a primary residence, and leaving Switzerland permanently.

Multiple pillar 3a solutions are better than one

Using multiple pillar 3a accounts has a number of benefits. There is no legal limit to the number of 3a accounts you can open. You can move pillar 3a assets from one account to another (in full) at any time.

Pillar 3a accounts can only be cashed out in full. You cannot withdraw just part of your account balance. Dividing pillar 3a assets between multiple accounts enables you to spread the withdrawal of your pillar 3a assets over several years to avoid being bumped into high tax brackets. Holding accounts at multiple banks also minimizes your risk of loss resulting from bank bankruptcies. Additionally, you get more flexibility because you can move just part of your pillar 3a assets to a different pillar 3a solution if you choose to.

Investment funds or savings accounts?

Pillar 3a retirement accounts generally have marginally higher interest rates than standard savings accounts. They provide a low-risk vehicle in which to park your retirement savings while earning some interest.

But in addition to pillar 3a savings accounts, you can also make use of pillar 3a retirement funds and/or pillar 3a asset management services. These let you invest in stocks, bonds and other asset classes. Dividendss and capital gains are tax free as long as they remain in the pillar 3a.

When you hold assets over long terms, as is typically the case with retirement saving, investment solutions can deliver higher yields than savings accounts. Investment solutions come with a certain amount of risk. The rule of thumb is: the longer the investment term, the lower the risk of making losses and the higher the chance of making high returns. has the most comprehensive pillar 3a retirement fund comparison in Switzerland. Find the best 3a interest rates and save on taxes now.

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Editor Daniel Dreier
Daniel Dreier is editor and personal finance expert at
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