How to Use the Pillar 3a to Pay Less Taxes

Using the tax-privileged pillar 3a to save for retirement is very popular in Switzerland. More than half of employees and 40 percent of self-employed residents contribute to the pillar 3a, according to a report from the Federal Tax Administration. Apart from saving for retirement, tax savings are the most important benefit of using the pillar 3a.

This guide answers the most important questions about how using the pillar 3a affects your taxes.

Which third-pillar products are eligible for tax deductions?

All third pillar solutions that are denominated by the pillar 3a are eligible for tax deductions.

That is the case with these products:

• Pillar 3a accounts from banks, retirement foundations, asset management services, and insurance providers.
• Pillar 3a retirement funds and pillar 3a investment accounts at banks, retirement foundations, asset management services, and insurance providers.
• Pillar 3a term life insurance.
• Pillar 3a loss-of-income insurance.
• Pillar 3a mixed life insurance (life insurance with cash value)
• Pillar 3a savings insurance (life insurance with cash value)

Important: Some of the third pillar solutions listed above are also offered as pillar 3b products. Money you spend on or contribute to pillar 3b solutions is not tax deductible, and cannot be included in the pillar 3a tax deduction in your tax return.

How much can I pay into the pillar 3a each year?

In order to contribute to the pillar 3a, you have to earn an income that is eligible for OASI contributions. That is true whether you earn that income as an employee or through self-employment.

The limit on how much you can pay into the pillar 3a varies depending on whether or not you have a Swiss pillar 2 occupational pension fund:

• With an occupational pension fund: In 2026, you can contribute up to 7258 francs to the pillar 3a. As of 2027, the amount is 7373 francs. This limit applies to both employees who are eligible for an occupational pension fund, and to self-employed people who participate in a pillar 2 pension fund.
• Without an occupational pension fund: You can contribute an amount equal to as much as 20 percent of your annual income, up to a yearly limit. In 2026, the limit is 36,288 francs. As of 2027, the amount is 36,864 francs. This applies to both self-employed people without a pillar 2 pension fund, and to employees who are not eligible for an occupational pension fund.

You can find detailed information in the moneyland.ch guide to pillar 3a contribution limits.

Since 2026, it has been possible to make up for missed pillar 3a contributions from previous years. You can also deduct these extra payments from your taxes. However, you must follow certain rules. For more information, see the moneyland.ch guide on retroactive pillar 3a contributions.

How can I claim the pillar 3a tax deduction?

You can declare pillar 3a contributions made that year on the third page of your Swiss tax return under the tax deductions section. You then subtract that amount from your taxable income along with other deductions. You must submit the tax statements from your pillar 3a service providers along with your tax return to verify the contributions.

How much can I save on taxes by using the pillar 3a?

You can deduct the amount you contribute to the pillar 3a from your taxable income so that you pay less income tax. How much you will save depends on individual factors, including how high your income is, how much you contributed to the pillar 3a, and where in Switzerland you live.

As a general rule, the more income you earn and the higher the taxes are in your municipality, the more money you can save by contributing to the pillar 3a.

moneyland.ch calculated the potential tax savings for residents of three different municipalities:

• City of Zug: This is one of the lowest-tax municipalities in Switzerland.
• City of Zurich: This is the most populous city in Switzerland.
• La Chaux-de-Fonds: This city in the canton of Neuchâtel is known for watchmaking and is also one of the highest-tax municipalities in Switzerland.

* Taxable income without any pillar 3a contributions.
The tax savings calculations are for a person who matches this profile: Unmarried, no children, not a member of a state-recognized church. Based on an annual pillar 3a contribution of 6000 francs. Tax savings are rounded to the nearest whole franc.

The examples above make it clear that the tax savings vary depending on your personal situation. For the profile used in the example, contributing 6000 francs to the pillar 3a could lower the tax bill by between 587 and 2110 francs, depending on the income and place of residence.

How is the pillar 3a taxed?

Assets remain tax free until they are withdrawn from the pillar 3a. They do not count towards your taxable wealth for wealth tax purposes, and interest and dividends earned on pillar 3a assets do not count towards your taxable income.

Taxes are only due when funds are withdrawn from the third pillar – both for regular withdrawals from the age of 60 and for early withdrawals.

How can I optimize my taxes in the long term?

Making regular payments is only one part of tax optimization. It is equally important to open multiple pillar 3a accounts. This allows you to stagger payouts from the third pillar over several years, thereby saving even more on taxes.

There is no legal limit to the number of pillar 3a accounts you can have. In practice, however, a guideline of five accounts has become established.

How much tax do I have to pay taxes when I withdraw money from the pillar 3a?

When you withdraw assets from the pillar 3a, you pay a retirement capital withdrawal tax. This tax applies to both standard withdrawals when you reach the required age (60 years old) and to early withdrawals.

All lump-sum withdrawals made from both the pillar 3a and from pillar 2 pension funds and vested benefits accounts in that tax year are added together when calculating capital withdrawal taxes and taxed at a special tax rate. You do not pay income taxes.

How much retirement capital withdrawal tax you will pay on withdrawals from the pillar 3a depends on where you live. According to the Federal Tax Administration, withdrawals of 100,000 francs in one tax year would generate between 1534 and 8338 francs in taxes, depending on the municipality. The following map of Switzerland shows the tax burden in all municipalities.

More on this topic:
Compare pillar 3a accounts now
Compare pillar 3a retirement funds now
Pillar 3a online asset management services compared
Pillar 3a accounts: Key tips
Retirement funds: Key tips
Pillar 3a contribution limits explained