Tax deductibility of pillar 3a contributions - pension fund affiliation determines the amount of contributions

In Switzerland, pillar 3a offers an attractive tax option for private pension provision. The maximum amount of deductible contributions depends on whether a taxable person is affiliated to a pension fund or not.

Deduction option with pension fund connection

Employees who pay into the second pillar can make additional contributions to pillar 3a, albeit to a reduced extent (maximum CHF 7,258 in 2025). This so-called small deduction corresponds to a maximum of 8% of the upper limit according to BVG Art. 8 para. 1. However, the deductible amount may not exceed the net earned income itself.

Deduction option without pension fund connection

However, people who do not belong to a pension fund (generally self-employed persons, but also employees whose annual salary does not reach the BVG entry threshold) benefit from a generally higher deduction option. This is intended to compensate for the partial lack of occupational pension provision.

You may deduct an annual contribution of up to 20% of your net earned income, but no more than 40% of the upper limit contribution according to BVG 8 I (large deduction), which corresponds to an amount of CHF 36,288 in 2025. If losses arise from self-employment, no deduction is possible. The deduction option may also be reduced accordingly in years with low income.

As the final income is often not yet known at the beginning of the year, it may therefore be necessary to reclaim excess contributions from the pension provider.

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