Sure you qualify as self-employed?

Before you look into the matter: are you sure you are covered by social security as a self-employed person? If you are the owner of an AG or GmbH, then you belong to your own employees and can insure yourself in their pension fund. You are also automatically insured against accidents.

You must pay AHV contributions yourself

If you are self-employed, you must pay all your AHV contributions yourself. It is important this happens without interruption. The amount of these contributions depends on your salary. They vary between 5.196% and 9.650% of your income. This also includes the compulsory portion for disability insurance (IV) and for loss of earnings (EO).

The compensation office sometimes determines the final AHV contributions for your financial year only after some years. They are based on your final tax bill. After a successful year it the subsequent AHV bill could be much higher than usual. So put aside enough money for your AHV contributions.

Generali tip

As a self-employed person you would like as little income as possible to be taxed. However, make sure that your average salary does not fall below the AHV ceiling of CHF 88,200 (as at 2023). If this happens, you will not receive the maximum AHV pension later. You will therefore need to carefully weigh up what is more important to you.

These forms of insurance cover the most important risks

Self-employed people are not automatically insured against accidents either. And in the event of illness, the health insurance only covers the costs of treatment. Risks such as incapacity to work or death must be insured by the insured person themselves. With these forms of insurance you’ll cover the most important risks:

UVG accident insurance

It is not compulsory, but highly recommended. If you are self-employed and have an accident, this insurance pays for your loss of income and treatment costs (medical treatment, hospitalisation etc.). In the event of death, your surviving dependants will receive a pension. Depending on the sector in which you work, you can take out this insurance with Suva or with a private insurance company. Private insurance usually provides you with better benefits. The daily allowance, for example, is 100%. For Suva it is only the legally prescribed 80%.

Generali accident insurance

Sickness allowance

If you fall ill, the health insurance company will pay your treatment costs (minus excess and deductible), but not the loss of income. You insure them with daily sickness allowance insurance. This pays 80% of the insured salary for two years. In the worst case, this daily allowance will bridge the time until you receive a disability pension (IV). However, you must be able to prove that you have actually lost your insured salary during your illness.

Generali daily sickness allowance insurance

Pension for loss of earning capacity

If you are unable to work due to illness or accident, you and your family will live on the money from the 1st and possibly the 2nd pillar. You can fill the gap with the 3rd pillar. The incapacity to work insurance pays you an agreed pension if you fall ill or have an accident during the term of the contract. If you are only partially unable to work, the pension will be reduced accordingly.

Generali income protection insurance

Lump sum death benefit

With this insurance, you will protect your business partners and your company from financial problems in case you should die. If this occurs during the term of the insurance policy, the insurance company will pay out the agreed lump sum. The payout goes to the person registered in the policy as a beneficiary.

Generali death benefits insurance

Other risks

These forms of insurance cover the most common risks. As a self-employed person you can of course insure other risks as well. The extent of your insurance will depend very much on your personal needs.

Insuring yourself voluntarily in the 2nd pillar

If you are self-employed, you do not have to belong to a pension fund. Insurance in pillar 2 is therefore not compulsory. However, you can voluntarily join a pension fund, provided you earn at least CHF 22,050 a year (as at 2023). In the 2nd pillar you have to pay contributions for employees and for employers.

How to insure yourself voluntarily in the 2nd pillar:

• If your company has employees, you can join your employees’ pension fund. Whether this is permitted is specified in the regulations of the respective pension fund.

• If you are a member of a professional association which has its own pension fund, you can join it.

• If neither of the above applies, you can join the BVG National Substitute Pension Plan Foundation (Stiftung Auffangeinrichtung BVG) at www.chaeis.net. You’ll have the option here of insuring the compulsory amount.

Generali tip

Have you taken out management insurance with the pension fund for the managers of your company? Then as an entrepreneur, you can also join this insurance scheme. And you do not need the basic insurance under the BVG either. It is worth examining this option.

Independent and flexible with pillar 3a

If you are self-employed, you only need to take out a few compulsory insurance policies. This means it’s all the more important that you analyse your situation in detail and obtain comprehensive advice. This will ensure you have made good provision for emergencies and old age.

For many self-employed people, pillar 3a is the perfect pension solution. With this private pension plan, you’ll be insured against all the necessary risks, have flexibility and will save taxes.

Generali tip

Many self-employed people decide against a pension fund and opt instead for an individual solution with pillar 3a. Why? Pension funds insure you in the event of disability or death, but cannot be adapted to personal needs. As a single, childless person, you still pay contributions for a survivor’s pension. With private pension provision you have much greater flexibility.

Step by step to retirement provision

Have you recently become self-employed? Then focus first of all on your new company. After the initial phase, you can then plan the right pension plan step by step.

• Before and during the initial phase: don’t overreach yourself right at the start. It makes no sense to take out large loans while saving large amounts for old age. The first priority is to cover major risks such as death and disability. The best solution is a tailor-made risk insurance policy without a savings component. Also make sure that you pay in your AHV contributions without any gaps. Find out more about old-age provision so you can make the right decisions after the initial phase.

• After the initial phase: as a self-employed person, you should now opt for a private pension. This way you’ll save for old age and reduce your tax bill. Pay the maximum amount into your pillar 3a. If you want to save even more tax, you can buy into a pension fund. You can also deduct these amounts from your income.

Generali tip

if you are a self-employed person you would like as little income as possible to be taxed. But don’t forget that if your salary is low, you can also pay less into pillar 3a. Find the ideal balance.