The problem: tax that eats into your income every year
Every year, part of your salary goes to tax with no visible return: you contribute, you declare, you pay. For an average Geneva income, the tax bill often runs into several thousand francs, and the rate rises with income. Most taxpayers accept this figure as inevitable, without realising that part of it is entirely avoidable.
The key is your marginal rate: the rate applied to your last franc earned. The higher your income, the higher that rate, and the more each franc you can remove from your taxable income saves you.
The solution: deduct your 3rd pillar from your taxable income
Pillar 3a is a retirement savings scheme where every contribution is deducted directly from your taxable income. You do not lose this money: it builds your retirement capital. But for tax purposes, it is as if you never earned that amount.
You earn CHF 90,000 and pay the ceiling of CHF 7,258 into your 3a. You are now taxed on only CHF 82,742. At a marginal rate of 25%, that is around CHF 1,800 less tax this year, for money that stays yours and grows until retirement.
How much can you save?
The order of magnitude depends on your income, your municipality and your family situation, but it is concrete and immediate:
*Estimate for a contribution at the ceiling, depending on your marginal rate and municipality. The simulator calculates your personalised figure in two minutes.
The right timing: contribute before 31 December
For the contribution to be deducted from the current year, it must be credited to your 3rd pillar account before 31 December. This creates a natural year-end deadline: a contribution on 2 January counts only for the following year. Ideally you open your 3rd pillar early in the year to spread contributions, but it is never too late to act before the cut-off.
Employee, self-employed, cross-border worker: what changes for you
- Employee with a pension fund: up to CHF 7,258 deductible per year. The most common case, with an immediate saving.
- Self-employed without a pension fund: up to 20% of income, capped at CHF 36,288. See our self-employed guide.
- Cross-border worker: deduction is possible subject to quasi-resident status. See our cross-border guide.
Based at Place Cornavin in Geneva, we compare the offers of the main insurers and banks and structure your 3rd pillar to maximise your tax saving. Free of charge, with no obligation.