What does self-employment mean?
The Swiss social insurance system differentiates between employees and self-employed persons.
Find out more here about self-employment.
What does self-employment mean?
Old-age and survivors’ insurance [AHV], disability insurance [IV] and the Loss of Earnings Compensation Ordinance [EO] distinguish between employees and self-employed persons. The AHV compensation offices decide who is classified as self-employed.
Any person who has not been employed to perform his/her activities and who bears the economic risk alone is classified as self-employed. For social insurance purposes, the following persons are deemed to be self-employed:
They work in their own name and on their own account.
They perform their work independently.
Would you like to be recognised as a self-employed person? If so, you need to register with an AHV compensation office.
There is also such a thing as “sham self-employment”. This term is used to describe a situation in which a person passes himself/herself off to the authorities as self-employed, although is actually employed.
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Part-time self-employment
Would you like to be recognised as a part-time self-employed person? If so, at least one of the following conditions must be met:
- You also work as an employee. Or:
- You receive unemployment benefit. Or:
- If you are married or living in a registered partnership, your partner also pays your AHV contributions out of his/her income.
Above what amount do contributions need to be paid for this type of part-time activity? The compensation office only levies contributions on net income up to CHF 2,300 per calendar year (from 2025 CHF 2,500) if you ask to pay them. “Net income” means income minus expenses. If your income is higher than this, you need to register with a compensation office.
Self-employed professions and activities subject to a licensing requirement
Some professions and activities are subject to strict requirements; you need to have a licence if you would like to perform them. Within a regulated profession you may need to have completed special training; in some areas, it is sufficient if you are able to demonstrate comprehensive professional experience in the specific area. For instance, doctors need to be licensed in order to practise medicine.
You can find further information concerning regulated professions on the following page. You can also find out whether you need a licence in order to engage in self-employed activity.
What are the characteristic features of self-employment?
In a nutshell: a self-employed person works under his/her own name and on his/her own account. He/she works independently and bears the financial risk individually.
Specifically, the following characteristics are indicative of self-employed activity:
The person has made significant investments, for instance in order to purchase equipment or for renovation/new construction.
He/she acts in his/her own name and on his/her own account.
He/she has his/her own business premises.
A self-employed person bears costs as well as the risk of loss.
He/she employees staff.
He/she is free to decide how work is to be performed. This means that the person is not subject to any instructions.
He/she has equal status with the person who placed the order.
He/she works for more than one customer.
The AHV compensation office assesses with reference to the specific individual circumstances whether any particular gainful activity constitutes self-employment or employment. In many cases, activity may feature characteristics of both. The key consideration is your actual economic circumstances, and not any arrangements between those involved, such as contracts.
If you would like to be recognised as self-employed, you need to demonstrate to the compensation office that you have already taken up your activity. In order to do so you will need, amongst other things, invoices and contracts.
It is recommended that you ensure that your new status is recognised within the first few months of taking up the activity. This means that you will quickly benefit from the protection afforded by social insurance.
Legal status
As a self-employed person you do not have to register with the Commercial Register, as your status is established by the compensation office. However, registration is mandatory for enterprises. According to the law on AHV, the following types of legal status are regarded as self-employment:
Legal status | Registration with Commercial Register required | Registration as selfemployed required |
|---|---|---|
Individual enterprise | mandatory if revenues exceed CHF 100,000 | Proprietor |
Simple partnership | No | Every partner |
Partnership | Yes | Every partner |
For the purposes of AHVG, the proprietors of companies limited by shares or limited liability companies are regarded as employees of their own company. They do not therefore need to register as self-employed. On the other hand, companies limited by shares and limited liability companies are legal persons. This means that they have to register with an AHV compensation office and pay employer contributions.
Statutory requirements. The role of compensation offices
Old-age and survivors’ insurance [AHV], disability insurance [IV] and the Loss of Earnings Compensation Ordinance [EO] distinguish in Switzerland between employees and self-employed persons. Compensation offices assess and decide who is classified as self-employed in each individual instance.
If you perform self-employed activity, according to Swiss law you are obliged to register with a compensation office as self-employed. The allowance for those older than the reference age is CHF 16,800 per year.
There are various types of compensation office:
Cantonal compensation offices. You can register as self-employed with the office of the canton in which your business is based.
Association compensation offices. Professional associations have their own compensation offices. Anyone wishing to register with such an office has to be a member of the respective association.
You will have to deal with either a cantonal or an association compensation office. You can find here a list of all cantonal compensation offices and association compensation offices.
What insurance cover do I have?
As a self-employed person, you are insured under AHV, IV and EO in exactly the same way as employees. As such, you have to pay AHV, IV and EO contributions.
Social insurance schemes should primarily offer protection against particular risks. They do so by providing benefits in the form of pensions, loss of earnings compensation and family allowances or cover the costs of invalidity due to accident or illness. These benefits include for example loss of earnings compensation during maternity leave, paternity leave or military service. Upon reaching the reference age, as an insured person you also receive an AHV pension.
Social insurance benefits are financed by, amongst other things, contributions paid out of income from gainful activity. Thus, as a self-employed person you are obliged to pay social insurance contributions.
Self-employed people are not obliged to take out unemployment or accident insurance. In addition, they do not fall under the mandatory occupational benefits rules (pillar 2).
However, it is recommended that you voluntarily take out accident insurance according to the Swiss Accident Insurance Act [UVG]. You can find a list of all accident insurers here. You also need to consider whether to take out daily sickness benefits insurance. A daily benefit is paid out in the event that you are unfit for work due to illness. This means that the insurance helps you cover the costs associated with your business.
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How much will social insurance cost me?
Old-age and survivors’ insurance [AHV], disability insurance [IV] and Loss of Earnings Compensation Ordinance [EO] contributions are mandatory. Family Compensation Office (FAK) contributions are also payable, the level of which differs from canton to canton.
Your social insurance contributions depend on your profit. The net profit is calculated according to the simple calculation “income minus expenses”, and is equivalent to net income. The tax office provides the AHV compensation office with details concerning the profit on which you have not yet paid any social insurance contributions. After a technical analysis, the compensation office issues a payment demand for the contributions. These contributions are payable under all circumstances – irrespective of whether or not you have already been recognised as self-employed.
If you earn less than CHF 9,800 (fromf 2025 CHF 10,100) during any given year (whether from self-employment or employment), you will nonetheless be required to pay the minimum AHV contribution. This means that there is no contribution gap, which would result in a lower pension.
Any person performing gainful activity pays social insurance contributions from 1 January after reaching the age of 17. This contribution obligation ends when the gainful activity is given up. Special rules apply if you work after the reference age.
How high are my contributions?
AHV, IV and EO contributions amount to between 5.371 percent and 10 percent of net annual income. The actual level is dependent upon income. The minimum contribution is currently (2024) CHF 514 per year (from 2025 CHF 530). In addition, a percentage contribution for family allowances is also due. The precise level depends upon the canton in which the family compensation office is based. In addition, the compensation office collects a contribution for administrative costs.
You do not pay contributions on the full amount of net income. Before the compensation office calculates your personal AHV/IV/EO contributions, it deducts a percentage of any equity capital that you have invested in the business. It takes account of equity capital invested up to 31 December; so the cut-off date for contribution year 2023 would be 31 December 2023.