If you are considering withdrawing money from your pension fund, vested benefits account, or pillar 3a, it’s important to know that you will be subject to capital withdrawal tax. The tax rates on these withdrawals can vary significantly from one canton to another. Our comparison of cantons, along with calculation examples, will help you understand the tax implications. Additionally, we offer tips on how to reduce your overall tax burden.
Table of contents
When do I have to pay capital withdrawal tax in Switzerland?
Withdrawals from the 2nd and 3rd pillars are taxed separately as capital, at a reduced tax rate. The capital withdrawal tax is levied when you:
- Withdraw funds from your pension fund
- Withdraw funds from your 3a pillar
- Withdraw funds from your vested benefits account
The tax is levied at the federal, cantonal, and municipal levels. If you belong to a religious denomination, a tax is also levied for the church.
Pillar 3a withdrawal tax: comparison of the cantons
The withdrawal tax on pillar 3a differs depending
- on the canton
- and the amount of capital.
We have listed the tax rates for lump-sum withdrawals from pension funds and pillar 3a from all cantons, namely municipal, cantonal, and federal taxes combined. The table can be sorted as desired.
We have also created an interactive map of Switzerland that lets you compare taxes.
| 50'000 | 100'000 | 250'000 | 500'000 | 1 Mio. | 2 Mio. | 5 Mio. | 10 Mio. | 20 Mio. | |
|---|---|---|---|---|---|---|---|---|---|
| AG, Aarau | 3.12% | 4.85% | 7.09% | 8.22% | 8.77% | 8.95% | 9.06% | 9.10% | 9.11% |
| AI, Appenzell | 2.38% | 3.31% | 4.60% | 5.14% | 5.34% | 5.34% | 5.34% | 5.34% | 5.34% |
| AR, Herisau | 7.56% | 7.94% | 8.96% | 9.91% | 11.14% | 11.65% | 11.96% | 12.06% | 12.11% |
| BE, Bern | 3.50% | 4.63% | 6.53% | 8.26% | 9.62% | 10.42% | 10.96% | 11.15% | 11.24% |
| BL, Liestal | 3.46% | 3.84% | 4.86% | 6.72% | 9.56% | 9.72% | 9.72% | 9.72% | 9.72% |
| BS, Basel | 3.66% | 5.29% | 8.26% | 9.45% | 9.97% | 10.14% | 10.23% | 10.27% | 10.28% |
| FR, Fribourg | 1.96% | 3.24% | 6.96% | 9.30% | 10.40% | 10.85% | 11.12% | 11.21% | 11.26% |
| GE, Genève | 2.53% | 4.13% | 6.22% | 7.41% | 8.11% | 8.38% | 8.54% | 8.59% | 8.62% |
| GL, Glarus | 4.79% | 5.17% | 6.19% | 6.73% | 6.93% | 6.93% | 6.93% | 6.93% | 6.93% |
| GR, Chur | 2.91% | 3.28% | 4.31% | 5.76% | 5.96% | 5.96% | 5.96% | 5.96% | 5.96% |
| JU, Delémont | 5.39% | 6.17% | 8.56% | 9.64% | 10.11% | 10.24% | 10.32% | 10.35% | 10.36% |
| LU, Luzern | 2.27% | 3.76% | 5.45% | 6.22% | 6.53% | 6.58% | 6.62% | 6.63% | 6.63% |
| NE, Neuchâtel | 4.89% | 5.68% | 7.83% | 8.46% | 8.75% | 8.80% | 8.83% | 8.84% | 8.84% |
| NW, Stans | 2.67% | 3.64% | 5.01% | 5.55% | 5.74% | 5.74% | 5.74% | 5.74% | 5.74% |
| OW, Sarnen | 5.28% | 5.66% | 6.68% | 7.22% | 7.42% | 7.42% | 7.42% | 7.42% | 7.42% |
| SG, St. Gallen | 5.51% | 5.88% | 6.91% | 7.45% | 7.65% | 7.65% | 7.65% | 7.65% | 7.65% |
| SH, Schaffhausen | 1.98% | 3.18% | 4.83% | 5.37% | 5.57% | 5.57% | 5.57% | 5.57% | 5.57% |
| SO, Solothurn | 3.48% | 4.97% | 6.97% | 7.64% | 7.84% | 7.84% | 7.84% | 7.84% | 7.84% |
| SZ, Schwyz | 1.14% | 2.15% | 5.26% | 7.77% | 9.55% | 9.55% | 9.55% | 9.55% | 9.55% |
| TG, Frauenfeld | 6.23% | 6.61% | 7.63% | 8.17% | 8.37% | 8.37% | 8.37% | 8.37% | 8.37% |
| TI, Bellinzona | 4.02% | 4.40% | 5.42% | 7.10% | 8.09% | 8.09% | 8.09% | 8.09% | 8.09% |
| UR, Altdorf | 3.87% | 4.24% | 5.27% | 5.81% | 6.00% | 6.00% | 6.00% | 6.00% | 6.00% |
| VD, Lausanne | 3.34% | 4.59% | 6.95% | 8.39% | 9.06% | 9.30% | 9.44% | 9.49% | 9.51% |
| VS, Sion | 4.36% | 4.74% | 6.13% | 8.78% | 10.30% | 10.30% | 10.30% | 10.30% | 10.30% |
| ZG, Zug | 1.77% | 2.81% | 4.60% | 5.76% | 6.28% | 6.43% | 6.53% | 6.56% | 6.58% |
| ZH, Zürich | 4.50% | 4.88% | 5.90% | 7.16% | 11.16% | 15.77% | 22.04% | 26.22% | 28.36% |
Assumption: Payment at age 65, single man, no religion. Source: Tax data from the federal tax calculator
How is the withdrawal of pension assets taxed?
As you can see in the table above, capital withdrawal tax varies widely by canton. However, there are also similarities:
- If you withdraw funds from vested benefits, 2nd pillar, or pillar 3a in the same year, these are added together and taxed jointly. Payments to spouses or persons in a registered partnership are also usually taxed jointly.
- The capital withdrawal tax is taxed separately from other income. The money paid out from the pension fund or pillar 3a is therefore not added to taxable income. It is taxed separately as capital.
- The social deductions that are otherwise granted when calculating taxable income do not apply to capital benefits.
Optimize capital withdrawal taxes from the 2nd pillar and pillar 3a
Staggered withdrawal
If you withdraw capital from your pension fund, vested benefits, or pillar 3 in a single year, you will pay more tax than if you stagger the withdrawals over several years. Even if you have several pillar 3a accounts, you should plan your withdrawals to optimize your tax situation.
Repayments of WEF advance withdrawals: paid capital withdrawal tax can be reclaimed
The capital withdrawal tax also applies to WEF (home ownership promotion) withdrawals. You can reclaim this tax on the advance WEF withdrawal if you repay it into the pension fund.
Important to note: You must apply for the refund within three years. After that, the right to a refund expires.
There is no provision for automatic refunds. You must therefore take the initiative yourself.
Should I invest the pillar 3a money after withdrawal?
Instead of parking your savings in a savings account, you can also invest them, for example, with finpension Invest. Our withdrawal plan allows you to use the invested capital to pay yourself a pension.
It is important to remember that investing always involves risk. Therefore, you should assess your risk tolerance before making any investment decisions. Additionally, consider the duration of your investment horizon.
Different calculation methods of the cantons
There are 4 different methods for calculating the capital withdrawal tax.
To calculate the effective tax amount, the simple tax determined with the tax rate must be multiplied by the municipal and cantonal tax rate (see calculation examples).
Various cantons have additional guidelines in the form of minimum or maximum tax rates (AR, AI, BL, GR, LU, NE, NW, SZ, TI, VS, ZG, and ZH). Partly tax-free amounts are also granted (AG, BE, BS, FR, GR, VS).
4 calculation methods at a glance
The 4 calculation methods for the simple tax are as follows:
Proportional to income tax rate (Swiss Confederation, AG, AI, GE, NE, NW, OW, SH, SO, VD, and ZG): The capital withdrawal tax is a fraction of the tax that should have been paid on a corresponding income. Either one takes a fraction of the tax rate or the theoretical income tax. Both ways lead to the same result, a reduced capital withdrawal tax.
Taxation according to the “Rentensatz” (GR, SZ, TI, VS, and ZH): This model is based on the income tax rate as well. However, the calculation is more complex. First, we look at how high a corresponding annual pension payment would be* if the retirement assets were withdrawn in pension form. With the pension amount determined in this way, the tax rate can be determined based on the income tax rate. This tax rate is then multiplied by the total capital withdrawal.
Own tax rate for capital withdrawal (AR, BE, BL, BS, JU, LU, and ZG):
A separate tax rate – also known as a staggered rate – is applied specifically for capital withdrawal. This rate is not dependent on the income tax rate and is listed separately in the tax law.
Fixed percentage for capital withdrawal (GL, SG, TG, and UR): After all, there are cantons that like things to be simple. They apply a fixed tax rate, which is payable on the entire capital payment. Regardless of the amount paid out, the tax rate is always exactly the same. The only reason that the tax rate in the comparison table also increases in these cantons with the increasing amount of capital withdrawal is the federal tax, which is not flat but progressive. However, this is substantially less than in other cantons.
*The pension conversion rate varies from canton to canton. Ticino and Valais use tables to convert lump-sum payments into life-long pensions. As there are different retirement ages for women and men, gender is also a determining factor in calculating the tax in these cantons.
Sample calculation: Proportional tax tariff for income
To illustrate this, let’s take the example of Mrs. Müller, single, non-denominational and resident in the municipality of Lausanne VD. She would like to withdraw her pillar 3a of CHF 250,000.
- The canton of Vaud taxes capital benefits from the pension plan at one-fifth the income tax rate.
- The tax rate for an income of CHF 250,000 is 1.532 percent. One-fifth of this is 2.3064 percent. Multiplied by CHF 250,000, this results in a simple tax of CHF 5,766.
- The canton of Vaud has a tax rate of 155; multiplied by the simple tax, this results in a cantonal tax of CHF 8,937.
- The tax rate of the municipality of Lausanne VD is 78.5, multiplied by the simple tax, this results in a municipal tax of CHF 4,526.
- Add to that the federal tax of CHF 3,903.
- The capital withdrawal tax for Mrs. Müller thus amounts to CHF 17,366, corresponding to 6.95% of the pillar 3a withdrawal.
Sample calculation: Taxation according to the “Rentensatz”
Mr. Kälin, single, non-denominational, lives in the municipality of Schwyz SZ. His lump-sum withdrawal of CHF 250,000 is taxed at the pension rate.
The tax law of the Canton of Schwyz states: “Capital benefits are calculated at the tax rate that would apply if an annual benefit of 1/25 of the capital benefit were paid instead of the one-off payment.”
- 1/25 of CHF 250,000 is CHF 10,000.
- The income tax rate for 10,000 francs of income is 1.275 percent. This rate is now multiplied by the total lump-sum benefit.
- This results in a simple tax of CHF 3,187.50.
- The simple tax must in turn be multiplied by the tax rate. The tax rate is 290 percent of the simple tax. The cantonal tax therefore amounts to CHF 9,244.
- Together with the federal tax of CHF 3,909, this results in a total tax for Mr. Kälin of CHF 13,147 or 5.26 percent of the lump-sum withdrawal.
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