Do I have to pay tax on the pillar 3a when it is paid out? And what applies during the savings phase? In this article, we look at all the important facts about taxation of pillar 3a.
Contents
| Do I have to pay tax on pillar 3a? | |
| Tax advantages of pillar 3a during the savings phase | |
| Where do I have to declare the 3a payment in my tax return? | |
| Taxation of pillar 3a on payout |
Do I have to pay tax on pillar 3a?
The taxation of pillar 3a depends on whether you are still in the savings phase or whether you want to withdraw pillar 3a. The following applies: You only have to pay tax when you withdraw your pension. However, during the savings phase – i.e. before retirement – you benefit from various tax advantages.
Tax advantages of pillar 3a during the savings phase
Pillar 3a offers several tax advantages. The best-known advantage is that you can deduct 3a payments from your taxable income. Less well-known tax advantages of pillar 3a are
- No wealth tax: You do not have to declare the money saved in pillar 3a in your tax return. In contrast to assets in a savings account, pillar 3a assets are therefore tax-free.
- No tax on dividends and interest: As you do not have to declare pension assets in your tax return, dividends and interest earned under pillar 3a are not taxable. You must pay tax on dividends and interest as income in your free assets.
Detailed information and sample calculations on the tax savings of pillar 3a can be found in the linked article.
Where do I have to declare the 3a payment in my tax return?
To fully benefit from the significant tax advantages of pillar 3a, it is essential to declare your contributions on your tax return. Typically, there is a designated section for 3a contributions within the tax return form, although the title of this section may vary depending on your canton. Be sure to attach a payment confirmation from your provider to claim the deduction.
For example, in the Zurich online tax return, you will find the section under ‘Deductions’ and then ‘Pillar 3a and other types of pension provision’.
Important: You must only state your 3a payment in your tax return. This is because you do not have to pay tax on your pillar 3a assets. You therefore do not have to declare the 3a account.
Do you manage your pillar 3a with finpension? You can easily find the confirmation in the app under ‘Documents’ from the start of the year.
Taxation of pillar 3a on payout
A reduced tax is payable on the payment or withdrawal of pillar 3a. The so-called capital withdrawal tax is levied at federal, cantonal and municipal level. If you are not non-denominational, a tax is also levied for the church.
The capital withdrawal tax differs depending on the canton and the amount of the 3a withdrawal. The differences in tax rates are large, ranging from 1.3 % to 28.4 %.
| 50'000 | 100'000 | 250'000 | 500'000 | 1 Mio. | 2 Mio. | 5 Mio. | 10 Mio. | 20 Mio. | |
|---|---|---|---|---|---|---|---|---|---|
| AG, Aarau | 3.2% | 4.9% | 7.2% | 8.3% | 8.8% | 9.0% | 9.1% | 9.1% | 9.1% |
| AI, Appenzell | 2.4% | 3.3% | 4.6% | 5.2% | 5.3% | 5.3% | 5.3% | 5.3% | 5.3% |
| AR, Herisau | 7.6% | 8.0% | 9.0% | 9.9% | 11.1% | 11.7% | 12.0% | 12.1% | 12.1% |
| BE, Bern | 3.6% | 4.7% | 6.6% | 8.4% | 9.7% | 10.5% | 11.1% | 11.2% | 11.3% |
| BL, Liestal | 3.5% | 3.9% | 4.9% | 6.7% | 9.6% | 9.7% | 9.7% | 9.7% | 9.7% |
| BS, Basel | 3.7% | 5.3% | 8.3% | 9.5% | 10.0% | 10.1% | 10.2% | 10.3% | 10.3% |
| FR, Fribourg | 2.0% | 3.3% | 7.0% | 9.3% | 10.4% | 10.9% | 11.1% | 11.2% | 11.3% |
| GE, Genève | 2.9% | 4.6% | 6.7% | 7.8% | 8.5% | 8.7% | 8.9% | 8.9% | 9.0% |
| GL, Glarus | 4.8% | 5.2% | 6.2% | 6.7% | 6.9% | 6.9% | 6.9% | 6.9% | 6.9% |
| GR, Chur | 2.9% | 3.2% | 4.3% | 5.7% | 5.9% | 5.9% | 5.9% | 5.9% | 5.9% |
| JU, Delémont | 5.4% | 6.2% | 8.6% | 9.7% | 10.1% | 10.2% | 10.3% | 10.3% | 10.4% |
| LU, Luzern | 3.8% | 5.1% | 7.0% | 8.0% | 8.4% | 8.5% | 8.5% | 8.5% | 8.5% |
| NE, Neuchâtel | 4.9% | 5.7% | 7.9% | 8.5% | 8.8% | 8.8% | 8.9% | 8.9% | 8.9% |
| NW, Stans | 2.7% | 3.7% | 5.0% | 5.6% | 5.7% | 5.7% | 5.7% | 5.7% | 5.7% |
| OW, Sarnen | 5.4% | 5.8% | 6.8% | 7.3% | 7.5% | 7.5% | 7.5% | 7.5% | 7.5% |
| SG, St. Gallen | 5.5% | 5.9% | 6.9% | 7.5% | 7.6% | 7.6% | 7.6% | 7.6% | 7.6% |
| SH, Schaffhausen | 2.1% | 3.3% | 5.0% | 5.5% | 5.7% | 5.7% | 5.7% | 5.7% | 5.7% |
| SO, Solothurn | 3.5% | 5.0% | 7.0% | 7.7% | 7.8% | 7.8% | 7.8% | 7.8% | 7.8% |
| SZ, Schwyz | 1.3% | 2.4% | 5.7% | 8.5% | 10.4% | 10.4% | 10.4% | 10.4% | 10.4% |
| TG, Frauenfeld | 6.2% | 6.6% | 7.7% | 8.2% | 8.4% | 8.4% | 8.4% | 8.4% | 8.4% |
| TI, Bellinzona | 4.0% | 4.4% | 5.4% | 7.3% | 8.1% | 8.1% | 8.1% | 8.1% | 8.1% |
| UR, Altdorf | 3.9% | 4.3% | 5.3% | 5.8% | 6.0% | 6.0% | 6.0% | 6.0% | 6.0% |
| VD, Lausanne | 3.4% | 4.6% | 7.0% | 8.4% | 9.1% | 9.3% | 9.4% | 9.5% | 9.5% |
| VS, Sion | 4.4% | 4.8% | 6.3% | 9.1% | 10.3% | 10.3% | 10.3% | 10.3% | 10.3% |
| ZG, Zug | 1.8% | 2.9% | 4.6% | 5.8% | 6.3% | 6.4% | 6.5% | 6.6% | 6.6% |
| ZH, Zürich | 4.5% | 4.9% | 5.9% | 7.2% | 11.2% | 15.8% | 22.0% | 26.2% | 28.4% |
– Assumption: payment at the age of 65, single man, non-denominational
– Source: Tax data from the federal tax calculator
Tax optimisation strategies
Taxes on pillar 3a withdrawals can be optimised. This is because the capital withdrawal tax is progressive, i.e. it increases not only in Swiss francs but also as a percentage as the amount withdrawn increases. This tax progression can be broken with a little planning:
- Make staggered withdrawals: Spread your pillar 3a withdrawals over different years. Pillar 3a can be withdrawn as early as five years before reaching the normal retirement age. If you work beyond the normal retirement age, you can defer your 3a withdrawal for a maximum of five years. In the best case scenario, you will therefore have 11 years available for the staggered withdrawal. Make sure that you also plan for the pension fund withdrawal. This is because lump-sum withdrawals from the pension fund and pillar 3a are added together for tax purposes.
- Pay into several 3a accounts: You can only withdraw a 3a account as a whole. To be able to make staggered withdrawals, you must therefore pay into several 3a accounts. How many 3a accounts make sense depends on your canton of residence. The reason for this is the different tax progression depending on the canton.
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