AVS/LPP for independent workers
As a self-employed person in Switzerland, you are responsible for paying your own social security contributions. This guide covers the AVS (Old-Age and Survivors' Insurance — AHVG ↗), AI (Disability Insurance), APG (Income Replacement Allowance), and LPP (occupational pension — BVG ↗) — and how to record them in Gäld.
Your obligations as a Swiss freelancer
Unlike employees (where the employer pays half), self-employed people pay the full contribution on their net income. Contributions are mandatory from CHF 2,300 of annual net income.
You must register with a cantonal or professional compensation fund (AHV-Ausgleichskasse / Caisse de compensation) as soon as you start self-employed activity. The fund calculates your contributions based on your declared income.
For current rates and fund contact details, see the AHV/AVS information centre.
Contribution rates (2025)
| Insurance | Rate (self-employed) | Notes |
|---|---|---|
| AVS (Old-Age & Survivors) | 8.7% | On net income |
| AI (Disability) | 1.4% | On net income |
| APG (Income Replacement) | 0.5% | On net income |
| Total AVS/AI/APG | 10.6% | On net income |
| ALV (Unemployment) | Not applicable | Self-employed are exempt |
| LPP (Occupational pension) | Voluntary | Recommended if income is stable |
- Minimum contribution for AVS/AI/APG: CHF 514/year (even with minimal income)
- Maximum insured income: CHF 148,200/year (2025)
- Income above the maximum is not subject to additional AVS contributions but is still taxable
How contributions are calculated
Your compensation fund assesses contributions based on your net profit (income after deduction of business expenses but before social charges themselves — a circular formula that Swiss law resolves by applying a reduction factor).
Simplified formula:
Contribution base = Net profit ÷ 1.106
Example: Net profit CHF 80,000
Contribution base = 80,000 ÷ 1.106 = CHF 72,332
AVS/AI/APG contributions = 72,332 × 10.6% = CHF 7,667
The exact calculation involves your final tax return figures. Your compensation fund issues a provisional invoice during the year and a final adjustment after your tax return is processed.
LPP (occupational pension) for freelancers
LPP (the second pillar) is not mandatory for self-employed people, but is strongly recommended:
- Contributions are tax-deductible (up to CHF 35,280 for pillar 3a in 2025 for those without LPP)
- If you voluntarily join an LPP fund, you can deduct employer + employee shares
Many freelancers instead maximise their Pillar 3a contributions as an alternative.
Deadlines
| Event | Deadline |
|---|---|
| Register with compensation fund | Immediately upon starting self-employment |
| Pay provisional AVS invoices | As issued (usually quarterly) |
| Final tax return (used to adjust contributions) | Per cantonal deadline (typically March–May) |
| LPP / Pillar 3a contribution for deduction | 31 December of the tax year |
Recording social charges in Gäld
Recording AVS/AI/APG payments
When you receive and pay an AVS invoice:
- Go to Expenses → New Expense
- Category: Social Charges (5700)
- Amount: as per the invoice from your compensation fund
- Attach the invoice PDF
Or via journal entry:
Date: 2025-06-30
Description: AVS/AI/APG provisional contribution Q2 2025
Debit 5700 Social Charges CHF 1,917.00
Credit 1020 Bank CHF 1,917.00
Accruing social charges at year-end
Because the final AVS bill arrives after year-end, you should accrue an estimate at 31 December:
- Go to Accounting → Journal Entries → New
- Date: 31 December
- Entry:
Date: 2025-12-31
Description: Accrual — AVS/AI/APG final adjustment estimate
Debit 5700 Social Charges CHF 500.00
Credit 2050 Accrued Social Charges CHF 500.00
Reverse this entry in January when the final bill arrives.
Recording social charge accruals is part of the Year-End Checklist. Gäld will remind you during the year-end closing workflow.