Your revenue is not your profit. That's the most important lesson for every self-employed person in Switzerland. If you bill CHF 10,000.00 a month, considerably less remains than you think — after AHV contributions, materials, insurance and taxes. Calculating your net profit means knowing the real number that matters: what actually stays in your account.

The basic formula is: Net profit = Net revenue − operating expenses − depreciation. Sounds simple. But in Switzerland, AHV contributions (10.1%), health insurance, Pillar 3a and MWST (Swiss VAT) specifics come into play. In this guide, I'll show you step by step how to calculate your net profit correctly — with real CHF examples and Swiss deductions.

The Essentials at a Glance

• Net profit = Net revenue − operating expenses − depreciation — don't confuse it with revenue!
• AHV contributions: 10.1% of AHV-liable income (2026), payments to the compensation office are mandatory
• Typical profit margin for Swiss freelancers: 20–40%
• CHF 120,000.00 in revenue can yield only CHF 45,000.00–55,000.00 net profit after all deductions
• Profit margin = net profit ÷ revenue × 100 — measure it regularly

Calculating Net Profit: The Basic Formula

Net profit is what remains after all business expenses. The formula:

Net profit = Net revenue − all operating expenses − depreciation

Net revenue means: your invoiced amounts without MWST. The MWST doesn't belong to you — you pass it on to the ESTV (Federal Tax Administration). Anyone who includes MWST in revenue overstates their profit by 8.1%.

Operating expenses are all costs that are business-related: materials, software subscriptions, travel costs, insurance, AHV contributions, home office, phone, training. The principle under Swiss law: every franc you spend for business purposes reduces your profit and thus your tax burden.

Depreciation spreads the cost of long-lived assets (laptop, tools, vehicle) over several years. A CHF 3,000.00 laptop isn't fully deducted in year one but depreciated over 3 years at CHF 1,000.00 each.

Here's a simple example:

That's your monthly profit before income tax. The profit margin here is 68% — a healthy figure for a service business with low material costs.

Revenue vs Profit: The Most Important Difference

Many self-employed people confuse revenue and profit — and that can be expensive. Revenue is what you invoice. Profit is what's left. The gap can be dramatic.

Take Marco, a graphic designer from Bern. He generates CHF 8,000.00 in monthly revenue. That sounds like a very good income. But let's look closer:

• Net revenue (without MWST): CHF 7,399.00
• − AHV/IV/EO (10.1%): CHF 747.00
• − Software, stock photos, hosting: CHF 450.00
• − Health/accident insurance (business): CHF 180.00
• − Professional liability insurance: CHF 95.00
• − Travel costs & phone: CHF 200.00
• − Depreciation (laptop, camera): CHF 180.00
• − Flat-rate home office portion: CHF 150.00
• = Net profit: approx. CHF 5,397.00

From CHF 8,000.00 in revenue, CHF 5,397.00 in net profit remains. And from that, income tax, private health insurance and AHV maximization still come out. Marco thought he earned CHF 96,000.00 a year. His actual annual profit is about CHF 64,764.00. A difference of over CHF 30,000.00.

The rule of thumb: Revenue is not the same as money in your account. If you know your revenue but not your profit, you're flying blind. Clean bookkeeping basics help you keep both numbers in view at all times.

Swiss Deductions: What You Can Subtract from Revenue

Switzerland offers a range of deductions specifically relevant for self-employed people. If you don't use them, you pay too much tax and don't know your true profit. Here are the most important ones:

AHV/IV/EO contributions (10.1%): As a self-employed person, you pay the full social insurance contributions yourself. The rate in 2026 is 10.1% of AHV-liable income (AHV 8.7%, IV 1.4%). There's a minimum contribution of CHF 514.00 and a maximum of approx. CHF 2,640.00 per year. Exact amounts are available from the compensation office. These contributions are fully deductible.

Health and accident insurance: Premiums for your business health and accident insurance are deductible. If you've taken out daily sickness benefit insurance (KTG), those premiums are also deductible.

Professional liability insurance: Premiums for your professional liability insurance reduce your profit.

Retirement provision (Pillar 3a): Contributions to Pillar 3a are deductible up to CHF 7,056.00 (2026). This is one of the strongest tax deductions for self-employed people.

Pension fund: If you voluntarily join a pension fund, the contributions are deductible.

Business materials and software: Everything you buy for business purposes — from office supplies to software subscriptions to stock photos — is deductible.

Travel costs: Trips to clients, material procurement and business travel are deductible. Use the kilometre allowance of CHF 0.75 per kilometre for private vehicles.

Home office (private portion): If you work from home, you can deduct part of your housing costs: rent, heating, electricity, internet. The portion depends on the percentage of living space used commercially. At 15% of living space, with CHF 2,000.00 rent, that's about CHF 300.00 per month.

Depreciation: Long-lived assets are depreciated over their useful life. A laptop over 3 years, tools over 5–10 years, a business vehicle over 6 years.

Important: MWST is not an operating expense. It's a pass-through item. When you account for MWST as a freelancer, you pass output MWST on to the ESTV and get input tax back. Neither output MWST nor input tax flows into the profit calculation.

Calculating Net Profit: Practical Example with CHF Figures

Here's a complete annual example. Laura is a self-employed web designer in Zurich, working through her numbers for 2026:

Starting point:

• 12 client projects at CHF 10,000.00 net invoice amount each
• Additional maintenance contracts: CHF 12,000.00/year

Step 1 — Calculate net revenue: The invoices total CHF 132,000.00 gross (incl. 8.1% MWST = CHF 122,107.00 net). Net revenue — the amount without MWST — is CHF 122,107.00. Laura settles MWST separately via her MWST return.

Step 2 — Total operating expenses:

Step 3 — Depreciation: Laura's laptop (CHF 3,600.00, 3 years): CHF 1,200.00/year Workspace furnishing (CHF 4,500.00, 5 years): CHF 900.00/year Total depreciation: CHF 2,100.00

Step 4 — Calculate net profit: CHF 122,107.00 (net revenue) − CHF 40,158.00 (operating expenses) − CHF 2,100.00 (depreciation) = CHF 79,849.00 net profit

Laura's profit margin: 79,849 ÷ 122,107 × 100 = 65.4%

That's a very healthy margin for a service business without high material costs. From this net profit, Laura now pays income tax (federal, cantonal, municipal) and applies further personal deductions.

Important: When Laura compiles her figures for her tax return documents, this exact net profit is the basis. The more precisely she records her operating expenses, the lower her taxable profit.

Calculating Profit Margin: How Profitable Are You Really?

The profit margin shows how much of every franc earned remains as profit.

Formula: Profit margin = (net profit ÷ revenue) × 100

For Laura: CHF 79,849.00 ÷ CHF 122,107.00 × 100 = 65.4%

Typical margins for Swiss freelancers:

Thomas, a carpenter from Lucerne, has a profit margin of 22% on CHF 95,000.00 annual revenue. His net profit: CHF 20,900.00. After analysing his numbers, he finds his material costs are too high. He negotiates better purchase prices and reduces waste. A year later, his margin is 28% — that's CHF 6,700.00 more net profit at the same revenue.

Knowing your profit margin is crucial. If you know your margin is 30%, you know: for CHF 1,000.00 more profit, you need CHF 3,333.00 more revenue. Or you cut costs by CHF 1,000.00. Both lead to the same result — but cost reduction is often faster to implement.

If you want to track your numbers systematically, invoicing software for the self-employed helps categorise revenue and expenses automatically. Magic Heidi shows you your current standing at any time — from CHF 25.00 per month, significantly cheaper than bexio.

Common Mistakes When Calculating Net Profit

In practice, I see the same mistakes over and over. They cost money — either through excessive taxes (forgotten deductions) or through wrong decisions (overestimated profit).

Mistake 1: Counting MWST as revenue. The most common error. Anyone who bills CHF 10,810.00 gross and records that as revenue overstates by 8.1%. The correct net revenue is CHF 10,000.00. MWST is a pass-through item, not a profit component.

Mistake 2: Forgetting private portions. If you work from a home office, you can deduct part of your housing, internet and phone costs. Many forget this and give away thousands of francs in deductions. The mileage log for private vehicles used for business is also often not kept.

Mistake 3: Forgetting AHV contributions. AHV contributions are a significant cost factor (10.1%). If you leave them out of your profit calculation, you overstate your profit considerably. But the contributions are also deductible — they reduce your taxable profit at the same time.

Mistake 4: No depreciation. Deducting a CHF 3,000.00 laptop entirely in year one is tempting. But the law requires spreading it over the useful life. Those who don't comply risk back assessments.

Mistake 5: Mixing one-off expenses with ongoing costs. A new laptop is a one-off expense; a software subscription is an ongoing cost. For monthly profit calculation, you must separate the two. Depreciation spreads the one-off expense; the subscription runs monthly.

Mistake 6: No clean separation of business/private. Mixing your business account with your personal account leads to chaos. Keep a separate business account — then you always know what's business and what's not. When you register as an Einzelfirma (sole proprietorship), this is recommended anyway.

FAQ: Calculating Net Profit