Self-Employed After Retirement in Switzerland: AHV Allowance, Contributions, VAT and Taxes

If you work self-employed after reaching the reference age, you pay AHV/IV/EO (old-age, disability and income compensation insurance) only on income above the AHV allowance (Freibetrag / franchise) of CHF 16'800 a year (CHF 1'400 a month), and the allowance applies per activity. No unemployment insurance (ALV / AC) contributions are due. You can waive the allowance until December 31. VAT (MWST / TVA) only becomes due from CHF 100'000 in turnover.

Take Ruth, a fictional former fiduciary accountant from Winterthur. At 66, she is doing the bookkeeping for three former clients again.

She has known the work for decades, but before her first invoice she faces entirely new questions: Do I have to register somewhere? Do I still pay AHV as a pensioner? And is it worth paying in more voluntarily?

When it comes to working after retirement, the official fact sheets only get you halfway: they are accurate, but spread across many places and mostly written for employees. In ten minutes, this guide tells you what you pay as a self-employed pensioner, what you have to report and when waiving the AHV allowance pays off. On top of that, it covers VAT, taxes and a checklist to tick off.

We built Magic Heidi as Swiss freelancers for Swiss freelancers. If you want to send your first invoice today, here is the guide: create a QR invoice.

Key points at a glance

• The AHV allowance is CHF 16'800 a year. You only pay contributions on the part of your profit above it.
• If less than CHF 10'100 is left after the deduction, the lowest rate of 5.371% applies, but never more than the minimum contribution of CHF 530. With a profit of CHF 25'000, that comes to around CHF 440 a year.
• Even with a profit below CHF 16'800, you must be registered with your compensation office. The CHF 2'500 rule for side income does not apply on top of the allowance.
• You waive the allowance in writing by December 31 of the contribution year. It pays off mainly if you have contribution gaps or a low average income, and never if you already get the maximum pension.
• The VAT threshold of CHF 100'000 applies regardless of age. Your pension and your profit are taxed together, and you can deduct your AHV contributions.

As a pensioner, am I actually self-employed?

Whether you count as self-employed for AHV purposes is decided by the compensation office (Ausgleichskasse / caisse de compensation) case by case, and separately for each activity. Your age plays no role. What counts are the economic circumstances, not what the contract says.

According to AHV fact sheet 2.02, these points indicate self-employment:

• You operate under your own name and issue invoices on your own account.
• You bear the economic risk, for example if a client doesn't pay.
• You organise your work freely: you decide when, where and how you work.
• You work for several clients.

Be careful if you only have one client. If you only keep working for your former employer, you will generally be classed as employed. The client then settles AHV through your salary, and the rules for employees apply. What to watch out for with a single client is explained in our guide to false self-employment.

Do I have to register with the compensation office after retirement?

Yes. Compensation offices must register self-employed people past the reference age. And even if you forget: the tax authority reports your self-employed income to the cantonal compensation office on its own initiative. It reports the income without deducting the allowance; the compensation office applies the allowance itself.

There are two starting points:

• You were already self-employed before the reference age. Nothing changes about your registration; your compensation office simply keeps you on file. You only have to decide whether to use the allowance or waive it.
• You start only after retirement. Then you register your activity with the compensation office of your canton. The individual steps and documents are in our guide to registering with the AHV.

Myth: “Under CHF 2'500, I don't have to report anything.” Many people know this rule from side income: if you earn no more than CHF 2'500 a year from a secondary activity, contributions are only collected on request. For pensioners, it does not apply on top of the allowance. After the reference age, the CHF 16'800 allowance is the relief for small incomes. We explain the CHF 2'500 rule for people working before the reference age in our guide to self-employment as a side job.

The CHF 16'800 AHV allowance explained

How much is the AHV allowance and what does it cover?

If you keep working after the reference age, you continue to pay AHV, IV and EO. But contributions are only due on the part of your income that exceeds CHF 16'800 a year. For employees, the AHV allowance applies per employer and is equivalent to CHF 1'400 a month.

If you also have a job alongside your self-employed activity, you get a separate allowance for each activity. You also decide on waiving it per activity. There is no separate allowance per client, though: what counts is your total self-employed income, as reported by the tax authority.

The first year: only a pro-rata allowance

In the year you reach the reference age, the allowance only applies from the following month and only to income you earn from then on. The compensation office therefore splits your annual income into before and after the reference age. If you start or stop your activity during the year, the allowance is reduced by months. Part months count as full months.

Imagine Brigitte, a fictional translator born on March 2, 1962. She reaches the reference age on September 2, 2026 and starts taking on assignments on her own account on December 1, 2026.

For 2026, she only gets an allowance for December, i.e. CHF 16'800 / 12 = CHF 1'400. From 2027, she has the full allowance, provided she works the whole year.

For women in the transitional birth years, the AHV 21 reform raises the reference age to 65 step by step:

For men, it is 65 regardless of year of birth.

Tax-free income after retirement? Contribution-free does not mean tax-free

Many people search for "tax-free income after retirement" and end up at the allowance. That is a misunderstanding. The CHF 16'800 is free of AHV/IV/EO contributions, but not of income tax. Your entire profit goes into your tax return, including the part below the allowance.

AHV contributions after retirement: what you pay above the allowance

On the part above the allowance, the compensation office applies the sliding contribution scale. It starts at 5.371% and reaches the full rate of 10% from CHF 60'500. If less than CHF 10'100 remains after deducting the allowance, you pay 5.371% on that remainder, but no more than the minimum contribution. In that case, you don't owe the CHF 530 minimum contribution.

Here is how it works for three typical profits (a full calendar year after the reference age):

Simplified, for a profit before deducting AHV contributions. The compensation office starts from the income in the tax report. It deducts the interest on equity invested in the business and the allowance, and adds back AHV contributions already deducted as an expense. Actual contributions may therefore differ slightly. Administration charges of up to 5% of contributions come on top.

Back to Ruth. With a profit of CHF 25'000, she pays around CHF 440 a year instead of CHF 1'404 without the allowance. Since she already receives the maximum pension thanks to a full contribution record and a high average income, waiving it would bring her nothing. She keeps the allowance and saves just under CHF 1'000 a year.

Don't forget the contributions on account. During the year, you pay provisional contributions on account (Akontobeiträge / acomptes) based on your expected income. They are due quarterly, no later than the 10th day after the end of the quarter.

The final contributions follow after the tax assessment. If your income changes significantly, tell your compensation office, or you risk late-payment interest of 5% a year.

You'll find the full contribution scale with every band in our guide to AHV contributions for the self-employed.

Keep or waive the AHV allowance? How to improve your pension

What has changed since 2024

Until the end of 2023, contributions after retirement age had no effect on your pension. Since the AHV 21 reform (in force since January 1, 2024), they can increase it.

To benefit, you apply for a recalculation of your old-age pension. You can do this exactly once.

The recalculation takes into account contribution-liable income from the month after the reference age up to your 70th birthday at the latest. For women born in or before 1963, the limit is five years after the reference age.

The new pension only applies to future payments; nothing is paid retroactively. And it can never be higher than the maximum pension of its scale.

When waiving the allowance pays off

Waiving the allowance costs real money every year, between around CHF 640 and CHF 1'390 in our examples. It only pays off in two cases:

1. You have contribution gaps (partial pension). A year after the reference age counts as an additional contribution year if two conditions are met. Your earned income that year amounts to at least 40% of your average earned income at the reference age (undivided, not revalued and excluding parenting or care credits). And your contribution reaches at least the minimum contribution of CHF 530 (2026).
2. Your average income is below the maximum. Then extra contributions can make some difference even with a full contribution record. In the official AHV example, the pension of a woman on scale 44 rises from CHF 2'038 to CHF 2'117 a month. She kept working after the reference age, earned CHF 2'600 a month and waived the allowance.

Waiving never pays off if you already receive the maximum pension, i.e. scale 44 and an average income of at least CHF 90'720. That is Ruth's case.

An important detail about the 40% rule: the comparison counts your total income, including the part below the allowance. But only income on which you paid contributions goes into the new pension. That's why the second condition is often the deciding one. In our simplified calculation (profit before AHV contributions), with the allowance you only reach the CHF 530 minimum contribution from a profit of around CHF 26'700.

Take Marco, a fictional graphic designer who came to Switzerland at 30. That's why he is missing contribution years and receives a partial pension. His average earned income at the reference age is CHF 50'000, so the 40% threshold is CHF 20'000. As a self-employed person, he makes a profit of CHF 22'000 a year.

• With the allowance, Marco pays 5.371% on CHF 5'200, i.e. CHF 279.29. That is less than CHF 530, so the year does not fill a gap.
• If he waives it, he pays 5.494% on CHF 22'000, i.e. CHF 1'208.68. Both conditions are met, and the year counts as an additional contribution year.

Marco therefore pays around CHF 930 more a year. In return, after the recalculation he can receive a higher pension for life. Before deciding, he asks his compensation office for a pension forecast (Rentenvorausberechnung / calcul anticipé de la rente) that takes his continued work into account. We recommend you do the same.

How to waive it as a self-employed person

• Deadline: Notify your compensation office of the waiver by December 31 of the contribution year.
• Form: in writing. The SVA Basel-Landschaft, for example, lists post, email or its connect portal. Ask your own compensation office which channel it prefers.
• Rolls over: Your choice carries over automatically to the next year, unless you report something different by December 31.
• Cannot be changed: After December 31, you can no longer change your choice for that year, not even if the tax authority later reports a higher income.
• Exception: If you are registered retroactively, you can declare the waiver until the deadline for objecting to the contribution ruling expires.

For comparison: employees notify their employer of the waiver no later than the first salary payment after the reference age, and in later years no later than the first salary of the year. If you accept a payslip that applies the allowance, you have agreed to it.

Recalculation or deferral?

These are two different things. With a deferral, you draw your AHV pension later and get an increase in return: 5.2% after one year, 10.8% after two, 17.1% after three, 24.0% after four and 31.5% after five years. You must register the deferral no later than one year after reaching the reference age. If you are planning partial retirement, you can also defer just part of it, namely 20 to 80% of the pension (details in fact sheet 3.04).

If you start drawing a deferred pension, it is not recalculated automatically. You always apply for the recalculation separately, with form 318.383, at the compensation office that pays your pension, ideally three to four months in advance. Everything about the recalculation is in fact sheet 3.08.

Write invoices and compare your profit with the allowance

You can only tell whether you are below or above the AHV allowance if you know your profit as you go. This is exactly where a simple invoicing program helps. Here's how to go about it:

1. Invoice every assignment properly. With Magic Heidi, you write invoices with a QR code. As long as you are not registered for VAT, you issue your invoices without VAT.
2. Record expenses as you go. Software subscriptions, travel costs or specialist literature reduce your profit and therefore also your AHV base.
3. Compare your profit with CHF 16'800. Magic Heidi shows you revenue, expenses and profit for the current year. You compare this profit with the allowance yourself. Also add this year's invoices that haven't been paid yet, so you don't underestimate your profit. If it is below the allowance, you pay no contributions (unless you have waived it). If it is above, use the table above to work out roughly what to expect.
4. Adjust your contributions on account. If your expected profit differs significantly from what the compensation office assumed, report the new figure. Your profit to date, together with your still-open invoices, is a good basis for this.
5. Decide before December 31. With the year's profit in front of you, choosing between keeping and waiving the allowance is easier.
6. Export the figures for your tax return. At the end of the year, export your revenue, expenses by category and profit as an Excel file.

Want to keep an eye on your profit from your first invoice? Try our invoicing software for the self-employed on your next assignment.

VAT: does the CHF 100'000 threshold also apply to pensioners?

Yes, unchanged. According to the Federal Tax Administration (ESTV / AFC), you become liable for VAT from CHF 100'000 in annual turnover from supplies in Switzerland and abroad that are not exempt from the tax. Your age plays no role.

You may only count the turnover from your assignments. Your AHV pension and your pension-fund pension are not consideration for a supply to clients and are not included. Most pensioners with a few mandates therefore stay well below the threshold. If you want, you can also register voluntarily, at the earliest from the start of a tax period.

When that pays off and how registration works is explained on our pages on VAT for freelancers and VAT registration.

Taxes on your pension and side income

Everything comes together in your tax return: your self-employed profit, your AHV pension and your pension-fund pension. All three are taxable income. The personal AHV/IV/EO contributions you pay on your profit, on the other hand, are deductible.

Because the incomes are added together, your profit is taxed at the rate of your total income. Extra earnings of CHF 25'000 therefore often cost more tax than you'd expect. Our guide to tax progression in Switzerland shows how this works. Which business expenses you can deduct is covered in our overview of tax deductions.

Our advice: from your first invoice, set aside part of every payment you receive for taxes and AHV. You'll find your canton's forms and deadlines in our overview of tax returns by canton.

Pension provision and insurance after 65

• No unemployment insurance (ALV): Self-employed people are not insured against unemployment, and after the reference age the obligation to pay ALV contributions also ends for employees.
• No mandatory occupational pension (BVG / LPP): As a self-employed person, you are not covered by mandatory occupational pension provision. What is possible on a voluntary basis is explained in our guide to a pension fund for your sole proprietorship.
• No mandatory accident insurance: Check whether your health insurance covers accidents. More on this in our guide to accident insurance for the self-employed.
• Pillar 3a: As long as you are gainfully employed, you can pay into Pillar 3a for up to five years past the reference age. Without a pension fund, the "large" 3a applies: 20% of earned income, at most CHF 36'288 (2026). With a pension fund, it is CHF 7'258.

Checklist: self-employed after retirement

1. Check whether you count as self-employed for AHV purposes (several clients, your own risk, your own invoices).
2. Register your activity with the compensation office, or, if you are already self-employed, simply carry on.
3. Decide by December 31: keep the allowance or waive it in writing.
4. Before that, ask for a pension forecast if you have gaps or are below the maximum pension.
5. Report your expected profit for the contributions on account and adjust it if it changes significantly.
6. Issue invoices without VAT as long as your turnover stays below CHF 100'000.
7. Record receipts and profit as you go and put something aside for taxes and AHV.
8. If needed, apply for the recalculation of your pension with form 318.383.

Conclusion: know the AHV allowance and decide deliberately

Being self-employed after retirement is simpler than all those fact sheets suggest. Three things to take away:

• The CHF 16'800 AHV allowance protects small incomes. You still have to be registered with your compensation office.
• Waiving it by December 31 costs money every year. It pays off if you have gaps or an average income below the maximum, and never if you already get the maximum pension.
• VAT only becomes due from CHF 100'000 in turnover, whereas income tax applies to your entire profit.

Like Ruth and Marco, what you need most is one number: your profit. Write your first invoice in Magic Heidi and keep comparing your annual profit with the CHF 16'800. That way, you make your allowance decision before December 31 with real figures instead of a gut feeling.

This guide does not replace professional advice. Your compensation office is responsible for your personal pension calculation.