Navigating the Path to Self-Employment in Switzerland

How Much Can You Bill Without Registering as an Independent Contractor?
A Comprehensive Guide for Swiss Freelancers and Aspiring Entrepreneurs

As the world of work continues to evolve, more and more professionals in Switzerland are considering the path of self-employment. Whether you're a seasoned freelancer or just starting to explore the idea of working for yourself, one of the most common questions you may have is how much you can bill without officially registering as self-employed.
This article aims to provide a comprehensive overview of the legal and financial aspects of self-employment in Switzerland, helping you make informed decisions about your career and business ventures.

1. Understanding the Differences Between Employees and Self-Employed Individuals

1.1 The Three Pillars of Social Security in Switzerland

  • 1st Pillar: State Pension (AHV/IV/EO)
  • 2nd Pillar: Occupational Pension (BVG/FZG/BVV 2)
  • 3rd Pillar: Private Pension (BVV 3/VVG)

1.2 Contribution Mechanisms for Employees and Self-Employed

  • Employees: Contributions deducted by the employer and paid to the compensation office along with the employer's share
  • Self-Employed: Contributions paid directly to the compensation office based on income subject to direct federal tax

1.3 Current Contribution Rates for Self-Employed (as of January 1, 2023)

  • Annual income of CHF 58,800 or more:
    • AHV: 8.1%
    • IV: 1.4%
    • EO: 0.5%
    • Total: 10.0%
  • Lower income levels: Varying rates down to 5.317% for an annual income of CHF 9,800
  • Minimum contribution amount: CHF 514

1.4 Optional Nature of 2nd Pillar Contributions for Self-Employed

  • Recommendation to consult with the Substitute Occupational Benefit Institution or the pension institution of your professional association

2. Situations Where Self-Employment May Not Be Necessary

2.1 The Federal Direct Tax Act (LIFD) and Its Implications

  • Taxation of all income, regardless of source or regularity
  • Applicable to both individuals and legal entities (companies, associations, foundations, self-employed)

2.2 Examples of Cases Where Self-Employment Registration May Not Be Required

  • Occasional babysitting for a single family
  • Freelancing with only one client
  • Musicians with infrequent performances and low income
  • Small-scale beekeepers selling less than 10kg of honey annually
  • Uber drivers (note: status not recognized by authorities; check with cantonal compensation offices for updates)

2.3 The Concept of Being Considered "Dependent" in These Situations

3. Criteria for Determining Self-Employment Status

3.1 Income Threshold for Mandatory Declaration as Self-Employed

  • Current threshold: CHF 2,300 per year (as of 2023)
  • Amounts below this threshold should be declared along with other income as a "dependent" individual on the same tax return

3.2 Other Factors Considered by Compensation Offices

  • Operating under a business name (e.g., registered in the commercial register or telephone directory, having a professional license, using letterhead and advertising materials, issuing invoices in your name, charging VAT)
  • Assuming economic risk (e.g., long-term investments, own means of production, taking on collection risk, paying rent for business premises)
  • Freely organizing your business (e.g., setting your own work schedule, organizing your work, outsourcing to third parties, choosing which jobs to take on, working outside of your private residence or using your own infrastructure)
  • Working for multiple clients (a single mandate is generally considered dependent employment)
  • Employing staff

3.3 Case-by-Case Assessment by Compensation Offices

  • Possibility of being self-employed in one activity and an employee in another
  • Importance of contacting the cantonal compensation office when exceeding the CHF 2,300 income threshold to determine if a new status is appropriate

4. The Process of Becoming Self-Employed in Switzerland

4.1 The Two Main Aspects of Starting Your Own Business

  • The enjoyable creation part: Defining your product, strategy, and target audience
  • The administrative part: Navigating legal requirements and obligations

4.2 Step-by-Step Guide to Becoming Self-Employed

  • Define your product, strategy, and target group
  • Determine your field of activity and identify your closest existing category if you're innovating
  • Choose a legal form and understand its advantages and disadvantages
  • Contact the compensation office to declare your activity and contribute to AHV (Swiss social security)
  • Consider VAT accounting if your annual income exceeds CHF 100,000 (optional below this threshold)
  • Understand applicable labor and tax laws and your obligations, especially if you plan to hire employees
  • Familiarize yourself with regulations specific to your profession, particularly for regulated fields like medicine or law
  • Be aware of the tax implications of your chosen legal form (e.g., sole proprietorship, where personal and business assets are combined)

4.3 Case Study: A Multimedia Production Company's Journey to Self-Employment

  • Entrepreneur creates a multimedia production company specializing in web programming and software development
  • Chooses sole proprietorship as the legal form and finances the startup phase with family funds
  • Registers the company in the commercial register to increase credibility and protect the business name, despite not being required due to an annual turnover below CHF 100,000
  • Applies for recognition as self-employed with the AHV authorities, which assess the request based on economic conditions
  • Considers joining the Substitute Occupational Benefit Institution or the pension institution of their professional association to address potential issues with the 2nd pillar if multiple separate income sources don't reach the minimum income limit
  • As a part-time sole proprietor, adds the company's profit to their salary income for tax purposes

5. Key Takeaways and Additional Resources

5.1 Recap of Main Points

  • Becoming self-employed in Switzerland requires meeting conditions such as having multiple clients and earning an income above CHF 2,300 per year
  • The cantonal compensation office assesses your situation based on economic criteria to determine your self-employment status
  • Self-employment is not always mandatory but involves administrative responsibilities in addition to your regular work
  • Consider transitioning to self-employment when your invoices exceed CHF 2,300

5.2 Additional Resources for Swiss Freelancers and Self-Employed Individuals

  • How to become self-employed and start your own business in the Canton of Vaud
  • Frequently asked questions about invoicing for Swiss freelancers
  • Top 5 Swiss invoicing programs for 2024
  • Understanding VAT regulations for self-employed individuals in Switzerland
  • Directory of billing software solutions for Swiss businesses
  • Guide to claiming expenses in your tax return as a self-employed professional
  • The ultimate guide to dropshipping for Swiss entrepreneurs
  • Essential accounting documents for self-employed individuals in Switzerland
  • How to handle travel expenses as a self-employed person in Switzerland
  • A comprehensive guide to sole proprietorship in Switzerland


Transitioning to self-employment in Switzerland is an exciting and challenging journey that requires careful consideration of legal, financial, and administrative aspects.
By understanding the threshold for mandatory self-employment registration, the criteria used by compensation offices to determine your status, and the steps involved in setting up your own business, you can make informed decisions and navigate the path to self-employment with confidence.
Remember to seek guidance from the cantonal compensation office when your income exceeds CHF 2,300 and to stay informed about your obligations as a self-employed individual.

We hope this comprehensive guide has provided you with valuable insights and wish you the best of luck in your entrepreneurial endeavors!