AHV Contributions: How much do people who are not part of the workforce pay?
Even people who are not part of the workforce have to pay AHV contributions from 1st January after reaching the age of 20 until they reach the normal retirement age. But how are the AHV contributions determined and who is not considered to be part of the workforce? We show how the AHV contributions are calculated for people who are not part of the workforce and what the minimum and maximum contributions are. A calculation example is provided below for illustrative purposes.
Calculation of AHV contributions of people who are not part of the workforce
The amount of the AHV contributions of people who are not part of the workforce is calculated using the following formula:
Source: Non-gainfully employed people's contributions to AHV, IV, and EO, issued by the AHV/IV information office in collaboration with the Federal Social Insurance Office.
Assets or pension income?
These values are considered assets or pension income:
- Assets are savings accounts, securities, real estate and assets for usufruct.
- Pension income are annuities and pensions, maintenance payments (excluding child support), child’s pensions such as disability pensions (IV), daily benefits and scholarships.
Minimum and maximum contributions
- The minimum AHV contribution is CHF 496 for assets below CHF 300,000.
- The maximum AHV contribution is CHF 24,800 for assets above CHF 8,450,000.
The following groups of people are not considered part of the workforce
- People who have retired early
- Recipients of disability pensions
- Recipients of daily sickness or accident benefits
- Travelers who have notified the authorities in their Swiss place of residence that they are away
- Unemployed people who have discontinued their insurance benefits
- Insured people with a very small level of employment (less than CHF 4,702 per year)
- Employed people who only work a very small amount are also not considered as part of the workforce. Specifically, if their AHV contributions combined with their employer's contributions amount to less than half of the contribution they would have to pay as someone who is not part of the workforce.
A divorced woman without dependent children who does not work has an unencumbered property worth CHF 800,000, and securities and credit balance worth CHF 200,000. She receives a monthly alimony of CHF 4,000 from her ex-husband.
Assets (800,000 + 200,000) + pensions (20 x 4,000 x 12)
= 1,000,000 + 960,000
= CHF 1,960,000
According to the contributions table for people who are not part of the workforce, this woman's annual AHV contribution is CHF 4,220. The compensation offices additionally charge administrative cost contributions of a maximum of 5% of the contributions.
Old Age and Survivors' Insurance (AHV) contributions
This is what they are composed of
The AHV contributions are part of the social security deductions, which also include IV, EO, and ALV. These abbreviations stand for the following insurance policies:
- AHV - Old Age and Survivors' Insurance (Alters- und Hinterlassenenversicherung)
- IV - Federal Disability Insurance (Invalidenversicherung)
- EO - Income replacement scheme (Erwerbsersatzordnung) - military, civil service, and maternity
- ALV - Unemployment insurance (Arbeitslosenversicherung)
No ALV contributions are deducted for self-employed people, family members in agriculture, and working pensioners because they are not entitled to unemployment benefits.