A voluntary buy-in into your pension fund lowers your taxable income in the year of payment – and thereby your tax bill. Because income tax is progressive, however, the amount saved per additional franc decreases the further you push your income down. This calculator shows you live how much tax a buy-in saves this year, from which amount you drop into a lower progression bracket, and how to stagger your entire buy-in potential ideally over several years to stay in the high marginal tax rate.
The buy-in is deducted from the top, most heavily taxed part of your income. The saving equals the buy-in times your marginal tax rate. If you push your taxable income down too much with a large one-off buy-in, you slip into lower progression brackets – each further franc then saves less. If you spread the buy-in over several years, each tranche stays in the high marginal tax rate, and you save more overall.
The curve shows how many francs of tax you save with the next CHF 1'000 of buy-in – from left (no buy-in, high marginal tax rate) to right (large buy-in, you have slipped into lower brackets). The vertical markers show exactly the amounts at which your remaining income drops into a lower progression bracket. Depending on the canton, the curve may also contain real bracket jumps.
After a buy-in, the pension capital may not be withdrawn as capital for three years (Art. 79b Abs. 3 BVG, BGE 142 II 399), otherwise the tax deduction is reversed. Therefore plan your staggering so that the last buy-in falls at least three years before the planned capital withdrawal.