Practical considerations – “your invoicing is not your salary”

It is very important to realize that once you step off the corporate ladder the idea of a fixed regular salary is no longer applicable. You may have a regular income for a period of time of course, but a key idea is the fact that the amount that you invoice your clients is not your salary.

When a company employs you and pays you a salary the state imposes salary related taxes on the employer. For a quoted salary to you of CHF 10,000 per month the company will pay social security and make contributions to your pension fund. You do not receive the quoted CHF 10,000 either. The state imposes deductions from your side for social security and pension fund contributions.

When you work for yourself you are both your employer and employee and pay both sets of charges in one form or another.

Consequently to receive a salary of CHF 10,000 you need to invoice more than this amount to take into account the employer’s contributions. We would recommend adding at least 15% on.