Pension fund and payslip: how the BVG deduction and the coordination deduction are calculated
The BVG deduction on your payslip is your monthly pension fund contribution. It's calculated on your coordinated salary, which is the part of your AHV salary that's left after the coordination deduction. The Federal Act on Occupational Retirement, Survivors' and Disability Pension Plans (BVG) requires employers to contribute at least as much in total as all their employees combined.
With the net-to-gross calculator, you can calculate the impact of salary deductions on your net salary.
Key points:
What is the BVG deduction?
Monthly pension fund contribution based on the coordinated salary
What is the coordination deduction?
Amount deducted from the AHV salary before calculating BVG contributions (2026: CHF 26,460)
Who pays the BVG contribution?
Employees and employers; in total, the employer contributes at least half
When do I become subject to BVG contributions?
From an annual salary of CHF 22,680 with the same employer (2026); savings contributions start on 1 January following your 24th birthday
How high are the contribution rates?
Graduated by age; statutory retirement credits range from 7 to 18% of the coordinated salary, with many funds offering higher rates
Where does the deduction appear on the payslip?
As the item «PK/BVG» or «Pensionskasse» in the deductions section
What is the BVG deduction on the payslip?
The BVG deduction on your payslip is the contribution you pay monthly into the pension fund. Pursuant to Art. 66 BVG, employers must contribute in total at least as much as all their employees combined; in practice, most funds split the contributions equally, and many employers voluntarily pay more. The pension fund forms the 2nd pillar of the Swiss three-pillar system and is designed, together with the AHV, to maintain your accustomed standard of living after retirement, or in the event of disability or death.
The Federal Social Insurance Office (FSIO / BSV) is responsible for legislation and also publishes the applicable threshold amounts. Pension funds are supervised by cantonal and regional BVG supervisory authorities as well as the Occupational Pension Supervisory Commission (OAK BV). The Federal Council generally adjusts the threshold amounts every two years, in parallel with increases in AHV pensions; the values for 2026 remain unchanged since 1 January 2025.
On the payslip, the deduction appears under the item «PK/BVG». The basis for calculation is not the full gross salary, but the coordinated salary. In principle, the decisive factor is the AHV salary (Art. 7 para. 2 BVG). The pension fund regulations may deviate from this and exclude specific salary components:
Expenses: Do not count as AHV salary and are therefore never subject to BVG contributions.
Occasional salary components: Overtime compensation or one-off bonuses are part of the AHV salary, but regulations may exclude them from the insured salary (Art. 3 BVV 2).
Salary above the upper limit: Under the statutory mandatory scheme, salary is only insured up to CHF 90,720 (2026). Extra-mandatory plans also insure higher salaries.
A practical example (extra-mandatory plan, 2026 figures): With a coordinated annual salary of CHF 80,920 and an employee contribution rate of 7.0%, the monthly PK/BVG deduction is CHF 472.05. This rate corresponds to an extra-mandatory pension fund plan and exceeds the statutory minimum rates. For an overview of further deductions on the payslip and the principles of accounting for SMEs, it is worth taking a closer look at the links between payroll and financial accounting.
What is the coordination deduction and why does it exist?
The coordination deduction prevents you from insuring the same portion of your salary twice: once under the AHV and again under the pension fund. Both social insurances cover part of retirement provision, and without this mechanism, the lower salary band would be doubly covered. As a result, the BVG deduction is lower than many employees expect based on their gross salary.
The coordinated salary is determined by a simple subtraction: annual AHV salary minus the coordination deduction. This remaining amount is the basis on which pension fund contributions are calculated.
Entry threshold: Annual salary of CHF 22,680 with the same employer; below this, no BVG obligation applies
Annual AHV salary: Decisive salary according to the AHV statement
Coordination deduction: Fixed amount of CHF 26,460 deducted before the BVG calculation
Coordinated salary: Annual AHV salary minus coordination deduction; at least CHF 3,780, up to a maximum of CHF 64,260 under the mandatory scheme
Upper limit: Annual salary of CHF 90,720; salary above this can only be insured under an extra-mandatory plan
The statutory coordination deduction has been CHF 26,460 since 2025. The currently applicable value can be found on bsv.admin.ch. Under the statutory mandatory BVG scheme, this amount applies regardless of the workload, which affects part-time workers structurally more than full-time employees with high incomes: someone earning CHF 30,000 only has a coordinated salary of CHF 3,540, which is rounded up to the statutory minimum of CHF 3,780. This effect was one of the central issues in discussions around the BVG reform.
Some pension funds mitigate this effect by adjusting the coordination deduction proportionally to the degree of employment for part-time staff. The BVG Substitute Occupational Benefit Institution, which provides a fallback for employers without their own pension fund solution, applies the statutory thresholds. The BVG reform, rejected at the ballot box on 22 September 2024, would have replaced the fixed coordination deduction with 20 per cent of the AHV salary and lowered the entry threshold to CHF 19,845, which would have significantly improved coverage, particularly for part-time workers and low-income earners.
How are BVG contribution rates graduated by age?
How much you and your employer contribute to the pension fund depends on your age: the older you are, the higher the rate. Art. 16 BVG defines the retirement credits, which represent the savings portion credited towards your retirement savings:
Age group | Retirement credit pursuant to Art. 16 BVG (as % of coordinated salary) |
|---|---|
25 to 34 years | 7% |
35 to 44 years | 10% |
45 to 54 years | 15% |
55 to 65 years | 18% |
The actual contribution is higher than the retirement credit because it also finances risk benefits in the event of death and disability, administrative costs, and the contribution to the guarantee fund. In the extra-mandatory regime, pension funds may also stipulate higher savings contributions. The following example shows the contribution rates of an extra-mandatory pension scheme, not the statutory minimum:
Age group | Employees | Employers |
|---|---|---|
25 to 34 years | 7.0% | 7.0% |
35 to 44 years | 10.0% | 10.0% |
45 to 54 years | 16.0% | 16.0% |
55 to 65 years | 19.0% | 19.0% |
Example of an extra-mandatory pension scheme, not the statutory minimum. Total contributions (both parties combined) here range from 14 to 38% of the insured salary.
For SME HR management, this means that under identical pension fund regulations, a 55-year-old team member entails significantly higher non-wage labour costs in percentage terms than a 28-year-old employee, as Art. 16 BVG mandates age-based graduation, and extra-mandatory plans typically maintain or amplify this progression.
Calculation example: Calculating the BVG deduction on the payslip
To calculate your BVG deduction yourself, you need three details: your annual AHV salary, the current coordination deduction, and your contribution rate based on age as set out in your pension fund regulations. The annual contribution is calculated by multiplying the coordinated annual salary by the contribution rate and dividing the result by 12. The following example is based on an extra-mandatory plan and the 2026 threshold values.
Step 1: Determine the annual AHV salary
What you do: Determine the relevant annual AHV salary, i.e. gross salary excluding expenses and components exempted by the pension fund regulations.
Sample value: CHF 107,380 gross salary; no excluded components, so CHF 107,380 annual AHV salary (simplified). Because the plan is extra-mandatory, the full salary is insured; under the purely mandatory scheme, it would be capped at CHF 90,720.
Step 2: Subtract the coordination deduction
What you do: Subtract the current coordination deduction from the annual AHV salary. You can find the applicable amount on bsv.admin.ch; in 2026, it is CHF 26,460.
Sample value: CHF 107,380 minus CHF 26,460 results in a coordinated annual salary of CHF 80,920.
Step 3: Determine the age category and contribution rate
What you do: Identify your age category and take the contribution rate from your pension fund regulations. Statutory retirement credits (7 to 18%) are the minimum; many plans offer higher rates.
Sample value: Age group 25 to 34 years, employee rate 7.0%, employer rate 7.0% (extra-mandatory plan).
Step 4: Calculate the annual and monthly contribution
What you do: Multiply the coordinated annual salary by the employee rate, then divide by 12. This yields the monthly deduction on your payslip. The employer contribution is calculated separately and does not appear as a deduction.
Sample value: CHF 80,920 × 7.0% = CHF 5,664.40 annual employee contribution; CHF 5,664.40 ÷ 12 = CHF 472.05 monthly deduction. The employer pays an additional CHF 472.05, bringing the total contribution to CHF 944.10 per month.
Automatically record BVG deductions in payroll
Anyone processing payroll for multiple employees must verify the coordination deduction, age brackets, and the split between employee and employer at every year-end and whenever threshold amounts change. Payroll accounting with nextesy covers AHV, ALV, BVG, and withholding tax, automatically calculating social security contributions such as the AHV. For SMEs without a dedicated payroll department, this means fewer manual forms and less recalculation.
