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Salary as a Sole Proprietor: How Your Income Actually Works

One of the most common questions from newly self-employed people: 'How do I pay myself a salary?' The short answer: you don't. As the owner of a sole proprietorship, you have no salary — your business profit is automatically your income. But what does that mean in practice for your bookkeeping, your taxes and your bank account?

ER
Einzly Editorial
Tax & Finance Editorial
8 min read
5 Mar 2026
Related topics
Sole proprietorshipSalaryPrivate withdrawalBookkeeping

01Why you don't pay yourself a salary

In a sole proprietorship, there is no legal separation between you as a person and your business. You and your company are one. Therefore:

  • You are not an employee of your own company
  • You don't pay yourself a salary and don't issue a salary certificate
  • Your business profit (income minus expenses) flows directly into your taxable income
  • In your tax return, you declare this profit under 'Income from self-employment'
The key difference to a GmbH (LLC)With a GmbH or AG, you are an employee and pay yourself a salary with a salary certificate. With a sole proprietorship, this doesn't exist. Your profit = your income. No payslip, no social deductions on the 'salary' — instead you pay OASI directly on your profit.

02What is a private withdrawal?

When you transfer money from your business account to your personal account, this is called a private withdrawal. And here's the important point:

Private withdrawals are not an expenseWhen you transfer CHF 5,000 from your business account to your personal account, this is NOT a business expense. It is simply a transfer of your own money. You don't record this in your simple bookkeeping.

The same applies in reverse: if you deposit private money into the business account (private contribution), this is not business income.

TransactionBooking required?Why
Business account → Personal accountNoPrivate withdrawal, not an expense
Personal account → Business accountNoPrivate contribution, not income
Business expense paid from personal accountYesBusiness expense, even if paid privately
Private expense paid from business accountNoPrivate, doesn't belong in bookkeeping

Important: if you pay a business expense with your personal account (e.g. office supplies), you may and should still record it as a business expense. The receipt counts, not which account was debited.

03How much can you 'pay yourself'?

Theoretically, you can withdraw as much money from the business account as you like at any time — it's your money. But managing wisely means keeping reserves for:

  • OASI/DI/APG contributions: 10.6% of your profit (2026), paid directly to the compensation office
  • Income tax: Depending on canton and profit, 20–40% of taxable income
  • VAT: If you're subject to VAT, set aside the amount owed
  • Reserves: For weaker months, investments or unexpected expenses
Rule of thumb: set aside 30–40%With every payment received, immediately set aside 30–40% in a separate savings account. This covers OASI, taxes and VAT, so you won't have any nasty surprises at the end of the year.

04Concrete example: From revenue to income

Marco is a self-employed graphic designer in Bern. Here's how his year 2026 looks:

ItemAmount
Annual revenue (income)CHF 120,000
Business expenses– CHF 25,000
Business profit (= income)CHF 95,000
OASI/DI/APG (10.6%)– CHF 10,070
Pillar 3a (maximum without BVG)– CHF 36,288
Taxable income (approx.)CHF 48,642
Income tax (approx. 15%)– CHF 7,300
Net available (approx.)CHF 41,342

From CHF 120,000 revenue, Marco is left with around CHF 41,000 net — after all deductions, social insurance and taxes. In practice, he has about CHF 3,400 per month available to live on.

Don't forgetMarco must also pay his health insurance, accident insurance and any other insurance from this amount himself. As a self-employed person, no employer covers this for you.

05OASI contributions: The 'social contributions' of the self-employed

As an employee, you split the OASI contributions with the employer (5.3% each). As a self-employed person, you bear the full contribution alone — currently 10.6% on your net profit (minus personal contributions).

  • You register with the cantonal compensation office
  • During the year, you pay provisional contributions based on an estimate
  • After submitting your tax return, the final settlement is made — additional payment or refund
  • OASI contributions are a business expense and reduce your taxable profit
Record OASI contributions as an expenseRecord OASI/DI/APG contributions in einzly as a business expense under 'Insurance / Social insurance'. This reduces your business profit and thus your tax burden.

06What doesn't belong in your bookkeeping?

Since there is no separation between the company and the person in a sole proprietorship, certain things are not business transactions:

TransactionIn the bookkeeping?
Private withdrawal (money to personal account)No
Private contribution (money to business account)No
Rent for private apartmentNo (except home office share)
Private purchases from business accountNo
Pillar 3a contributionNo (tax deduction via tax return)
Health insurance premiumNo (tax deduction via tax return)
OASI contributionsYes — business expense
BVG contributions (voluntary)Yes — business expense
Common mistakeMany self-employed people record private withdrawals as expenses or Pillar 3a contributions in their bookkeeping. Both are wrong. Pillar 3a is claimed as a personal deduction in the tax return — not as a business expense.

07Tips for a healthy income

1
Separate business and personal accounts

Even though it's not legally required: a separate business account makes your bookkeeping clearer and makes the tax return much easier.

2
Set a monthly 'salary'

Transfer a fixed amount to your personal account every month. This creates predictability and prevents you from spending too much in good months.

3
Automate your tax reserve

Set up a standing order that automatically transfers 30–40% of every payment received to a tax savings account.

4
Review profit quarterly

Check every 3 months how your profit is developing. This allows you to react early — whether with savings measures or investments for tax optimisation.

08Frequently asked questions about salary in sole proprietorships

No. As the owner of a sole proprietorship, you don't pay yourself a salary. Your business profit is automatically your income. You don't issue a salary certificate and don't run payroll for yourself.
No. Transfers between business and personal accounts are neither income nor expenses. They are not recorded in simple bookkeeping (Milchbüechli).
Your income = revenue minus business expenses. From this profit, OASI contributions (10.6%), income taxes and any Pillar 3a contributions are deducted. What remains is your disposable income.
You declare the profit from your sole proprietorship in the 'Income from self-employment' form (often Form 9 or Appendix SE). The income-expense statement from einzly provides all the figures you need.
Record OASI/DI/APG contributions as a business expense in the 'Insurance / Social insurance' category. Pillar 3a, on the other hand, is NOT a business expense — it is claimed as a personal deduction in the tax return.
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