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Interactive calculator·10 min read·Last updated: 2026-05-29·Sole proprietors · Freelancers · Growing SMEs

Should I switch from sole proprietorship to GmbH? Calculator and guide

Enter estimated annual net profit, canton and salary/dividend strategy: compare indicative taxes, social contributions and admin costs between both forms.

Why simulate before forming a GmbH

Switching from sole proprietorship to GmbH is not a prestige decision: you need a numeric comparison between profit taxed as personal income (with social security on full profit) and profit taxed at corporate level (corporate tax + manager salary + optional dividends).

This calculator provides a theoretical estimate of total annual burden in both setups using indicative cantonal rates, simplified social contributions and adjustable admin costs. It does not replace fiduciary advice but shows orders of magnitude and breakeven.

Remember: limited liability, partners, bank credit and exit (share sale) are non-monetary benefits the calculator does not quantify — they may outweigh tax savings in high-risk or high-growth scenarios.

Calculator: sole proprietorship vs GmbH

Adjust parameters and compare estimated annual totals (taxes + contributions + accounting/admin). Verdict is indicative only.

Sole proprietorship

CHF 40’250

Estimated total annual burden

Annual difference

+CHF 7’426

Positive = GmbH cheaper overall. Negative = sole prop lighter.

Indicative breakeven around CHF 65’938 annual profit (current parameters).

Lower total cost

GmbH

CHF 32’824

Estimated total annual burden

GmbH likely worth exploring

With your inputs, estimated GmbH total burden is significantly lower. Deep-dive with a fiduciary on optimal salary, dividends and timing.

Your inputs

CHF
CHF 20’000CHF 1’000’000

Profit before personal or corporate tax, after operating costs.

40.0%

Estimated manager salary: CHF 48’000 / year

30.0%
Admin costs (advanced)

Simulation result

Sole proprietorshipCHF 40’250
GmbHCHF 32’824

Sole prop breakdown

Income tax (profit)CHF 26’330
Social contributions (indicative)CHF 12’720
Taxes + contributionsCHF 39’050
AccountingCHF 1’200

GmbH breakdown

Corporate profit taxCHF 11’682
Tax on manager salaryCHF 8’510
Contributions on salaryCHF 5’088
Additional tax on dividendsCHF 2’244
Taxes + contributionsCHF 27’524
Admin + accountingCHF 5’300

Indicative simulation using simplified models (average cantonal rates, 70% dividend inclusion, ~10.6% social up to CHF 148,200 base). Does not cover specific deductions, spouse income splitting, pillar 3a or capital gains. Consult a fiduciary before incorporation.

How the calculation works

The engine compares two parallel tax worlds on the same operating profit:

  • 1Sole prop: full profit taxed as personal income in the chosen canton; social contributions estimated on profit (~10.6% up to max base).
  • 2GmbH: part becomes manager salary (income tax + salary contributions); remainder subject to corporate tax (indicative 11–21% by canton).
  • 3Distributed dividends taxed with partial inclusion (70% in income if qualified holding) — adjustable slider.
  • 4Fixed GmbH costs and accounting difference are added — editable in advanced panel.
  • 5Breakeven found by numerical search until both totals match (CHF 500 tolerance).

Beyond tax: what the calculator does not measure

Even with zero tax savings, GmbH may still be right:

FactorSole propGmbH
LiabilityUnlimited personal assetsLimited to capital (unless guarantees)
Partners / investorsNot allowedTransferable shares
Bank / B2B credibilityLess asset separationDedicated company balance sheet
Exit / business saleGains often heavily taxedShare sale often more favourable
Setup costsLow or noneCHF 5,000–15,000 (notary, capital)

When GmbH is NOT (yet) worth it

The calculator may show savings, but be cautious if:

  • Profit below CHF 60,000–80,000

    Formation and annual admin costs absorb most tax benefit. Staying sole prop is often rational until profit grows.

  • Low-risk activity, no debt

    Without leasing, staff, critical suppliers or litigation risk, asset protection may not justify extra admin cost.

  • Planning a near-term business sale

    Conversion has cost and tax impact. Model capital gains and contribution in kind with your fiduciary first.

  • Spouse already in high tax bracket

    Joint taxation may penalise high salaries or dividends. Full family simulation required.

Decision mistakes

Looking only at corporate tax rate

Real benefit depends on salary/dividend/reserve mix. Low corporate rate does not help if everything is paid as max salary.

Forgetting social on full sole prop profit

Many compare only cantonal tax and ignore self-employed AVS on entire profit up to the contribution ceiling.

Forming GmbH without separating bank and books

Legal form changes but mixed accounts still risk FTA issues regardless of tax savings.

Converting in the wrong quarter

Year-end, VAT and contracts need planning. Rushed conversion can cost more than one year of savings.

6 practical tips

  • Re-run at profit −20% and +20%: sensitivity shows how much results depend on real turnover
  • Ask your fiduciary for an official simulation with your deductions, 3a and marital status
  • If savings are borderline but you have corporate clients or debt, GmbH may be worth it for liability alone
  • Plan conversion at year-end and migrate accounting without losing history (AccountEX handles sole prop → GmbH)
  • Do not distribute all profit: retaining reserves in GmbH can reduce total burden vs withdrawing everything as sole prop
  • Also compare professional liability insurance costs for the new entity

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