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SUISA remuneration is subject to AHV (pension) contributions

Copyright royalties paid out by SUISA are deemed as earned income from independent activities and therefore have to be taken into consideration for the Swiss Compensation Office (pension funds). That way, later claims and pension reductions at a later stage in life can be avoided. Text by Martin Korrodi

SUISA remuneration is subject to AHV (pension) contributions

Many musicians have several income streams. Copyright royalties paid out by SUISA are yet another income category. It is worth making retirement provisions and therefore to pay AHV contributions (pension scheme contributions) on the relevant income. (Photo: Crafft)

Introductory comment, supplemented on 9 June 2021: The information in this article is partially outdated. See SUISAblog for an up-to-date article “Are royalties subject to social security (AHV/AVS) contributions?”

All authors who receive remuneration from SUISA for the usage of their works have to declare it as income and pay taxes on it as well as settle the respective social security payment contributions with the pension funds. The remuneration paid out by SUISA is deemed as earned income from independent activities and are thus subject to AHV (pension) contributions.

If the income from independent activities within a year do not amount to more than CHF 2,300, the Compensation Office will only claim the amounts upon request (see info box at the end of the text). Nevertheless it is recommended that members settle smaller amounts, too: This helps to avoid potential contribution gaps which would lead to pension reductions at a later stage in life.

Especially in the case of freelance music creatives it is worth the effort to request a statement of account from the respective Compensation Office branch in order to discover any contribution gaps they might have. If these gaps have arisen over the last five years, the missing amounts can still be paid in.

The tax authorities notify the data in relation to the assessable income to the compensation offices. Based on this data, the Compensation Office can then determine that no AHV contributions were paid in relation to certain portions of the earned income. They can then claim the missing amounts retrospectively. In the case of such later claims, interest on arrears is due on top. It therefore is well worth while to notify the SUISA remuneration to the Compensation Office in good time and to pay the contributions.

AHV (pensions) – obligatory insurance for all

In the case of the federal retirement, death and disability insurance, insurance is mandatory for all persons who live in Switzerland or work in this country. All insured parties – with the exception of children – are obliged to pay in AHV contributions. In this case the yielded earned income usually acts as the basis for calculation.

In the case of earned income arising from employment this is the salary that the employer has paid out. In the case of self-employment, the amounts are due in relation to the income that has been yielded from self-organised entrepreneurial, operational or business activities.

The following directive can be used as a rule of thumb: AHV contributions must always be paid out on those amounts which you declare in your tax assessment as arising from an occupation. The situation is different regarding income such as revenue gained from capital investment or real estate which are – in terms of tax law – regarded as income but not as earned income in the sense of attracting an obligation to pay AHV contributions.

Copyright royalties are earned income

Not only the composition of commissioned music and stage appearances of performing artists but also the exploitation of rights are a type of occupation by means of which income is generated. As a consequence all authors who claim their rights vis-a-vis users and thus generate licence income are deemed to be self-employed.

This also applies in cases when you have assigned your rights for management to third parties – in this case, this is the norm in the area of non-theatrical music, via collective management by a collective management organisation such as SUISA. If you register with SUISA, you sign a rights administration agreement. With this agreement, members assign their rights to SUISA combined with the instruction to SUISA to carry out the rights management.

In such cases it does not matter, by the way, whether composers – whether as a fixed employee or via a one-off honorarium – have already been paid for the creation of the works and whether AHV contributions have already been paid on said type of income. The exploitation of the rights of your own works is an activity which is independent of the former and it leads to additional earned income. As such, it must be settled with the Compensation Office.

“Exemption limit” up to CHF 2,300 per calendar year

In the case of the exemption limit it is important to take into consideration that this amount includes all income from self-employed activities (cumulative). If SUISA income in a specific year were CHF 1,600 but additional income was generated from independent activities (whether as a main or subsidiary occupation) these types of income must be added to the amount above. If the final total lies above the tax exemption limit, AHV contributions must be paid out to the entire amount – including SUISA remuneration.

In the case of employees (those with a dependent occupation) the tax exemption limit shall also be applicable, but separately on a per-employment basis. If the respective salary is below the amount of CHF 2,300, the amounts will only be collected by request of theemployee. In such cases it is recommended to demand the statement, in particular on occasions when you have held several employments with minimal salaries. Certain employers in the creative sector are obliged to settle AHV contributions from the first CHF 1.00 of salary in order to protect the employees. These include dance and theatre producers, orchestras, audio and audiovisual producers, radio and TV as well as schools offering artistic educations.

If the income is made up of self-employed (independent) and non-self-employed (dependent) activities, the tax exemption limit is usually applicable on a per income category basis. The limit of CHF 2,300 applies for the total of all income from independent activities which includes SUISA remuneration. Salaries that have been paid to you as an employee do not have to be added since the income from dependent (employed) occupation can be regarded separately with respect to the exemption limit as described before.

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  1. Un.e musicien.ne qui n’a pas de statut d’indépendant, comment fait-il.elle pour déclarer ces revenus ? Est-il légalement possible de salarier ces revenus ? Ou est-ce que la SUISA pourrait salariés les musicien.ne.s qui le désirent ? Puisque c’est elle qui gère ces revenus pour eux.elles?

    • Merci pour votre question.
      Non, SUISA ne peut pas salarier les musicien-ne-s qui le désirent. La raison est que SUISA n’est pas l’employeur de ses membres, il n’y a pas de contrat de travail entre SUISA et ses membres. Les revenus versés par SUISA doivent dans tous les cas être déclarés par la ou le contribuable comme revenus d’une activité indépendante, cela en plus des revenus d’une éventuelle activité salariée.
      SUISA Communication

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Copyright royalties paid out by SUISA are deemed as earned income from independent activities and therefore have to be taken into consideration for the Swiss Compensation Office (pension funds). That way, later claims and pension reductions at a later stage in life can be avoided. Text by Martin Korrodi

SUISA remuneration is subject to AHV (pension) contributions

Many musicians have several income streams. Copyright royalties paid out by SUISA are yet another income category. It is worth making retirement provisions and therefore to pay AHV contributions (pension scheme contributions) on the relevant income. (Photo: Crafft)

Introductory comment, supplemented on 9 June 2021: The information in this article is partially outdated. See SUISAblog for an up-to-date article “Are royalties subject to social security (AHV/AVS) contributions?”

All authors who receive remuneration from SUISA for the usage of their works have to declare it as...read more

Career and calling | plus video

How do I found and run an ensemble for contemporary music? Where do I get subsidies for my music projects from? What is the purpose of SUISA and Swissperform? How do I distribute my works via the internet? Impressions gathered during the first ever “Journée d’orientation professionelle” at the Festival Archipel 2017. Text, photo and video by Manu Leuenberger

On Saturday, 01 April 2017, at the Festival Archipel in Geneva, it was possible to witness the reasons why music can be both career and calling. During the day, an information event took place for young music creators. Based on their wealth of expertise and experience, 12 field experts shared their input in presentations which included many tips on how to enter a career as a musician.

The video impressions only grant a glimpse into the expansive range of topics which were discussed. Further presentations during this first ever “Journée d’orientation professionelle”, the organisation of which was supported by SUISA, were given by: Johannes Knapp – Director of the STV/ASM (Association of Swiss Musicians), Damien Pousset – Founder of the Aeon label, François Passard (Director) und Alain Renaud (Head of the production studio) of L’Abri, Lucas Fagin – composer and co-director of Babelscores, Bruno Serrou – music critic and Marie-Christine Papillon – Director of Papillon publishing.

Career and calling | plus video

Inspiration and profession were also touched upon during the discussions with composers on 01 April 2017 at the Festival Archipel prior to the evening concert in the Alhambra. On the podium, on the far right: Xavier Dayer, President of the SUISA Board.

In the evening prior to the concert in the Alhambra, a public discussion with composers was held. Xavier Dayer, President of the SUISA Board, was also on the podium. The audience at the well attended event found out why copyright remuneration is particularly important for composers who do not receive any concert fees. Due to the copyright remuneration they receive for their work, composers such as Hanspeter Kyburz, William Blank or Tristan Murail can create works like the ones that were performed in the concert just after the discussion by the Lemanic Modern Ensemble.

www.archipel.org, festival website

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How do I found and run an ensemble for contemporary music? Where do I get subsidies for my music projects from? What is the purpose of SUISA and Swissperform? How do I distribute my works via the internet? Impressions gathered during the first ever “Journée d’orientation professionelle” at the Festival Archipel 2017. Text, photo and video by Manu Leuenberger

On Saturday, 01 April 2017, at the Festival Archipel in Geneva, it was possible to witness the reasons why music can be both career and calling. During the day, an information event took place for young music creators. Based on their wealth of expertise and experience, 12 field experts shared their input in presentations which included many tips on how to enter a career as a musician.

The video impressions only grant a glimpse...read more

In Gedenken an Erwin Ernst Kunz

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