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Processing payroll in Belgium is like painting a Rubens painting

Processing payroll in Belgium is like painting a Rubens painting

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Rubens is one of the most influential artists of all time. He lived in Antwerp, an economically vibrant city in Flanders, in the north of Belgium. He left a wealth of paintings we can admire in several museums up until today. Recently, the restored version of his self-portrait is to be admired in the master’s home and studio “The Rubens House” in Antwerp. Ever tried painting Rubens’ self-portrait? If so, you’ll agree that it’s not exactly a walk in the park.

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Which type of bonus is the best choice to reward your employees? Pro-Pay provides you with a short overview of both bonuses in this newsletter. Since a couple of years, employers can offer their employees a tax friendly non-recurring, result-related bonus, also referred to as CLA n° 90. Starting January 1 2018, the government has introduced a new kind of tax friendly bonus, called the profit participation bonus. It is noteworthy that both bonuses are not taken into account for the wage norm. You can grant these bonuses in other words also when the salary cost in your company cannot increase any further. The non-recurring result-related bonus Since a couple of years, employers in Belgium can grant their employees a bonus in the scope of the Act of December 21, 2007 and the collective labour agreement n° 90 (CLA n° 90). This benefit enjoys a favourable treatment when it comes to taxes and social security contributions. Thus the allocated benefit is not subject to withholding tax, is tax deductible as a business expense and is not taken into account for the calculation of the indemnity in lieu of notice and the holiday pay. It is however subject to a special employer’s contribution to the social security of 33% and a solidarity contribution of 13,07% for the employee. There are some conditions linked to the allocation of the benefit of which the most important ones are the following: The benefit cannot exceed a certain threshold: Social threshold = 3.313 EUR (amount 2018) per employee per calendar year. The amount is subject to a solidarity contribution of 13,07 % for the employee. Fiscal threshold = 2.880 EUR (amount 2018) which is exempt from taxes. The benefit must be related to collective results or objectives; The result or objectives must apply to a company, a group of companies or a well-defined group of employees; The results or objectives must be clearly outlined, transparent, determinable/measurable and verifiable. Examples of objectives are: achieving an actual turnover during the reference period, decreasing the error range, decrease the complaints from customers, obtaining an ISO-norm or another license … At the time of introducing the bonus plan, it should be uncertain whether the results or objectives will be achieved; The bonus plan should meet certain formalities such as drafting an act of adhesion or concluding a collective labour agreement. The new profit participation bonus The new bonus allows to grant the employees as from January 1, 2018 a tax friendly non-recurring profit participation bonus. For this type of bonus there are some conditions as well linked to the allocation of which you will find the most important ones here below: The company is subject to corporate taxes or to taxes for non-residents in Belgium; The allocation is only possible based on (part of the) profit; If the employer grants an identical amount or percentage to all employees, the only formality is a decision of the General Assembly and a written notification by the employer. If the employer wishes to grant different bonuses to different categories of employees, an act of adhesion or a collective labour agreement on company level will be required. This bonus is not a deductible cost for the employer. There are no social security contributions due from employer’s side. The employee on the other hand will pay a solidarity contribution of 13,07% and withholding taxes of 7%. The total amount of the bonuses may not exceed 30% of the total wage mass of the concerned fiscal year. Which bonus to offer to your employees? The best choice of bonus to grant to your employees, depends on what you wish to reward. Would you like to link the bonus to the achievement of certain goals or rather not? Would you like to reward all employees or just the one certain category? Of maybe you would like to combine both bonuses? Even that is possible. If your company is not subject in Belgium to corporate taxes or taxes for non-residents, the allocation of the new profit participation bonus is not possible. Introducing a non-recurring result-related bonus on the other hand is possible. Contact your Payroll Business Partner for further assistance.

The non-recurring, result-related bonus or the new profit participation bonus?

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Which type of bonus is the best choice to reward your employees? Pro-Pay provides you with a short overview of both bonuses in this newsletter.

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Belgian Public holidays in 2018

Belgian Public holidays in 2018

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As 2017 is gradually coming to an end, payroll provider Pro-Pay wants to give you an overview of the Belgian public holidays for the year 2018 and a reminder of the rules applicable to replacement days.

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Ecocheque green

Electronic ecocheques in 2016

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Belgian employers are permitted to give their employees 250 euros’ worth of ecocheques per year. Until the end of last year, the only option was paper ecocheques. As of 2016, employers also have the option of offering electronic ecocheques. Read more

Payroll Services in Belgium

How Payroll Services in Belgium Help You in Doing Business in Belgium

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Businesses, despite of its sizes, are recognizing how important payroll services are in the growth and smooth flow of their business.

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Salary indexation JC 200

Salary indexation JC 200

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Each year in January, there is an index adjustment of the salaries for the employees resorting under JC 200.

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Maximum value meal vouchers

Maximum value meal vouchers

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As of January 2016, employers are allowed to increase the value of the meal vouchers by € 1.00. The maximum value of a meal voucher is now € 8.00 per day worked.

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Tax shift in Belgium for employers and employees

Tax shift in Belgium for employers and employees

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Payroll provider Pro-Pay made a summary of the tax shift that will be implemented in Belgium as from 2016. Labour costs are set to decrease while consumption will be more heavily taxed. The key changes include lower employers’ social security contributions, higher social security reductions for new employers, tax rate cuts for employees,…

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Calendar 2016

Belgian Public holidays in 2016

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As 2015 is gradually coming to an end, payroll provider Pro-Pay wants to give you an overview of the Belgian public holidays for the year 2016 and a reminder of the rules applicable to replacement days.

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Exemption from withholding tax for start-up companies (BusinessBelgium.be)

Exemption from withholding tax for start-up companies

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Payroll providers like Pro-Pay are informing their clients that with effect from 1 August 2015 start-ups in Belgium can benefit from exemption of withholding tax on earned incomes. This is discount of 10% for SMEs and 20% for micro-companies .

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