Bonus (BusinessBelgium.be)

The annual limit for bonus plans will increase from 1 January 2016

Pro-Pay draws your attention that, as part of the social agreement between employers and employees for the period 2015-16, the annual limit for bonus plans will increase. This increase will take effect from 1 January 2016.

As a result of the interprofessional agreement of 2007-08, a system of non-recurrent, result-dependent benefits was implemented. These benefits are commonly referred to as the wage bonus.

The wage bonus refers to benefits related to the collective results of a business, a group of businesses or a well-defined group of employees, on the basis of objective criteria.

These benefits are dependent on the realisation of clearly observable, transparent, definable/measurable and verifiable objectives which are uncertain at the introduction of the wage bonus. This is described in what is referred to as a bonus plan.

Until the end of 2015, the annual limit was at a level of €3,130. On top of this amount there is just a special contribution of 33% to be paid by the employer and 13.07% payable by the employee. The wage bonus is exempt from tax for employees.

In the same programme law it is anticipated for this annual limit to be increased to €3,200 from 1 January 2016.

Whether or not the employee will benefit from this increase depends on their bonus plan. If the bonus plan refers to a nominal amount then it must be adapted before the employee can benefit from the increase. If the bonus plan refers to the relevant statutory article then the increase will take place automatically.

When drawing up new bonus plans and in the adjustment of existing bonus plans, it is also worthwhile recommending that references to the nominal amount of €3,130 are avoided and replaced with references to the applicable statutory article*. In this way, employees can immediately enjoy the increases resulting from indexation and any future changes to the annual limit.

It is recommended to foreign companies, to ask information about bonus plans to a payroll provider with expertise in payroll management for international employers.

* Article 38, §3novies of the Act of 29 June 1981 with regard to the general principles of social security for employees.