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Hiring in Belgium

 

Accredited payroll provider

The accredited payroll provider is a service supplier entrusted with the payroll administration of the employer. The social secretariat also takes care of the collection of social security contributions and payroll taxes and ensures an accurate and correct dataflow towards the Belgian authorities in name of and for the account of his clients/employers.

The missions of an accredited payroll provider are : 

  • calculating monthly salaries and supplying all necessary information for the payment thereof
  • taking care  of all declarations as well as the calculation of contributions for fiscal and social security administrations
  • collecting social security contributions (employer’s contribution as well as worker’s contribution) and transfer them to the National Social Security Office
  • collect the withholding tax on professional income and transfer it to the fiscal administration gather and transfer all necessary information in order to determine each worker’s personal benefit entitlements in all sectors of social security
  • keeping the unique employer’s file up to date
  • informing and advising  employers with regard to their obligations
     

Is the affiliation to an accredited  social secretariat compulsory?

Employers are free to affiliate or not to an accredited payroll provider. 
More than 91% of  employers active in Belgium in the private sector are affiliated to a payroll provider. This means that payroll providers take care of wages’ calculations for more than 71% of all wages in the private sector.

What are the fees for  an affiliation to an accredited payroll provider?

The fees charged by a payroll provider depends on the number of employees under the payroll. Beside the single contribution for case constitution costs , there is a fixed monthly contribution and a variable monthly contribution depending on the number of employees under the employer’s payroll.
A provision equal to a 3 month contribution (fixed contribution + variable contribution) is also due.

What is the length of an affiliation to a payroll provider?

The affiliation lasts 3 years. After 3 years, the affiliation is automatically renewed for a new 12 month period. But the affiliation is automatically ended when the employer does not have any employee under its payroll.

Is the affiliation to an accredited  social secretariat compulsory?

Employers are free to affiliate or not to an accredited payroll provider.
More than 91% of  employers active in Belgium in the private sector are affiliated to a payroll provider. This means that payroll providers take care of wages’ calculations for more than 71% of all wages in the private sector.

 

Formalities when hiring in Belgium

Any employer which plans to hire an employee in Belgium has to fulfill the following obligations :

  • to have an enterprise number
  • to have a NSSO number (social security number)
  • to have a work compensation insurance
  • to make a declaration of employment (Dimona)
  • to be affiliated to a medical service
  • to have a contract signed with the employee 
  • to have a work regulations

All those obligations have to be fulfilled at the very latest at the first work day.

! Hiring for the first time in Belgium: social reductions

If you are an employer in Belgium hiring for the first time, you are eligible for considerable reductions in the social security contributions for the first six five salaried workers you employ. For the first employee,  you will enjoy a lifelong exemption from social contributions. For the 5 next employees, you will benefit from social contribution reductions for a three-year-period., for a five-year period.

What does your payroll administrator need to know  to calculate the salaries of your employees?

  • Details of  the employees : name, date and place of birth, gender, nationality, address, social security number….
  • Family situation : married, divorced, single, number of children, partner with or without income,…
  • Employee bank account Employment contract details :  starting date, duration of trial period, white or blue collar contract, fixed or unfixed term contract,…
  • Salary and fringe benefits (advantages in kind) : luncheon vouchers, reimbursement of transport costs,….
  • Work regime (full time, part time, weekly  number of hours,…)
  • Days of absence (paid holidays, sickness days,….)
  • Number of months previously worked  in Belgium (the year before and  the current year)

You should inform your payroll administrator of any change such as a change in the family situation, a  pay increase,….

When you want the salaries to be paid, you contact your payroll. You ask him to make the salary calculations of the current month. To do so, you have to inform him of :

  • Any change of the employee profile (address, family situation, type of contract,  salary, work regime, weekly hours,….)
  • Any absence which occurred during the month (sickness, paid leave,…).
Types of work contracts

Under Belgian labor law, it can be distinguished between :  

Fixed term contract or open-ended contract (unfixed term contact)

Based on the period for which the work contract was concluded, a distinction can be made between fixed and  open- ended contract (unfixed term contract).

An open-ended contract is a contract where no time limit is set. Both parties can terminate the contract whenever they want  providing  the legal notice  requirements are respected.

 A fixed term contract is a contract where both parties have agreed on the length of the contract. The contract ends automatically at the time set in the contract. The renewal of the contract is possible but limited (maximum 2 years).

Blue collar work/employment contract or white collar work/employment contract 

In Belgium, based on the nature of the work, a distinction can be made  between blue collar  contract and white collar work contract.

A blue collar work contract is a contract in which the worker performs manual work.

A white collar work contract is a contract  in which the worker performs intellectual work.

The main  differences between blue and white collar contracts are :

  • guaranteed pay during contract suspensions (sick leave)
  • annual holidays (paid leave)
  • the employer’s social contributions rate
Special taxation scheme for foreign executives in Belgium

Foreign executives working in Belgium can benefit from an advantageous tax scheme under certain conditions.

Conditions for the foreign executive tax scheme

Executives to whom the special scheme applies are those who have a foreign nationality and have not previously been Belgian fiscal residents. In addition, these executives must:

  • have been recruited directly abroad by a Belgian company that belongs to an international group to work temporarily in Belgium;
  • have an annual income of at least € 38,665 (including gross salary and other taxable elements of the wage package);
  • have maintained the centre of their economic and social interests abroad (outside Belgium).

Advantages of the foreign executive tax scheme

  1. 1.    Reimbursement of expenses
  2. Reimbursements of certain expenses will not be considered as remuneration and consequently will not be taxed insofar as these reimbursements cover additional expenses resulting from coming to work in Belgium.

    These reimbursements can be based on lump-sum amounts or be paid directly as reimbursements of specific expenditures. They can pertain both to non-repetitive expenditures and charges, and to repetitive expenditures and charges.

2.    Non taxation of remuneration paid for activities exercised abroad

The main advantage of the special foreign executive taxation scheme is to enable the executives in question to exclude from their taxable income the part of their remuneration corresponding to professional activities exercised abroad.

The total remuneration (after deducting reimbursed expenses) must be broken down into the share corresponding to professional activity exercised in Belgium (taxable) and the share corresponding to professional activity exercised outside the country (not taxable).

The foreign executive and his employer must show that the executive has spent a given number of working days outside the country for professional reasons.

Consequently, it is important for foreign executives to carefully keep all documents and evidence justifying their travel abroad (airplane tickets, hotel bills, receipts for fuel and restaurants, etc.) during the year when they incurred these expenses.
 

  1. 3.    Non-resident status

The executive is considered as a non-resident, even if he lives in Belgium. Consequently, any income pertaining to his personal fortune often is not taxed at all.

Procedure for the award of the foreign executive tax scheme

Application of the special tax scheme is not automatic and is subject to the introduction of a single application that must be addressed by the employer to the Belgian tax administration.

The dossier must normally be introduced within 6 months as from the first day of the month following the beginning of the executive's work in Belgium.

Holidays & different types of leave

Legal holidays

The number of annual leave days is calculated based on the number of days worked during the previous year in Belgium. So, a full-time employee who has worked 12 months the precedent year in Belgium is legally entitled to 20 days annual leave. For those who have not worked full-time during these 12 months, annual leave days are pro-rated based on the days worked in the previous year.

European holidays

People who are not entitled to 20 annual leave days (because they have not worked a full year the precedent year in Belgium) are entitled to additional holidays in order to complete the number of holidays up to a maximum of 20 days.

Different types of leave

In addition to statutory holidays depending on the work done in the previous year, there can be additional discretionary leave granted by the employer - European holidays (which complete the statutory paid leave), public holidays and leave in special circumstances. With the agreement of the employer, the employee can also take days off without pay.

Public holidays in Belgium

Employees are not required to work during the ten following legal holidays and the employer has to pay normal remuneration for these public holidays: New Year's Day (1 January), Easter Monday, Labour Day (1 May), Ascension, Pentecost Monday, National day (21 July), Assumption (15 August), All Saints Day (1 November), Armistice (11 November), Christmas Day (25 December).
When a holiday coincides with an habitual day of inactivity (Saturday or Sunday), this day will be replaced.

Terminate a work contract

In order to terminate a work contract correctly, certain rules, which are determined by the conditions in which the termination is carried out, must be implemented:

  • Why does the work contract need to be terminated? Is it due to a case of force majeure, a death, a cancellation clause, through mutual consent or through a unilateral decision by the worker or the employer?
  • Who is being terminated? Is it a single worker or several workers? Is it a mass redundancy or a company closure?
  • Does the worker have to give notice? Is the work contract being terminated in return for a redundancy payment or is the worker being terminated on serious grounds?
  • Which type of work contract is being terminated? Is it a permanent or fixed-term work contract, a student or sales representative contract, a part-time work contract or a replacement contract?
  • Is the worker protected?
  • Is the performance of the work contract suspended?
  • Are there adequate grounds?

Termination of the employment contract by the employer: notice periods

For employment contracts that started on or after the 1st of January 2014, notice periods for permanent contracts depend solely on employee's length of service with the employer.
 

If termination
during the first year
<3 months <4 months <5 months <6 months <9 months <12 months
  1 week 3 weeks 4 weeks 5 weeks 6 weeks 7 weeks

 

If termination
during
2nd year After 2 years After 3 years After 4 years After 5 years and
until 19 years
From 20 years
1st quarter 8 weeks 12 weeks 13 weeks 15 weeks

3 weeks per year

of seniority

62 weeks + 1 additional

week per year of

seniority

2nd quarter 9 weeks
3rd quarter 10 weeks
4th quarter 11 weeks

If an employer wants the termination to take effect immediately without allowing the employee to work during the notice period, he will be liable to pay notice compensation which equals to all the wages the employee would have been entitled if the notice period ad been worked. In the case of serious misconduct, the termination takes effect immediately without notice period or compensation.

Except in cases of serious misconduct, the employer has only to state the reasons for dismissal of an employee upon request of the employee. Furthermore, he has not to state the reasons for dismissal of an employee during the first 6 months of the contract.