Late Friday night, the negotiators for a federal government reached an agreement that established the framework for the next four years. Below, we highlight some key elements that may affect reward practices of Belgian employers.
Several envisaged measures may require employers to rethink their current reward mix:
- Flexible Remuneration: a legal framework is expected which would foresee a gross salary sacrifice limitation to a maximum of 20% of the annual gross salary. The grant of additional bonuses would still be possible on top of the salary. It’s time to look proactively at your planned budget creators of your flex scheme
- Simplified Collective Bonus Systems: Efforts to increase the popularity of collective bonus schemes include the simplification and harmonisation of the existing collective bonus systems like CLT 90 and profit-sharing schemes. The goal is to make collective monetary rewards more straightforward without increasing tax burdens for employers or employees. Do collective bonus schemes form sufficiently part of your reward mix today?
- Meal vouchers will eat other vouchers: the amount of meal vouchers would be increased (twice €2 during the legislature) and the scope extended, but all other vouchers (i.e., eco vouchers, culture vouchers, etc.) would gradually be abolished. Time to rethink reward recognition policy?
- Mobility budget for all employees: the updated budget would replace the existing employer intervention schemes for the employee’s home-to-work and private travel. The employer would provide a budget, in which the car, as well as other modes of transport, are spending options based on their real value. Is your company ready for a multimodal mobility budget policy?
- Strengthen of the second pillar occupational pension scheme: for employees the goal is a 3% salary contribution into the supplementary pension scheme. When did you last review the coverages and corresponding contributions of the (different) employer occupational pension schemes? What would be the additional cost in case the 3% threshold would not be reached yet?
Moreover, several envisaged measures aim to improve the attractiveness of Belgium for international and innovative talent. Is your reward policy ready to embrace these expected future measures?
- Enhanced Expat Regime: To attract international talent, Belgium’s expat regime will become more appealing. The tax-free allowance will rise from 30% to 35%, the EUR 90,000 cap will be abolished, and the minimum gross salary requirement will be lowered to EUR 70,000.
- Copyrights Regime Revamped: will Belgium again become a hub for digital professions? The tax regime for copyrights, offering favorable tax treatment for copyright transfers, will be reintroduced and expanded. This move aims to eliminate the existing artificial distinctions between certain (digital) professions.
- Wage Withholding Tax Exemptions decrease the cost of employment:
- Night and Shift Work: After introducing Option Bis, it is the intention that night & shift work will (re)turn to a system with clear foundations that will establish the benefit of the partial exemption. New measures should ensure greater certainty and stability regarding the exemption for night and shift work.
- Research and development: improvement of legal certainty by foreseeing stability. The scope would be reformed concerning research at universities, colleges, university hospitals and scientific research funds. Furthermore, it is noteworthy that the previously introduced idea of recognized research centers has found its way into the government agreement. As a recognized research center, one would receive a specific, stable framework within which to operate.
The implementation of these measures by means of translation into draft bills is expected in the course of 2025. It is now the time to look at your reward policy and prepare for change.
The PwC reward team is closely monitoring these developments and will share more in-depth news flashes on certain reward elements. For further guidance on how these changes might impact your business, contact Bart Van den Bussche or one of your PwC contacts.
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- Belgian tax reform
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