Old Man Winter is knocking at the door and the first Christmas trees are beginning to pop up, marking the perfect occasion to recall the possibility to present employees with year-end holiday gifts – free from social security contributions and income taxes.
General principles
According to the Belgian social security legislation, gifts in kind, cash or voucher are not considered as salary if they are attributed for the occasion of Saint Nicholas, Christmas or New Year’s. In addition, the amount of the gift(s) cannot exceed EUR 40 per employee per year. This amount can be increased with another EUR 40 per year for each dependent child.
If these conditions are met, the amount of the gift will not be subject to social security contributions. However, if the above maximum amounts are not respected, the entire value of the gift will become subject to social security contributions and not just the part of the gift that exceeds said threshold.
Important remark – amount for income tax purposes
The maximum amount of a year-end holiday gift that can be attributed free from social security contributions was increased from EUR 35 per year to EUR 40 per year in July of this year. However, the corresponding maximum amount exempt from income taxes has not yet been adjusted accordingly and is currently still set at EUR 35 per year.
This income tax threshold is expected to be raised to EUR 40 per year in the future.
