Through a transitional measure for 2013, employers can choose to bear the cost of the new employee social security contribution on bonuses. This will not be considered as a benefit in kind by the NSSO.
The Newsflash of 1 March 2013 explained that due to recent federal budget changes, all bonus payments made from 2013 onwards are subject to a new 13.07% employee social security contribution (in addition to the 33% employer contribution).
The act introducing this employee social security contribution does not provide for transitory measures. This means that, legally speaking, this new measure fully applies to bonuses paid in 2013 and based on a plan/CBA concluded in 2012. This results in a considerable disadvantage for the employee.
In 2012, bonus plans were, in fact, concluded with the idea that the bonus, as stipulated in the plan, would be a net amount which would be fully paid to the employee (exempt from employee social security contributions and income taxes). However, due to the introduction of this new employee contribution, the net bonus amount is lower than that provided for in the plan.
For example, for a 2013 bonus plan providing for a EUR 1,000.00 bonus, the employee would receive a net amount of EUR 869.30 instead of EUR 1,000 as was previously intended. Should the employer wish to compensate this loss by paying an additional premium, this premium would in principle be considered as salary subject to full social security contributions and income taxes.
Through a transitional measure affecting bonuses paid in 2013, the NSSO (the Belgian National Social Security Office) will allow the employer to bear the cost of the new employee social security contribution without considering it as a benefit in kind.
This means that, with a bonus plan providing for a EUR 1,000.00 bonus:
- the employer can pay his employees a bonus of EUR 1,000.00 net;
- the employer can bear the cost of the 13.07% employee social security contribution, to be calculated on top of the EUR 1,000.00 (EUR 130.70) – for 2013, the NSSO will not consider this as a benefit in kind or an additional bonus subject to social security contributions
- the employer also pays the 33% employer social security contribution, also to be calculated on the EUR 1,000.00 (EUR 330.00)
- total employer costs: EUR 1,460.70
This temporary measure will not apply to bonus payments made in 2014 onwards.
In line with the NSSO position, the FOD WASO/SPF Emploi has confirmed that bonus plans concluded in 2012 can be interpreted as providing for a net amount. This is despite the lack of explicit confirmation in the plan, since upon the plan’s conclusion in 2012, the bonus amount could still validly be considered as a net amount. This interpretation will of course not be accepted if the plan explicitly provides for a gross bonus amount.
