Payroll Newsletter Q4 2023

Overview purchasing power premium 2023

Companies who achieved high or extremely high profit can grant their employees a purchasing power premium between the period of June 1 until December 31, 2023.

In principle, the premium for high profit can be a maximum of 500 EUR, whereas the premium for extremely high profit can be a maximum of 750 EUR. The premium is not paid in cash but in the form of consumption vouchers.

In order to know what the high or extremely high profit includes, the sector in which the company is situated must be consulted first. The Joint Labour Committee (JLC) can specify all modalities of the premium.

For JLC 200, the Protocol agreement stipulates that companies that achieved high profits in 2022, have to grant a purchasing power premium of:

• 125 EUR if the profit (i.e. the ratio operational company profit (code 9901) on total assets) in 2022 was at least 25% higher than the average profit in the 3 previous closed financial years.
• 250 EUR if the profit was at least 50% higher than the average profit in the 3 previous closed financial years.

Companies with extremely high profits in 2022 must grant a purchasing power premium of 375 EUR if profits were doubled in 2022.

Please keep in mind that the employer can only grant the applicable premium if the following additional condition is fulfilled: the operational company profit in 2022 (code 9901) is at least 5% of the total assets in 2022.

For JLC 207, non-conventional companies who have made:

• high profits in 2022, must grant a purchasing power premium of 350 EUR to the employee included in the function classification if the sum of codes 9901 + 630 + 631/4 + 635/8 of the year account of the financial year 2022 is positive.
• extremely high profits in 2022, must grant a purchasing power premium of 351 EUR to the employee included in the function classification if the code 9901 dived by the total assets (= ROA) is at least equal to double the average of the ROA of the last 6 years.

Please find underneath an overview of the current sectoral stipulations which are already published.

Secondly and next to the sectoral premium, the company can add a supplementary premium based on a company Collective Labour Agreement (CLA), without the sum of the sectoral premium and the premium on the company level exceeding 750 EUR. For this supplementary premium, the company must be able to prove that they have received good results.

If there is no sectoral CLA and if it concerns a category of personnel for which it is not customary to conclude such an agreement on company level, the allocation may be regulated by a written individual agreement.

Reintroduction of relance hours as of July 1, 2023, until June 30, 2025

According to the act of July 31, 2023, as of July 1, 2023, employees have the possibility again to use relance hours.

These are 120 hours in a year (i.e. for 2023: between July 1, 2023, and December 31, 2023), allowing the employee to perform work outside of the normal working time and which are not subject to taxes or social security contributions.

The relance hours can be performed next to the voluntary hours of overtime, resulting in the possibility of performing 220 extra hours in one calendar year.

Please keep in mind that no overtime surcharge is paid, and no compensatory rest is granted for the relance hours, these hours are paid at hourly rate.

In order to use these, relance hours, the employer and employee must draft a written agreement. This agreement has a maximum duration of 6 months but can be extended.

Work resumption premium

According to the Programme Act of December 26, 2022, and the Royal Decree of July 17, 2023, the employer who foresees in adapted work for an employee who has a long-term illness and who fulfills all required conditions, can receive a work resumption premium of 1.000 EUR of the health insurance fund.

To receive this premium:

• The employee must at least be 1 year incapacitated for work;
• The employee must restart adapted or progressive work for his health situation with the approval of the advising doctor of the Health Insurance Fund;
• The period covering the approval of the advising doctor as well as the restart finds place during the period from April 1, 2023, until March 31, 2025;
• The (progressive) employment must be remunerated;
• The employee must perform the approved work by means of an employment agreement;
• The employee performs the approved work for at least 3 months before October 1, 2025.

The employer can request this premium electronically to the Health Insurance Fund authorized for the payment. This can be done at the earliest after the first three months of adapted or progressive work.

Should you wish to receive more information regarding this premium, please contact our Legal Labour law department.

New target group reduction in the Flemish region

The Flemish region has decided to introduce as from October 1st, 2023, a new target group reduction. This reduction concerns employees without recent and sustainable work experience.

This reduction is only applicable to employers with an establishment in the Flemish region.

The Employees eligible for the reduction must meet a certain number of conditions:

• They must be aged between 25 and 58 on the last day of the relevant quarter;
• They must have been registered with the VDAB as a non-working jobseeker for at least 2 years.
• They must have a reference quarterly wage of less than 10,000 euros.

What amount?

The amount of the reduction is 1.000 EUR (G1) for the quarter in which employment started and the 3 subsequent quarters. To receive the full amount, the employee must work at least 80% of normal full-time performance.

The replacement of public holidays that occur in the weekend in 2024

With respect to the replacement of public holidays that occur in the weekend in 2024, we would like to point out that if the company wants to fix another replacement date, the decision must be taken on a company level and needs to be communicated with the employee, before December 15, 2023.

A copy of the notice must be annexed to the work rules and must be sent to the Social Legislation Inspectorate.

Business travel expenses

Expenses proper to business trips could be reimbursed on a lump sum basis under certain conditions. If the employee (or the director) does not receive a company car and uses his/her own vehicle for business travels, the employer may grant the employee a lump sum allowance to cover the expenses proper to the use of the own vehicle for professional purposes.

The reimbursement of these business expenses can be done in two ways:

1. Reimbursement upon expense notes based on the actual expenses incurred;
2. Reimbursement of a fixed mileage allowance 0,4259 EUR per kilometer (amount as of October 1, 2023).

Please note that the lump sum allowance is adjusted on a quarterly basis by the Belgian government.

Wage withholding taxes reduction on overtime

Under certain conditions, a special tax benefit is allowed for both the employer and the employee, when overtime has been performed by an employee on Belgian soil.

• For the employee, a tax reduction is applied when calculating the Belgian wage withholding tax on the Belgian taxable salary. Consequently, the employee would receive a higher net salary.
• The employer may benefit from an (partial) exemption on the amount that has been deducted from the employee’s salary (see point above) before payment of the wage withheld tax to the Belgian tax authorities. In these cases, the employer does not need to transfer the whole amount to the Belgian tax authorities.

In principle, the tax benefits for working overtime are only granted for the first 130 hours that the employee has worked as overtime during the taxable period.

However, in the past, this limit has been temporarily increased to 180 hours from 1 July 2021 up to and including 30 June 2023.

As part of the “interprofessional negotiations” for the period 2023-2024, the temporary increase in the 180-hour limit has been extended from 1 July 2023 up to and including 30 June 2025.

Note that this is still only allowed upon respecting the required conditions. For example, for the sector of construction works, the employee should still be employed by an employer who uses an electronic attendance recording system on the construction site in order before applying these benefits for overtime.

Sickness during holidays

A draft law adopted by the House on 13 July aims to allow employees who fall ill during their holidays to benefit from guaranteed pay and to carry over their days of leave to the end of their incapacity or later. This draft law is part of the adaptation of the regulations on annual holidays to comply with a European directive of 4 November 2003.

Carrying over holidays:
Employees who wish to carry over their holidays immediately following their incapacity for work must inform their employer of this request at the latest when they submit their medical certificate to their employer.

The employee has the option of carrying over his days until 31 December of the holiday year in which the incapacity for work occurred (and not as previously announced “during the 24 months following the holiday year”).

The employment regulations will have to include a specific reference to the formalities to be complied with by the employee in the event of incapacity for work during an annual holiday period.

Entry into force? The law is due to come into force on 1 January 2024.

For more information on the new regulation on annual holidays and the carrying over of annual holidays in the event of incapacity for work or other suspensions, you can always contact your payroll provider.

Social security reduction first hirings – Important update

As of January 1, 2024, significant changes will be implemented with respect to the reduction of Belgian social security contributions (employer part) for first hirings. Hereafter you can find the most important modifications.

1. For the first hiring, the social security reduction will be reduced to 3.100 EUR/quarter (instead of 4.000 EUR/quarter). The adaptation will be applicable on current reductions and new reductions. The reduction for the first employee remains unlimited in time.
2. The social security reductions for the fourth, fifth and sixth hiring will be ceased for the future. Current reductions for the fourth/fifth/sixth hiring can still be applied until the end of the reduction period.

Keep in mind that these modifications have not yet been officially published in the Belgian Official Gazette and it still concerns a draft of law.

Hereafter, you can still find an overview of the current reductions.

*Possible decrease of the reduction to 3.100 EUR
**Possible ceasing of these reductions

Stay informed to take necessary actions and adjust your HR strategy accordingly. If you have any questions about the impact of these changes, feel free to reach out.

Telework in Europe: New official Framework Agreement: update of the signatories' countries

As mentioned in our previous payroll newsletter, European Member States have officially issued the Framework Agreement on the application of Article 16 (1) of Regulation (EC) No. 883/2004 in cases of habitual cross-border telework.

This Framework Agreement shall enter into force on 1 July 2023 for most of the signatories' countries.

As a reminder, please note that until 30 June 2023, we were still in a period of tolerance during which the physical presence of a person is not taking into account to determine the competent state to levy the social security contributions.

The purpose of this Framework Agreement is that it enables an employee who carries out habitual cross-border telework in Europe to remain subject to the legislation of the State in which its employer has its registered office or place of business, although this person teleworks in its State of residence for less than 50% of its total working time.

Based on the above, we remind you that as from July 2023, outside the scope of this Framework Agreement on cross border telework, the general rule to determine the competent social security State will apply again.

According to the EU Regulation on social security Nr. 883/2004, an employee is subject to the social security system of the State in which his employer is located.
In case of activities in two or more Member States (simultaneous employment), the employee is subject to the social security system of the State of residence provided the employee works more than 25% in the State of residence. If this is not the case, a decision tree has to be verified to determine the applicable social security regime.

As promised, you can find hereafter the list of the countries which have now signed the Framework Agreement (overview based on the situation at October 1, 2023) and apply the agreement since July 1 2023: Germany, Switzerland, Liechtenstein, Czech Republic Austria, Netherlands, Slovakia, Croatia, Spain, France, Liechtenstein, Malta, Belgium, Luxembourg, Finland, Norway, Poland, Sweden, Switzerland and Portugal. Furthermore, Slovenia applies the agreement since September 1,2023.

In case you have employees teleworking abroad or you are a foreign employer with staff teleworking in another EU member state, please reach out Stijn Sablon (Stijn.sablon@mazars.be) or Bart Van Laere (bart.vanlaere@mazars.be).

Vacation days to be taken by the end of the year

The Belgian labour legislation stipulates that all (legal) vacation days of 2023 must be taken before the end of 2023. This also concerns overtime days (if applicable), as well as the inclusion of the recuperation days of public holidays and working time reduction days.

Please make your employees aware of these regulations, to avoid discussions and concerns by the end of the year.
If an employee is unable to take these vacation days, we could process a payment of these days in December.

Deadlines

Belgian non-resident income tax return
November 24th 2023 : Filing of the Belgian non-resident income tax return for assessment year 2023 (income year 2022).

If you wish to receive more information, or assistance on the topics above, please don’t hesitate to contact us.