Lower payroll costs? Available incentives and deductions
Payroll costs are quite high in Belgium. In fact, they are the second highest in Europe. There are, however, various ways of reducing your costs as an employer, without having to ask your employees to give up part of their wages. Here’s a summary.
Firstly: although the gross salary is the largest part of the payroll costs, you cannot choose an amount arbitrarily. Employers are bound by collective labour agreements and the guaranteed minimum monthly income. However, there are many other options: ;
1. A (temporary) reduction in your social security contributions
Your social security contributions constitute a large part of your payroll costs: usually 25% of the gross salary. Fortunately, you can get a (temporary) rebate. There are two possibilities:
A structural deduction, allowing you to pay reduced quarterly contributions for your employees who are fully subject to social security. The reduction is determined by the status (blue- or white-collar employee, civil servant), the quarterly wages and the workload (full-time or part-time). Since the tax shift, low and medium wages are especially suitable.
On top of that, you may request a target group deduction. Hiring employees from a specific target group also implies reduced employer social security contributions.
2. An incentive from the Brussels-Capital Region
The Brussels-Capital Region has also introduced several measures to promote employment.
When recruiting a first employee, you are eligible for incentives and subsidies under certain conditions.
If you are considering exporting your products, but need additional manpower for that, you can get a 20,000-euro incentive to hire an additional employee full-time.
Finally, hiring someone for a ‘specific economic project’ also makes you eligible for an incentive. Such a project may involve, for example, research into a new product or the introduction of a system that guarantees the quality of your products and services.
Hiring an employee has a major financial impact, but there are many incentives and deductions to help reduce payroll costs. Exploring the various options is certainly worth it. Feel free to contact us should you have any questions.