Collective bonusplans: new threshold amount
Since 2008, employers in Belgium may grant their employees a non-recurring, result-related benefit, also referred to as a bonusplan, based on the act of 21 December 2007 and collective labour agreement n° 90 (CLA n° 90).
If the benefit does not exceed a certain threshold and fulfils a number of conditions, the bonus system enjoys favourable treatment with regard to tax and social security. Thus the allocated benefit is not subject to withholding tax up to the threshold, it is tax deductible as a business expense and is not, for example, included in calculations of an indemnity in lieu of notice and the holiday pay. It is, however, subject to a special employer’s social security contribution of 33% and a solidarity contribution of 13,07% for the employee.
The aforementioned main conditions are the following:
- The benefit must be related to collective results or objectives;
- The results or objectives must apply to a company, a group of companies or a well-defined group of employees;
- The results or objectives must be clearly outlined, transparent, determinable/measurable and verifiable;
- At the time of introducing the bonus plan, it should be uncertain whether the results or objectives will be achieved;
- The bonus plan meets the formalities as determined by CLA n° 90. These require among other things, a collective labour agreement concluded on company level or an act of adhesion and the approval of the CLA or the act by the competent authorities according to the templates and timing as laid down in CLA n° 90.
The yearly threshold is adapted every year on January 1st to the health index. Hence as from January 1, 2017 the new thresholds are the following:
Social threshold
The limit which is applied by The National Social Security Office amounts to 3.255 EUR gross in 2017 (= 2.830 EUR net + a solidarity contribution of 13,07%), per calendar year and per employee.
Fiscal threshold
For the tax authorities, the amount is exempt of taxes for a maximum amount of 2.830 EUR net per calendar year and per employee in 2017.
Feel free to reach out to your contact person if you want to check whether your collective goals for 2017 are eligible for the advantageous system provided by CLA n° 90.
