Extension recovery hours and exemption of withholding tax for overtime hours 2025
The Arizona Coalition Agreement that was reached at the end of January 2025 provides for a structural increase of the number of voluntary overtime hours which an employee can perform (360 hours per year), as well as for a simplification of the underlying formalities. It was envisaged to implement this by 1 July 2025 but this timeline could not be met.
The Program Law that was published on 29 July 2025 in the Belgian Official Gazette hence provides for a new temporary extension of two already existing measures, i.e.:
-
The recovery hours, 120 voluntary net overtime hours which come in addition to the statutory 100 voluntary overtime hours, and which were initially introduced as a support measure during the Covid-19 crisis, have been reintroduced from 1 July 2023 to 30 June 2025.
-
The partial exemption from withholding tax for overtime with an overtime supplement is extended.
This temporary extension covers a six month period, from 1 July 2025 through 31 December 2025.
Recovery hours
The difference with ordinary voluntary overtime
An employee can perform 100 voluntary overtime hours per calendar year (extended to 120, but the basic quota of 100 overtime hours is used for recovery hours).
Recovery hours are 120 additional voluntary overtime hours per year that can be performed on top of these ordinary voluntary overtime hours. However, they differ from ordinary voluntary overtime in a number of ways:
-
There is no internal overtime limit for recovery hours.
-
There is no mandatory overtime supplement on recovery hours. However, the employer can grant it voluntarily.
-
Recovery hours are granted net, so neither social security contributions nor taxes are due.
Application conditions
As for ordinary voluntary overtime, employer and employee must reach a prior written agreement on recovery hours. This agreement is valid for a maximum of six months and must be renewed thereafter.
The cap of 120 recovery hours is valid for calendar year 2025. An employee who already performed 120 recovery hours during the period from 1 January 2025 to 30 June 2025 has fully exhausted all his rights and cannot perform another 120 recovery hours during the period from 1 July 2025 to 31 December 2025.
The recovery hours can be performed even if the ordinary voluntary overtime has not yet been used.
Recovery hours are subject to a maximum daily and weekly limit of 11 hours per day and 50 hours per week.
Exemption from withholding tax and social security contributions
Recovery hours are exempt from withholding tax and social security contributions. These are therefore "net" overtime hours.
Favourable tax treatment: partial exemption of withholding tax for 180 overtime hours
For overtime that does not fall under the aforementioned regime (such as for example the ordinary voluntary overtime), an overtime supplement has to be paid. For this type of overtime, however, there is a partial exemption from withholding tax for 130 overtime hours per calendar year:
-
For the employer: exemption paying withholding tax of 41.25 % of the gross salary which is the basis of the calculation of the overtime and on top of which a supplement of 50 or 100 % has to be paid.
-
For the employee: exemption of withholding tax of 57.75 % of the gross salary which is the basis of the calculation of the overtime and on top of which a supplement of 50 or 100 % has to be paid.
For 2021 to June 2023, the number of overtime hours was temporarily increased to 180 overtime hours per calendar year. The partial exemption was again increased to 180 overtime hours per calendar year from 1 July 2023 until 30 June 2025, and the latter date has now been further extended until 31 December 2025.
Your Payroll Business Partner will apply this automatically if applicable.
