Payroll in Belgium - Solutions and Compliance
Payroll in BelgiumUpdated on Monday 12th June 2023
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Payroll in Belgium is the total amount of wages paid by the company. Moreover, the term also encompasses the list of employees who are due payment according to their employment agreement, as well as the practices of making the needed deductions for the purpose of paying the due employer’s taxes to the Belgian authorities.
The payroll process is an essential one for good functioning of any company and it starts as soon as the legal entity hires employees in Belgium.
Our partner accountants in Belgium offer complete packages for companies of all sizes that also include payroll management solutions. Please reach out to us for more information about how we can assist you.
Payroll management in Belgium
Like most other countries, Belgium uses monthly payroll. This means that the employer makes monthly payments to its employees. The payslip is the proof of this payment, and it is issued as part of the payroll activities, once the wage transfer has been made to the employee.
Companies have two options concerning payroll in Belgium: they can use an internal system dedicated to this practice, or they can employ the services of a third party, a company that offers tailored solutions.
The Belgian labor law distinguishes between two categories of workers: white-collar, and blue collar. This means that not any payroll activities will be performed by taking this into consideration.
Some of the activities associated with payroll in Belgium include the following:
- Employee time and attendance;
- Salary and benefits calculation;
- Wage payments on a monthly basis;
- Keeping electronic payslips/payroll records;
- Withholding the payroll tax (please see below);
- Making the needed social security contributions.
Outsourcing payroll in Belgium will mean that a third party handles these steps. By doing this, the company owners will have the time to focus on growing their business, at the same time making sure that the rights of their employees are observed, and that the company is compliant with the taxes and duties due for having employed staff in the country.
Our employment lawyers in Belgium can provide you with more information on the relevant labor laws, and the duties and responsibilities of employers.
The payroll tax in Belgium
As part of their duties and responsibilities concerning their employees, companies in Belgium need to withhold a payroll tax on the remuneration and the pensions they pay to resident and non-resident staff and directors, when these payments are considered taxable professional income.
In some cases, partial professional withholding tax exemptions apply, such as in the case of researchers, or for certain types of employment (such as night work, or shift work).
As far as social security contributions are concerned, the following rates are relevant:
- The base employer’s contribution is 30.57% or 1.08 times the gross salary in case of blue-collar employers;
- The base employer’s contribution is 25% of the gross salary in case of white-collar employees;
- In case of blue-collar employees, an additional annual contribution of 10.27% on 1.08 times the gross salary applies;
- Companies that have fewer than 20 employees can pay less;
- Small and medium companies can benefit from an exemption for the first hire, as well as reductions for the next five hires.
Our lawyers can give you more information about the tax on payroll in Belgium, as well as the employer’s social security contributions upon request.
If you are interested in other tax matters, such as VAT or corporate tax issues, as well as annual reporting and filing matters for companies, please reach out to our accountants in Belgium.
Our lawyers in Belgium assist both companies and individuals. If you have questions about our legal services or require legal advice and representation in a particular area of law, contact our law firm in Belgium.