The Complete Guide: Payroll in Belgium and Things You Must Know

Hiring remote employees in Belgium offers access to a diverse and talented workforce. Belgium has a unique blend of Dutch and French influences, creating a rich cultural landscape. The country's labor laws differ for white-collar and blue-collar workers. These impact job roles, wages, and responsibilities.

If you want to hire in Belgium, it's important to start by understanding where your role falls. White-collar employees typically work in roles like consulting, accounting, and management. Blue-collar employees handle manual tasks in industries like construction and manufacturing. Both groups require clear employment contracts, but the conditions can vary widely.

So, here’s what you need to know about managing payroll and complying with Belgian labor laws when hiring remote employees.

Types of employment contracts in Belgium

Belgium’s labor laws outline several types of employment contracts:

• Replacement contract: This contract specifies that employment is based on a set term, task, or project.

• Open-term contract: This is a permanent employment contract without a fixed end date.

• Fixed-term contract: The contract clearly defines the termination date from the beginning.

• Temporary contract: Like fixed-term contracts, these are non-permanent arrangements, but employers may extend them based on demand.

Termination procedures and severance pay

Belgium has structured rules for terminating employees. These rules vary depending on the type of contract and duration of employment.

For open-ended contracts, employers must follow a notice period or provide severance pay. The notice period for white-collar workers is based on their years of service. Blue-collar workers follow a different calculation method.

Fixed-term contracts generally end on the specified date. Early termination may require you to pay out compensation. Employees terminated without just cause may be eligible for severance, often equating to a few months' salary. However, this depends on the situation and length of service.

Minimum wage and working hours in Belgium

The minimum wage in Belgium for 2024 is €2,061.21 per month. In Belgium, typical working hours are generally from 9 AM to 5 PM, Monday to Friday, but these may vary. Working hours depend on the industry, company, and specific job, with some sectors having different working hours.

It's important to note that while the standard workday is typically 8 hours, starting and ending times may be flexible. According to Belgian labor law, night work is defined as any work period between 11:00 PM and 6:00 AM. Employers are generally prohibited from requiring employees to work more than 8 hours of night work per week.

Additionally, there are restrictions on the number of consecutive nights that an employee can work. An employee cannot work more than two consecutive nights without a rest period of at least 36 hours.

In some cases, employees can work longer days if their total weekly hours do not exceed 40.

Working hours and flexibility

The standard workweek in Belgium is set at 40 hours. But, many employers offer flexible working hours to accommodate different lifestyles and needs. Part-time work is also popular, with employees allowed to reduce their hours while retaining benefits.

Overtime pay

If you have employed your employees for at least three months, they can work overtime. They are entitled to overtime pay of 50% above their regular wage. Keep in mind that you are required to pay them double pay for work on Sundays or public holidays. Overtime hours are capped at 11 hours per day and 50 hours per week.

Payroll frequency

In Belgium, payroll is processed monthly, which means employees receive their wages once a month. This system is standard across most industries for both white-collar and blue-collar workers.

You should provide detailed payslips along with employee’s salaries. These payslips outline gross wages, social security contributions, taxes, and other deductions. In some sectors, you may also offer advance payments or bonuses. This depends on collective agreements or company policies.

Employee benefits and perks

In addition to wages, Belgium employees have a range of perks that improve their compensation packages. Common benefits include meal vouchers, eco vouchers, and company cars. These perks are partially tax-exempt, making them attractive for both employers and employees.

Employees may also receive supplementary health insurance, group pension plans, and paid time off. Some companies offer profit-sharing schemes or end-of-year bonuses as well.

Public holidays in Belgium

Belgium recognizes the following public holidays, and you should be mindful of them as well when hiring in Belgium:

• New Year’s Day (January 1)

• Easter Monday (April 2)

• Labor Day (May 1)

• Ascension Day (May 10)

• Pentecost (Monday after Pentecost)

• Belgian National Day (July 21)

• Assumption of Mary (August 15)

• All Saints’ Day (November 1)

• Armistice Day (November 11)

• Christmas Day (December 25)

Tax compliance in Belgium

As an employer, you must deduct withholding taxes from employee salaries. You must also remit them to tax authorities either monthly or quarterly. To ensure transparency, employees receive annual tax slips as part of the process. Resident employees file tax returns by June 30, while non-residents have until September 30. Electronic filing may alter these deadlines.

Belgium’s income tax rates are progressive and range from 0% to 55%, depending on the employee’s income. Corporations faced a 33.99% tax rate for 2023, while tax incentives and deductions are also available.

Paid leave in Belgium

Employees who worked the previous year are entitled to 20 days (or four weeks) of paid leave. White-collar workers receive holiday pay directly from their employer. On the other hand, blue-collar workers receive theirs through a social security fund.

In Belgium, employees are generally entitled to paid sick leave. The specifics can vary depending on industry and collective bargaining agreements. Typically, your employees can take up to 90 days of sick leave each year.

Paid sick leave typically begins after a waiting period of one or two days. Employees must provide you with a medical certificate to qualify for sick leave. The amount of sick pay varies based on the employee’s length of service and collective bargaining agreements. It is usually calculated as a percentage of their regular salary. For those facing long-term illnesses, additional benefits or specific regulations may apply

Maternity and paternity leave

Belgium offers generous maternity leave benefits, with mothers entitled to 15 weeks (or 3 ½ months) of paid leave. During the first 90 days of maternity leave, mothers in Belgium receive 90% of their average earnings, capped at a maximum daily amount. Following this initial period, they may qualify for continued maternity pay for a limited time.

Fathers and co-parents are entitled to 15 days of paid paternity leave, which is compensated at 90% of their average payment.

Social security system in Belgium

Belgium’s social security system is comprehensive and covers many benefits. These are funded through contributions from both employers and employees. Social Security contributions are deducted from an employee’s salary. As an employer, you'd also contribute a percentage based on their payroll.

The social security system finances several programs designed to provide support, such as:

Pensions

Employees contribute to the state pension system throughout their careers. Upon retirement, they are eligible to receive a pension based on the length of their employment and the amount they contributed.

There are two main types of pensions: a statutory pension and a supplementary pension. The statutory pension is guaranteed for everyone. The supplementary pension is provided by employers through pension plans.

Healthcare:

Belgium offers one of the best healthcare systems in Europe. It is partially funded by social security contributions. Employees and their dependents are entitled to healthcare services. Medical expenses are paid through health insurance funds, which are mandatory for all employees.

Unemployment benefits:

The social security system also supports employees who lose their jobs through no fault of their own. The amount of these benefits depends on the employee's contributions, previous wages, and family situation. To be eligible, employees must meet certain requirements, such as having worked for a minimum period before losing their job.

Family allowances:

Employees receive financial support to help cover the costs of raising children. They receive family allowances monthly.

Workplace accidents and occupational diseases:

Belgium’s social security system covers accidents at work. It also supports employees who develop occupational illnesses. Benefits include medical care, compensation for lost income, and disability payments.

Contribution rates and payment

As of 2023, the employer's contribution rate for social security stands at around 25% of the employee’s gross salary. The employees contribute approximately 13%. These rates are subject to change based on economic policies and government decisions. As an employer, you are responsible for calculating and paying these contributions. These are typically paid quarterly.

Payroll compliance audits

Payroll audits are common in Belgium to ensure compliance with labor laws and tax regulations. You must maintain detailed records of employee contracts, payslips, social security contributions, and tax payments. These records are crucial during audits, as any discrepancies can result in penalties.

Regular audits help companies avoid legal issues. They also ensure that you are fully compliant with Belgian payroll standards. You should stay informed about any regulatory updates that may affect payroll operations.

Final thoughts

Belgium is a fantastic location for business expansion, offering a balanced labor market and structured payroll compliance. However, navigating changing regulations and tax requirements can be complex. Having a global payroll partner can help you manage these challenges smoothly and stay compliant.

FAQs

What is the minimum wage in Belgium?

The minimum wage in Belgium for 2024 is €2,061.21 per month.

How does overtime pay work in Belgium?

After three months of employment, employees are eligible for overtime pay. They receive 50% extra for regular overtime and double pay for work on Sundays or holidays.

What are the key taxes employers need to consider in Belgium?

Employers must withhold income taxes, which range from 0% to 55% based on employee income.