Standard Professional Employer Organization/Employer of Record service is likely not legally compliant for full-time employees in Belgium. Companies that provide such services out-of-compliance may in fact be subject to potential criminal penalties. However, G-P has done the difficult legal work to provide an alternate solution by way of our partner companies that meets the requirements for compliance in Belgium.
Through our solution, we can enable customers to run payroll in Belgium while HR services, tax, and compliance management matters are lifted from their shoulders. As a Global employment expert, we manage employment contract best practices, statutory and market norm benefits, and employee expenses, as well as severance and termination if required. We also keep you apprised of changes to local employment laws in Belgium.
Your new employee is productive sooner, has a better hiring experience and is 100% dedicated to your team. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P’ solution allows you to harness the talent of the brightest people in more than 185 countries around the world, quickly and painlessly.
Belgium is a small country, sandwiched between the Netherlands and France, and also bordered by Germany, Luxembourg, and the North Sea. The country has a population of 11 million people and a land area roughly the size of Maryland, making it one of the most densely populated countries in Europe. Belgium is divided into three different cultures:
- The Dutch community of Flanders in the North
- The French community of Wallonia in the south
- The German community in the northeast region
The German community is the smallest. The capital, Brussels, is a bilingual community with French and Dutch residents, many of whom speak both languages.
Hiring in Belgium
Non EU citizens are required to have a work permit, which must be applied for by the employer. The employer must demonstrate that no local employee can be found to do the job.
In Belgium, most companies’ wages are fixed by collective agreements. The collective agreements are the result of negotiations between trade unions and employers. In addition, salaries in Belgium are indexed, meaning they are automatically increased each year based on the health index and linked to local cost of living increases.
When negotiating terms of an employment contract and offer letter with an employee in Belgium, it may be useful to keep the following standard benefits in Belgium in mind:
Employment Contracts in Belgium
It is legally required and best practice is to put a strong employment contract in place in Belgium which spells out the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in Belgium should always state the salary and any compensation amounts in Euro rather than a foreign currency.
Working Hours in Belgium
The standard workweek in Belgium can be no longer than 38 hours. After 38 hours, workers must be paid overtime. This generally does not apply if the employee is a senior executive or manager.
If work time limits are passed, compensation of overtime is compulsory.
- Overtime is paid at 150% of the normal payment or 200% for overtime on Sundays or Bank Holidays.
- Work time is limited to 11 hours per day and 50 hours per week, and every employee must be given at least one 24-hour rest period each week.
- Additionally, the employee has the option of working 40 hours per week with the allocation of 12 compensatory days of rest (over a one-year period) or 39 hours per week with the allocation of 6 compensatory rest days.
Holidays in Belgium
Belgium celebrates 10 public holidays for which employees are given the day off, including:
- New Year’s Day
- Easter Monday
- Labor Day/May Day
- Ascension Day
- Whit Monday
- Belgian National Day
- Assumption of Mary
- All Saints’ Day
- Armistice Day
- Christmas Day
If any of the public holidays fall on a weekend, the day becomes a floating holiday, which the employee is entitled to use like any vacation day.
Vacation Days in Belgium
Annual vacation leave in Belgium is provided all at once at the start of the year, based on the number of months worked in the previous year.
- Therefore, if an employee joins a company on January 1st, the employee will need to work for a full year before receiving any vacation days.
- As of 2012, the EU challenged this rule resulting in Belgium introducing “Subsidiary Holiday” rules. This allows a new employee to take holidays within their first year, and these days will be an advance on the double holiday allowance for the following year.
- Annual leave does not carry over to the next year if not used.
Office employees are entitled to a holiday (vacation) bonus of 1/12 of 92% of the gross salary for the month in which the holiday starts, multiplied by the number of months worked in the holiday credit year (previous calendar year).
Manual workers are entitled to 8% of 108% of their gross pay in the previous year paid by the holiday fund the employer is affiliated with.
- The manual worker will also be entitled to holiday pay which is 7.38% of 108% of gross pay for the previous year.
Belgium Sick Leave
Employees are entitled to sick leave and there is no maximum number days; however, each incidence must be accompanied by a doctor’s note.
Maternity/Paternity Leave in Belgium
Pregnant women are entitled to maternity leave and an allowance during that leave. There are two periods of maternity leave:
- Prenatal rest period, which may start 6 weeks before the presumed date of birth (at least 1 week must be taken before the baby due date)
- Postnatal rest period, which is a minimum period of 9 weeks or more if the prenatal rest lasted less than 6 weeks.
A maternity fee is mandatory for the birth of every child and the amount of the maternity fee depends on the child’s rank in the family. The highest amount is for the firstborn child.
Male employees have the right to paternity leave for 20 days. These days can be taken separately, consecutively, or split into 30 half-days, but must be used within four months of the birth.
Health Insurance in Belgium
Health insurance is provided through the national system. Employees are legally required to register with a health insurance fund in order to be entitled to health insurance.
Belgium Supplementary Benefits
Some employers also offer a variable profit sharing or performance-related bonus whereby the company pays an annual sum (usually at the end of the year). The amount of the bonus depends on the company’s overall performance and may be calculated as a percentage of each employee’s annual or monthly salary over the period.
Some companies provide benefits such as private school fees or car allowances. These additional benefits are usually taxable and should be considered when calculating an employee’s net take-home pay. For customers using our solution, we suggest providing an allowance or a gross salary inclusive of all of these costs, or a base salary plus allowances as appropriate.
Stock options are often requested by executives working for US technology companies in Belgium. Unlike most countries, Belgium taxes on the grant of an option or when the offer is communicated to the employee. The employee then has a period of 60 days to accept or reject the option. Issuing options to employees in Belgium is complex and they are subject to tax; most US companies prefer to offer cash bonuses tied to profitability rather than stock options. G-P cannot permit customers to issue stock options to designated managers hired through our solution in Belgium.
Generally, we recommend budgeting 35% as benefits cost on top of the gross salary to allocate the total employer’s cost including benefits in Belgium.
This information is provided as generally accepted information and is not intended as advisory services.
Most employers pay a 13th-month bonus to their employees and a few even add a half of a 14thmonth’s pay to that, typically payable at the end of the year.
- In the first and last year of employment, the 13th-month bonus is paid pro-rata, assuming the employee doesn’t work a full calendar year.
Termination/Severance in Belgium
On January 1, 2014, probationary periods were abolished, except for temporary and student contracts.
Under the new dismissal rules, effective January 1, 2014, notice periods are measured in weeks, based on years of service.
- The minimum notice period (for the first 3 months of service) is one week for resignation and two weeks for dismissal.
- By the 5th year of employment, the notice period is 7 weeks and 15 weeks, respectively.
- The maximum notice period in case of resignation is 13 weeks (with the 9thyear of service).
- There is no maximum notice for dismissal.
- After 5 years, the notice period increases by three weeks per year of service until it reaches 63 weeks after 21 years, increasing thereafter by one week per year of service.
- The notice period starts on the Monday following notification.
- In case of a termination, these notice periods are often paid out, and as such, we recommend accruing for termination costs throughout the tenure of employment.
- In case of dismissal by the employer, an employee who has found another job may terminate the employment contract with a shorter notice period (referred to as the “counter-notice”).
- Furthermore, employers must offer outplacement services to all dismissed employees with a notice period of 30 weeks or more.
Paying Taxes in Belgium
- Employees pay progressive income tax in Belgium. As of 2022, the top rate is 50 percent and starts at a salary level of € 42,370.
- Employers and employees must pay contributions to the Belgian social security system. The amount of the contributions is 13.07% of employees’ gross income for employees, approximately 27% for employers, both uncapped.
Establishing a branch office or subsidiary in Belgium to engage a small team is time-consuming, expensive and complex. Belgium labor law has strong worker protections, requiring great attention to detail and an understanding of local best practices. G-P helps make it painless and easy to expand into Belgium. We can help you hire your candidate of choice, handle HR matters and payroll, and ensure that you’re in compliance with local laws, without the burden of setting up your own foreign branch office or subsidiary. Our Belgium employment solution provides you peace of mind so that you can focus on running your company.