Introduction to Payroll in Belgium
Payroll practices can be standardized by utilizing several teams that keep track of changes in labor laws, monitor employee count and hours worked, and stay on top of rules and regulations involving deductions and benefits. Skuad can keep track of:
- Corporate taxes, income taxes, and regional taxes
- Pensions, healthcare, and unemployment
- Holidays, vacations, and other leave
- Employer contributions, withholding, and more
If you are hiring remote employees in Belgium, you need the help of Skuad, a trusted Belgium payroll company. You can be sure you will be compliant with laws involving labor regulations, local tax codes, benefits, and other legislation.
Payroll Process in Belgium
Aside from minor differences, the Belgium payroll process is similar to how it works in most countries, which is separated into three distinct phases.
During the pre-payroll phase, your business focuses on being prepared. You’ll need to gather documentation, confirm HR policies, and generally ensure your business is ready to begin paying employees while staying compliant.
Setting up the organization
Set up clear policies for your company to include:
Your company should have a registered business number associated with your PAN and TAN, which will be needed to send out things like tax forms and payslips.
Requirements can change across locations, even if they’re all within the same country. Document location-specific policies for each workplace.
For attendance, you'll need to document timesheets, doctor’s notices for sick leave, or supervisor permission for requested time off.
Employees are legally entitled to some categories of leave in Belgium, including parental leave, sick leave, and paid holidays. Belgians who work five days a week and have worked for a company for at least one year are entitled to 20 days of paid annual leave in addition to 10 public holidays, which are paid days off.
Belgium’s labor laws have specific requirements not only around salary and leave, but others as well. Be sure to factor in statutory components like bonuses, pension funds, and any other applicable benefits.
When structuring compensation packages, make sure to be compliant with Belgian labor laws, such as minimum wage. A payroll provider in Belgium such as Skuad can ensure compliance.
The typical payroll schedule in Belgium is monthly, most commonly at the end of the month. The pay year is divided into 13.92 months to provide extra income toward the end of the year.
Gather information like employees’ DOJ, designation, department, job titles, and how they’ll receive their pay.
Payroll calculation phase
The main component of the process is the Belgium payroll calculation phase. Partnering with a payroll provider in Belgium can make this process easier.
Once payroll calculation is complete, you can send your bank advice to your corporate bank for salary disbursements.
After payments have been sent out, make sure to balance the accounts.
Payroll reporting and compliance
Deductions such as employee and employer contributions to social security must be withdrawn and remitted to the respective government agency. Due dates may vary depending on the agency. To ensure full compliance with laws and that your payroll is taken care of, get a Skuad demo today.
Payroll Management in Belgium
Payroll can be automated by a payroll agency in Belgium to ensure prompt payment to employees, as well as automatic deductions such as social security, and remittance to the appropriate government agency. This way, your company will be fully compliant.
Payroll Processing Company in Belgium
If you’re looking for Belgium payroll providers, contact Skuad.
Payroll Compliance in Belgium
Part of the process of managing payroll is making sure you are compliant with labor laws and benefits regulations:
- Belgium payroll taxes
- Minimum wage
- Normal work hours and overtime
- Leave entitlements
- National holidays
- Termination laws
If you partner with a Belgium payroll provider like Skuad, all of the compliance is taken care of to make sure you are 100% compliant with all laws both foreign and domestic.
Payroll Components in Belgium
Payroll is the compensation for hours an employee worked, deductions, and employer contributions. If you partner with payroll outsourcing in Belgium, you can be sure all components will be handled by one of the Belgium payroll providers.
The minimum wage in Belgium as of 2022 is:
- €1,691.40 per month for workers aged 18 and older
- €1,736.28 per month for workers who are 19 or older and have at least six months’ seniority
- €1,756.23 per month for workers who are at least 20 years old and have twelve months’ seniority
The working week in Belgium is 38 hours with a maximum of nine hours a day or 45 hours a week, though exceptions can be made up to 11 hours a day or 50 hours a week. Sunday is a mandatory day of rest, but if an employee works on Sunday, a compensatory day off is given to the employee which can be taken within six days. If a work shift lasts for at least five hours, an hour break must be provided.
Employees are entitled to overtime pay if they work beyond the normal expected hours for preparatory work, finishing jobs, loading or unloading of merchandise, urgent tasks or working with a material that deteriorates quickly, or an unforeseen increase in the amount of work that needs to be done. They must receive:
- At least one and a half their normal pay if they work beyond the normal working hours on a given day.
- At least two times normal wages for working Sundays and holidays.
The maximum amount of overtime an employee can work is 78 hours for three months or 91 hours for a year. Belgian law allows for an employee to do voluntary overtime but they would not be entitled to compensated time off. The maximum amount of voluntary overtime is 11 hours a day, and 50 hours a week.
Belgium Payroll taxes
Some taxes are deducted from employee pay, such as income tax, while others are paid by both the employee and the company, such as social security.
The income tax rate in Belgium is a progressive rate based on income:
- Up to EUR 13,870: 25%
- EUR 13,870 to EUR 24,480: 40%
- EUR 24,480 to EUR 42,370: 45%
- EUR 42,370 and over: 50%
Social security is paid from taxes which are paid by both employee and employer. The employee's share is 13.07% and the employer's share is 27%. Foreign employees working in Belgium who pay into their home country's social security may be exempt.
A special social security payment is also deducted from the net salary. It is based on a calculation of net family taxable income between EUR 9.03 and EUR 60.94 per month, with a maximum family payment of EUR 731.28 per year.
Employees in Belgium are entitled to sick leave as long as a doctor’s note is provided, or for remuneration of what was paid into social insurance the month before taking the leave.
Maternity leave is 15 weeks, or up to 19 weeks if multiple babies are born. This will be gradually increased to 20 days by 2023. The first three days are paid by the employer while the remaining is paid by social security. If the mother is hospitalized or dies, the father may take the remaining paid leave days. This leave can be taken at any time four months after birth and does not have to be taken all at once.
If an employee adopts a minor child, they are entitled to six weeks of adoption leave, taken within two months of the registration of the child in the population register.
There are 10 national holidays in a year in Belgium for which employees must be given paid time off:
- January 1, New Year’s Day
- Easter Monday
- May 1, Labor Day
- May 26, 2022, Ascension
- June 5, 2022, Pentecost
- July 21, Independence Day
- August 15, Assumption of Our Lady
- November 1, All Saints’ Day
- November 11, Armistice Day
- December 25, Christmas
When an employee has been terminated, the employer must give advance notice within the statutory limits, ranging from three days to 45 days notice, depending on contract type and tenure with the business.
Severance pay is due to employees in certain circumstances, which would be equal to one-half of one month’s wages for each year employed with the firm. For calculating the salary, take the average of the preceding six month’s wages. For employees who have been terminated and have worked for the employer for 12 months or more, severance is due. Some exceptions include brief tenure at the company, dismissal for violation of labor rules, deportation, retirement, and more.
When dismissing a Belgian employee, always make a record of breach of rules, send notice to the employee, hold a meeting about the potential dismissal of the employee, and keep meeting records. Using a payroll company in Belgium can help you with all of these payroll components.
Begin Payroll Services in Belgium
Paying independent contractors and employees in Belgium can be easy with the right management system. If you are ready to hire someone and pay them with one-click payroll services in Belgium, stay compliant, and save time and money, call Skuad and ask for a demo today.
Note about the current currency exchange rate: as of May 2022, 1 United States dollar is .91 Euros