Your payroll administration – Q4.2024

In the meantime, the fourth quarter has started. What does this mean for your payroll administration? We list the details below. 

Holidays and holiday pay 

Employees are obligated to take their statutory holidays before the end of the holiday year. From 2024, leave can be carried over to the following year in exceptional cases, provided it is taken within 24 months. This is allowed only if the employee could not take leave due to certain suspensions of the employment agreement. It concerns the following suspensions (exhaustive list):  

• occupational accident or occupational illness;  

• non-work-related accident or illness (private life);  

• maternity leave;  

• leave resulting from the conversion of maternity rest in the event of the mother’s death or hospitalisation;  

• birth leave;  

• adoption leave;  

• prophylactic leave and prophylactic breastfeeding leave;  

• foster care leave;  

• foster parent leave. 

The right to defer applies to any employer where the employee works within those 24 months, not just the employer of the moment of suspension. The holiday attestation must state that there is still entitlement to unused statutory holidays. Holiday pay for days carried over must be paid by 31 December of the holiday year. Employers must ensure that holidays are taken on time. If you cannot prove that you reminded your employees to do so, administrative or criminal sanctions are possible. 

Settlement of holiday pay from 2024: (condensed) final settlement in December 

Employees accrue their holidays in the year preceding the year in which they can enjoy these accrued entitlements. When a white-collar worker leaves the organisation, he has accrued holidays with his previous employer, which he can only take with his new employer. Therefore, the previous employer pays out, among other things, the salary for the accrued holidays on leaving, which may be offset by the new employer against the salary for the holidays that were not accrued with him, but which he does owe. 

Until 2023, settlement of both single and double holiday pay was done in one go, usually in the month in which double holiday pay was paid. This could result in significantly lower or even no pay for white-collar workers in that month. To prevent white-collar workers being surprised by an unexpectedly low wage payment during the settlement month, changes to the settlement method have been implemented from 2024. 

From 2024, single holiday pay will be settled in two steps. The new employer will only pay 10% of the gross daily wage for days on which the employee takes a statutory holiday (accrued with the previous employer). The final settlement follows in December. If too much has been deducted during the holiday year, and therefore too little single holiday pay has been paid, the employer will supplement the difference. If too little has been deducted and thus too much single holiday pay has been paid, the employer can deduct the overpayment from the employee’s pay in December. This overpaid single holiday pay is considered an advance on wages that can be set off against the monthly wage payment in December. 

End-of-year bonus 

At the end of the year, the payment of an end-of-year bonus is mandatory in most sectors. This bonus is subject to social security contributions and a higher wage withholding tax and is paid once a year on top of the regular salary. The conditions and method of calculation of the end-of-year bonus differ from sector to sector. 

In most cases, the net end-of-year bonus is lower than the regular net monthly salary. In practice, we therefore see that the traditional end-of-year bonus is exchanged (whether partially or not) for other benefits that enjoy more favourable parafiscal treatment (e.g. as part of a so-called cafeteria plan). This allows employees to choose their own benefits. However, please note that the conversion of the end-of-year bonus is not possible in every sector. Feel free to contact us to enquire about the possibilities within your sector. 

Submitting of training plans 

The labour deal requires employers with at least 20 employees to draw up a training plan every year and no later than 31 March. Within a month of the training plan coming into force, the employer submits a copy of it to the FPS ELSD. As the royal decree regulating the submission has not yet been approved, this obligation to submit did not apply for the time being. On 2 September, the royal decree regulating the submission was published. From that date, employers have six months to submit the (anonymised) training plans of 2023 and 2024 to the FPS ELSD via transfer.werk.belgie.be. If it is not possible to log in to this government website, we as a service provider can submit your training plan. 

Uncertainty surrounding the Federal Learning Account: Will the obligation remain in force? 

“We are scrapping the Federal Learning Account and the generic rule of five training days.” That was said in Bart De Wever’s leaked Super note. The Super note is a comprehensive policy document that suggests possible reforms as part of the federal government negotiations. Although it suggests that the FLA will be abolished, the obligations concerning the FLA will remain in force as long as there is no new government. By 1 December 2024, all courses taken from 1 January 2024 to 30 September 2024 must be registered in the tool. 

Since the continued existence of the FLA is unclear, consider not following up on the obligations concerning the FLA for the time being until there is more clarity. 

The sanction procedure consists initially of a warning, after which you are given 30 calendar days to get your company in order. If you default, you will be placed on a public ‘blacklist’ which will be shared with the Joint Committee, the National Labour Council (NLC) and the Federal Public Service Employment, Labour and Social Dialogue (FPS ELSD), and which will also be published as a “naming & shaming” list. 

We are closely monitoring the situation and will keep you informed of further developments. 

Index prognosis 

As the end of the year approaches, many employers are starting performance reviews. Often, such reviews go hand in hand with salary negotiations. During these negotiations, it is important to take into account the automatic wage indexation system. The concrete provisions on this are determined at the level of your sector. We list some sectors below:  

2024 

• In the construction sector, wages are indexed quarterly. On 1/10/2024, scale wages were indexed by 0.70444%. Real wages increase by the same amount. In the self-employed retail sector (JC 201), both real wages and scale wages were indexed by 2% on 01/10/2024. 

2025* 

• In the construction sector, wages are expected to be indexed by 0.69% on 01/01/2025. 

• In the auxiliary sector for white-collar workers (JC 200), an indexation of 3.62% is expected on 01/01/2025. 

• In the hospitality sector (JC 302), an indexation of 3.65% is expected on 01/01/2025. 

Besides the automatic wage indexation, there are many other things you need to consider during salary negotiations. Want to know how best to approach these negotiations? During our Lunch & Learn on 13 November 2024, we will discuss several valuable insights and remuneration options. 

 

* these are merely prognoses, so these percentages may still change. 

 

End-of-year gifts 

If you want to give your employees an end-of-year gift, you can choose a gift, gift voucher or cash. End-of-year gifts are exempt from social security contributions and wage withholding tax and are accepted as professional expenses provided the following conditions are met:  

• they are given on the occasion of St Nicholas, Christmas or New Year;  

• they amount to a maximum of 40 euro per employee per year (plus 40 euro per dependent child of the employee in question);  

• they are granted collectively according to the same method of calculation. 

(Replacement) public holidays 

When a public holiday coincides with a Sunday or a day on which no work is usually done in the company (usually Saturday), it is replaced, according to the general rule, by the next working day, the so-called ‘replacement public holiday’. However, replacement holidays can also be determined at company level, provided employees are informed before 15 December of the previous year, or by individual agreement between employee and employer. Thus, if nothing is determined at company level, the public holiday will be replaced by the next working day. 

In 2025, this concerns Saturday 1 November (All Saints’ Day), insofar as Saturday would not be a regular working day. 

Collective leave 

An employer may not unilaterally impose the scheduling of holidays. If you wish to introduce a collective closure period, this can be done through the work regulations. The dates of the closure must be communicated to employees by 31 December at the latest. If it is the first time you are introducing a collective closure, the special procedure for amending the work regulations must be followed (with 15 days of posting a notice in the company with the possibility of comments and registration afterwards with FPS ELSD). Afterwards, a simplified procedure applies (no 15-day posting required, but merely notification to employees and registration with FPS ELSD). Of course, we can help you with this. 

Renew your agreement for extra overtime in time 

Until 30 June 2025, your employees have the option of working up to 120 regular voluntary overtime hours and 120 relance overtime hours per calendar year, with a maximum of 220 hours for both types of overtime combined*. 

You read it correctly, the employee chooses whether or not to commit to performing these overtime hours when the employer would need them. The employee commits himself for six months at a time. Moreover, he must confirm this commitment in writing. If the written agreement was last given/renewed in June, bear in mind that it is almost time for a new agreement. 

*We expect this measure to be extended beyond 1 July 2025, we will inform you when we have more information. 

Indexation of mileage allowances 

If the quarterly indexed mileage allowance is applied in your sector, in the fourth quarter the maximum exempted amount of the mileage allowance for both commuting and professional travel will decrease slightly. From 1 October to 31 December, the maximum exempted amount will be €0.4293 per kilometre, while it was still €0.4297 per kilometre in the third quarter. 

In case your sector works with the annually indexed mileage allowance, nothing will change for you in the fourth quarter, as this annual allowance will remain unchanged at €0.4415 per kilometre until 30 June 2025. 

Some sectors also leave you the choice, contact us if you have any questions about the scheme in force in the sector applicable to you. 

Expenses on tax form 

If your employee incurs expenses that are considered professional costs of the employer, you must reimburse these costs in the form of an expense allowance. Reimbursements of these ‘costs proper to the employer’ can be made on the basis of actual supporting documents (e.g. receipts) or via a justified flat-rate allowance (note that an expense can never be reimbursed twice, i.e. both via reimbursement of the actual cost on the basis of supporting documents and via payment of a flat-rate allowance). 

Since 1 January 2022, you are obligated to record all expense allowances (both flat-rate allowances, and those based on actual supporting documents), indicating their amount, on tax form 281.10. So be sure not to forget to inform us about these expenses before the end of the year. 

New calendar year, new A1?! 

When employees are active in both Belgium and another EU Member State, it is important to keep a close track of what percentage of their work takes place in each country. This division determines where social security contributions and taxes must be paid. 

According to European coordination rules, the employee’s country of residence remains responsible for social security as long as the employee performs at least 25% of his work in that country. If the employee performs less than 25% of his work in the country of residence, the location of the registered office of the employer(s) is considered. The employee is fully subject to the social security legislation of one Member State. 

To confirm that the employee is subject to social security in the designated Member State, and to avoid having to pay social contributions in the other Member State as well, an A1 declaration must be requested from the competent authority of the country of residence (in Belgium, this is the NSSO). This A1 declaration must be renewed in time, and you must inform the authorities in time of any changes in the division of work between the different countries. Often, the validity of the A1 declaration will coincide with a calendar year. Therefore, check in time whether any A1 declarations need to be renewed as of 1 January next year. 

Van Havermaet HR Services expands its offering and becomes your partner in Talent Management 

Attracting and retaining talent is essential for any SME, growth company or family business. In addition to a clear vision and strategy, your policy around talent must seamlessly follow. After all, your company’s success depends on the people who shape it. 

A talent-focused policy starts with the right management and key people. These individuals must support and develop your company’s strategy. It is crucial to select them well and ensure that they grow with your organisation. 

Van Havermaet HR Services expands its offering and becomes your partner in Talent Management. 

With Jorinde Gijbels, you can count on expert support in finding management and executive profiles, key people, and the right hand of the managing director for growth companies. She invests time to thoroughly understand your organisation and culture and uses her extensive experience and network to find the perfect match. She also offers expertise in corporate governance by finding the right candidates for Boards of Advisors and Boards of Directors. 

Sophie Bijnens maps talent and potential with targeted assessment and development centres. She analyses the strengths and growth opportunities of your management and directors and offers concrete tools to utilise their potential. She also focuses on the next generation in family businesses using Next Gen Essentials, a specially developed competence model for family businesses.