Your Payroll Administration – Q4 2025

As the year draws to a close, we have gathered the most important updates and practical considerations to ensure your payroll administration is fully prepared for a smooth start to 2026.

Public Holidays and Collective Leave

Substitute Public Holidays

When a public holiday falls on a Sunday or a day when work is not normally performed (usually a Saturday), it must be replaced by another day — the so-called “substitute holiday.” According to the general rule, this is the next regular working day.

However, employers may choose to determine substitute holidays at company level through a collective agreement, provided that employees are informed no later than December 15^th of the previous year. Such an agreement can be organised in two ways:

• All substitute holidays can be set in advance for all employees on specific dates, or
• Employees can be given the freedom to decide individually when tot take the substitute day, as long as it falls within the same calendar year.

If no collective agreement is reached, the general rule automatically applies, and the next regular working day becomes the substitute holiday.

In 2026, this applies to Saturday, 15 August (Assumption Day) — if Saturday is not a regular working day — and Sunday, 1 November (All Saints’ Day).

Collective Leave

An employer cannot unilaterally impose vacation days. If you wish to introduce a collective company closure, this must be included in the company’s work regulations. The closure dates must be communicated to employees by December 31st.

If you are introducing a collective closure for the first time, a special procedure for amending the work regulations must be followed. This includes a 15-day notice period during which employees can submit comments, after which the amendment must be registered with the Federal Public Service Employment (FOD WASO). In subsequent years, a simplified procedure applies: a notice is no longer required, and a simple notification to employees followed by registration with FOD WASO is sufficient.
We are, of course, available to guide you through the entire process.

Expense Reimbursements on Tax Forms

If an employee incurs expenses considered as business costs, you are required to reimburse them in the form of an expense allowance. This reimbursement can be based on actual receipts or through a reasonable flat-rate allowance. It is essential that the same cost is never reimbursed twice — it cannot be covered both through receipts and a lump-sum allowance.

Since 1 January 2022, employers are also legally required to report all expense reimbursements (both lump-sum and actual) with the exact amount on tax form 281.10. Therefore, please ensure you inform us before the end of the year about any allowances granted, so we can process them correctly.

Expected Indexations, Salary Increases and Wage Norm

As the year-end approaches, many employers begin their annual performance review meetings. These often go hand in hand with salary negotiations. During such discussions, it is crucial to consider automatic wage indexation, the statutory wage norm, and any other applicable adjustments.

Wage Indexations

The specific rules and procedures regarding wage indexations are determined at sectoral level. Below is an overview of expectations for some key sectors:

2025

• In the construction sector, wages are indexed quarterly. As the index figure for October 2025 is set at zero, there will be no mandatory wage increase at that time.

2026*

• Construction sector: +0,10% on 1 January 2026
• White-collar employees (Joint Committee 200): +1,95% on 1 January 2026
• Hospitality sector (Joint Committee 302): +2,00% on 1 January 2026

(*These are projections and may still change.)

Wage Norm

In addition to automatic indexations, employers must also respect the wage norm, which is set at 0% for 2025–2026. This means no additional wage increases beyond the automatic indexation are allowed.
Exceptions include seniority-based increases, normal promotions, or changes in job classification to which employees are entitled. Certain benefits, such as profit-sharing bonuses or collective bonus plans under CBA No. 90, may also still be granted.

Mileage Allowance

If your sector applies a quarterly-indexed mileage allowance, the maximum tax-free rate will slightly increase in Q4 2025. From 1 October to 31 December 2025, the tax-free allowance will be € 0,4312 per kilometer (subject to confirmation), for both commuting and business travel.
If your sector uses an annually indexed allowance, nothing changes in Q4 — the rate remains € 0,4449 per kilometer until 30 June 2026.

In some sectors, it is also possible to deviate from the standard arrangement or make your own choices. Please do not hesitate to contact us if you have any questions about the rules applicable to your sector.

Year-End Administration

(Year-End Bonus, Gifts, Sport and Culture Vouchers, Holiday Pay, and Leave and Overtime)

Year-End Bonus

In most sectors, employers are required to pay a year-end bonus. This is granted once a year in addition to the regular salary and is subject to social security contributions and a higher payroll tax. Conditions and calculation methods vary by sector.

The net amount of the year-end bonus is often lower than the usual monthly net salary. For this reason, some employers convert the bonus — partially or entirely — into alternative benefits with more favourable tax and social security treatment, such as a cafeteria plan. This allows employees to choose benefits tailored to their needs.
However, such conversions are not permitted in all sectors. Feel free to contact us to explore the options available in your specific sector.

Year-End Gifts

If you wish to give your employees a year-end gift, you can do so in the form of a present, a gift voucher, or a cash payment. These gifts are exempt from social security contributions and payroll tax and are considered tax-deductible business expenses if the following conditions are met:

• They are given on the occasion of St. Nicholas, Christmas, or New Year.
• They do not exceed €40 per employee per year, plus €40 per dependent child.
• They are granted collectively according to the same calculation method.

Sport and Culture Vouchers

You can also encourage employees to participate in sports or cultural activities by offering sport and culture vouchers. This can be a fun and original alternative to traditional year-end gifts. These vouchers are exempt from social security contributions, provided certain conditions are met.

Note that the government agreement foresees a gradual phasing-out of sport and culture vouchers in consultation with social partners. However, this agreement will only become binding once it is enshrined in legislation. As no legal changes have yet been made, there is currently no clear timeline for when and how this phase-out will occur.

Vacation and Overtime

Employees are required to take their statutory vacation days before the end of the vacation year. Since 2024, it has been possible, in exceptional circumstances, to carry over unused vacation days to the following year, provided they are used within 24 months. This option is only available if the employee was unable to take leave due to certain suspensions of the employment contract. These include (exhaustive list):

• Recognised occupational accidents or illnesses
• Other accidents or illnesses
• Maternity leave
• Paternity leave
• Prophylactic leave
• Birth leave
• Adoption leave
• Foster care leave
• Foster parental leave

The right to carry over applies with any employer the employee works for within those 24 months — not just the employer during the suspension. The vacation certificate must state any remaining entitlement to unused statutory vacation days. The holiday pay for these carried-over days must be paid by 31 December of the original vacation year.

Employers are responsible for ensuring that employees take their vacation days on time. If you cannot demonstrate that you have actively encouraged them to do so, you risk administrative or even criminal sanctions.

Additionally, employers must ensure that overtime worked by employees is, in principle, compensated within the same calendar year. However, there is one exception: if a busy year-end period makes it difficult to grant compensatory time off in time, up to 65 overtime hours may be carried over into the next calendar year. These hours must then be compensated within three months.

Mobility Budget Obligation

The Government Agreement provides that every employee who has a company car must be given the option to choose a mobility budget. As a result, offering a mobility budget will become a legal obligation for all employers who make company cars available to their employees. In addition, employers will be allowed to offer a mobility budget to employees who do not have a company car.

During negotiations on the so-called “Easter Agreement,” it was agreed that this framework will take effect on 1 January 2026. The decision to make use of the mobility budget will remain with the employee.

For employees without a company car, for whom a mobility budget could nevertheless be attractive, no concrete arrangement was made in the Easter Agreement. It therefore remains uncertain when this measure will be introduced.

Finally, the obligation to offer a mobility budget has not yet been enacted in law; the official legal text still needs to be published. We will keep you informed and share updates on the practical implementation and implications as soon as the official texts become available.

Government Agreement Updates

Extension of relance overtime until end of 2025

The 120 relance overtime hours will remain available until 31 December 2025. Initially, the legislation required that these hours be worked during the first half of 2025, but the Program Act of 18 July 2025 has extended this period until the end of the year, pending a possible expansion of the system.

The relance overtime hours offer several advantages:

• Employers are not required to pay an overtime premium.
• They do not entitle employees to compensatory rest and are not counted towards the internal overtime limit.
• They are exempt from social security contributions and taxes — meaning gross equals net. 

180 tax-friendly overtime hours also extended

The 180 tax-advantaged overtime hours will also remain in place until the end of 2025. The government intends to further expand this scheme in the future, with discussions scheduled for later this year.

Although an overtime premium still applies to these hours, they come with significant benefits: employees receive a tax reduction, and employers benefit from an exemption from withholding tax remittance.

New social security exemption for high salaries (from Q3 2025)

The Program Act introduces, from Q3 2025, an exemption from employer social security contributions on the portion of salaries exceeding a set threshold. This threshold is € 85.000 per quarter for 2025–2026 and will be lowered to € 67.500 per quarter from 2027 onwards.

The measure applies to all employers across all sectors and aims to keep Belgium attractive for highly paid knowledge jobs while discouraging the use of non-contributory compensation methods.

The exemption applies only to basic employer contributions (approximately 25% in the private sector). Other contributions, such as employee social security, remain due.

Only wages directly linked to work performed or guaranteed pay during absences are eligible. Other benefits, such as profit-sharing bonuses or supplementary pensions, fall outside the scope. Existing contribution reductions will remain but will only be calculated on salaries up to the threshold.

Foster care leave

A significant legal change regarding foster care leave was introduced with the Program Act published on 29 July 2025. Employees who have been officially appointed as foster parents are now entitled to apply for foster care leave.

The conditions are largely similar to those for standard parental leave, with a few specific provisions for foster care and long-term placements:

• Full-time employment: The employee must be working full-time as of the application date.
• Official appointment: The employee must be formally appointed as a foster parent by a court, a recognized foster care service, or a relevant community authority.
• Child’s residence: The child must reside with the same foster parent(s) in the same household for at least six months.
• Registration: The entitlement begins once the child is registered in the population or foreign residents register at the employee’s address.
• Duration: Up to four months of full-time leave (or the equivalent part-time) can be taken per child.
• Documentation: Required documentation must be submitted no later than the start date of the leave.

Final end of early retirement (SWT)

From 1 July 2025, no new entries into the early retirement scheme (SWT, often referred to as “bridging pension”) will be possible. As previously announced in the government agreement, the Royal Decree formalizing the termination has now been published. Only medical SWT will remain available.

What this means for employers:

Retention under existing CBA’s until 30 June 2025:

To avoid legal uncertainty, social partners advised ending SWT only after current national collective agreements expire. Agreements such as CBA Nos. 143, 166, 167, and 169 remain valid until 30 June 2025.

For the exceptional systems covered by these CBA’s no new agreements were made.

• Employees dismissed on or before 30 June 2025 will retain their right to SWT.
• Employees dismissed after that date will no longer qualify.
• An exception remains for medical SWT, extended by CBA No. 173 until 31 December 2025.

General Scheme:

Employees aged 62 or older with 40 years of career service could previously enter SWT upon dismissal under CBA No. 17, which has an unlimited duration. However, following the Royal Decree on phasing out the system (published 15 September 2025), eligibility now depends on strict cumulative conditions:

• The employee must be dismissed before 1 April 2025.
• They must meet the age requirement by 30 June 2025.
• They must have completed 40 years of professional service by the end of the employment contract.

Employees dismissed after 1 April 2025 will no longer be eligible to SWT.

Employees dismissed on or after 1 July 2025 will no longer meet the conditions, except those with disabilities or severe work-related health issues.

Unemployment entitlement after voluntary resignation

From 1 March 2026, employees will be able to resign once during their career and still receive temporary unemployment benefits, provided they meet strict conditions. Introduced by the Summer 2025 Program Act, this measure aims to offer more career flexibility without immediate financial hardship.

Key points:

• One-time and temporary: The entitlement applies only once and for a maximum of six months, depending on accrued rights.
• Eligibility: At least 3,120 workdays (or equivalent days) must have been accumulated.
• Extension: Employees who start and complete training for a shortage occupation within 3 months may extend the benefit by an additional 6 months (maximum of 12 months total).
• Irrevocable: The application must be submitted within 30 days of the written decision from the unemployment office.

This reform is intended to encourage targeted retraining and help address labour market shortages.

Meal Vouchers – employer contribution increase from 2026

The Arizona Government Agreement (January 2025) introduced several key measures on meal vouchers, including two € 2 increases to the employer contribution, greater tax deductibility, and expanded usage options.

On 18 July 2025, the Council of Ministers approved a draft Royal Decree raising the maximum employer contribution from € 6,91 to € 8,91 per voucher starting 1 January 2026.

Current situation:

• Meal vouchers currently have a nominal value of € 8 (€6,91 employer contribution + €1,09 employee contribution).
• Employers can deduct € 2 per voucher for tax purposes.
• Meal vouchers remain attractive because they are exempt from social security and withholding tax if certain conditions are met.

What to know about the increase:

• The legislator only sets the maximum amount eligible for tax and social exemptions. Currently, there are no sectoral rules obliging employers to grant the maximum amount.
• The increase is not automatic — existing agreements (collective or individual) must be updated.
• The increase currently falls under the 0% wage norm (2025–2026). A temporary exemption for 2026 is expected but not yet confirmed.
• Some elements remain uncertain, including tax deductibility, extended usage, and final social security treatment.

Recommendation:

Wait for the outcome of sectoral agreements and the official publication of legislation before making changes in your organisation.

FLA Registration deadline postponed again – What you need to know

The deadline for registering training in the FLA tool has been postponed multiple times. Initially set for 30 November 2024, it was later extended to 1 April 2025.

In February 2025, the federal government announced that the FLA tool would be abolished and replaced with a more streamlined system. However, legislation has not yet been enacted.

Because the reform will not be ready in time, the deadline was pushed back again to 1 September 2025, and now once more to 1 January 2026.

Do not be misled — employer training obligations remain fully in force. Individual training rights, training plans, and sector-specific reporting requirements are still applicable. We therefore recommend continuing to record training internally within your organisation until further notice.