Doing Business in Belgium: Does an EOR Make Sense?

Belgium shines as a business hub, with Antwerp’s port and Brussels’ EU base fueling trade, logistics, and R&D. Its multilingual, skilled workforce and expatriate tax incentives attract employers, but strict labor laws and collective agreements can complicate hiring, taxes, and payroll.  

Whether hiring directly or using an Employer of Record (EOR) like Knit, this guide gives you the insight and tools needed to hire compliantly in Belgium.

Taxes and Social Contributions

Belgium’s strong tax and social contribution system funds extensive social benefits like healthcare, pensions, and unemployment support.  

Social Security Contributions (Employer)

Contributions, managed by the National Social Security Office (ONSS/RSZ), typically range from 22% to 35% of an employee’s gross salary, depending on worker classification (white-collar vs. blue-collar), industry, region, and company size. These contributions are paid quarterly and include the following components:

Can Employers Cut These Costs?

• SME Reductions: Companies with fewer than 50 employees may qualify for a 25% reduction on contributions for the first five hires, particularly in Flanders and Wallonia, lowering costs by €1,000–€2,000 per employee annually. ‍
• Young Workers: Hiring employees under 26 can reduce contributions by up to 50% for the first year, incentivizing youth employment in sectors like tech or logistics. ‍
• R&D Incentives: Employers in research-intensive industries can claim partial payroll tax exemptions for researchers, reducing withholding taxes by up to 80%, a significant saving for innovation-driven firms.

Compliance Considerations

Employers must register with the ONSS within 90 days of hiring and submit accurate quarterly filings. Errors, such as miscalculating contributions or misclassifying workers, can lead to audits or fines ranging from €800 to €18,000. Sector-specific collective agreements, covering over 90% of Belgian workers, may mandate additional contributions, such as a 13th-month salary or training levies, increasing costs by 5–10%. An EOR can navigate these complexities, ensuring timely filings and compliance with regional and sectoral requirements.

Social Security Contributions (Employee)

Employees contribute 13.07% of their gross salary to social security, deducted automatically by the employer and remitted to the ONSS. This contribution funds the same benefits as employer contributions, ensuring comprehensive coverage.  

Contributions are capped for high earners, with an annual ceiling of approximately €74,693 for pensions and €37,346 for unemployment benefits.  

Example Calculation (€4,000/month gross salary):

• Total contribution: €4,000 × 13.07% = €522.80 ‍
• Net salary (before income tax): €4,000 – €522.80 = €3,477.20

Non-resident employees working temporarily in Belgium may face a 7% flat withholding tax on benefits like bonuses or allowances, requiring employers to adjust payroll calculations. Double taxation agreements (DTAs) with countries like the US, Canada, or Japan can mitigate tax burdens, potentially securing refunds for non-residents.  

Personal Income Tax

Employees in Belgium are subject to a progressive federal income tax on their taxable income, calculated as gross salary minus social security contributions and allowable deductions.  

Most municipalities impose a surcharge of 6–8% on the federal income tax amount, varying by locality (e.g., 7% in Brussels, 8% in Antwerp or Ghent).  

Deductions and Tax Incentives

• Standard Deductions: Include social security contributions and a professional expense allowance (~€5,000/year, or 10% of income up to a cap). ‍
• Expatriate Special Tax Regime: Foreign executives, researchers, or highly skilled workers can benefit from a partial exemption, excluding up to €90,000 in allowances (e.g., relocation, travel, or housing costs) from taxable income. This reduces effective tax rates by 15–20%. ‍
• Tax Credits: Available for dependents, childcare expenses, or energy-efficient investments, further lowering tax liabilities.

Belgium’s Payroll Incentives for International Employers

Belgium’s tax and social contribution system offers several lesser-known advantages that international employers can leverage:

• Expatriate Tax Regime: The ability to exclude up to €90,000 in allowances for foreign talent makes Belgium a cost-effective destination for hiring executives or specialists, particularly in finance, tech, or the diamond trade. ‍
• R&D Payroll Exemptions: Up to 80% of withholding tax can be exempted for researchers, a boon for industries like biotechnology, chemicals, or renewable energy, where Belgium ranks among Europe’s leaders. ‍
• Antwerp’s Diamond Trade: Employing in this niche sector (handling 80% of global rough diamonds) involves unique payroll considerations, such as bonuses tied to trade cycles. ‍
• Remote Work Allowances: With 30% of Belgian employees working remotely, employers may need to budget for home office stipends (~€150/month).

Employment Contracts in Belgium

Employment contracts in Belgium are tightly regulated to protect workers while allowing flexible hiring. They must comply with labor laws, collective bargaining agreements (CBAs), and regional language rules. Written contracts are strongly advised, especially for fixed-term or part-time roles, to avoid legal disputes. Errors like missing clauses or using the wrong language can nullify a contract, often resulting in default indefinite terms favoring the employee.

Common Contract Types

Belgium offers a variety of contract types to suit different business needs, categorized by duration, purpose, and working hours.  

Mandatory Contract Elements

Written contracts must be provided within two months of employment start (or immediately for fixed-term/part-time contracts) and drafted in the appropriate regional language: Dutch (Flanders), French (Wallonia), German (German-speaking community), or bilingual (Dutch/French) in Brussels.  

Failure to use the correct language can render the contract null, defaulting to indefinite terms in the employee’s favor. Key elements include:

• Mutual Agreement: Evidence of consent between employer and employee, typically via signatures. ‍
• Job Description: Detailed role, responsibilities, and reporting structure. ‍
• Salary and Benefits: Gross salary, payment frequency, and benefits (e.g., 13th-month salary, meal vouchers of €8/day, health insurance). Must reference applicable CBAs. ‍
• Employer Authority: Clear indication of the employer’s right to direct work, including workplace policies. ‍
• Start Date and Duration: For fixed-term contracts, specify end date or project completion; for indefinite, note ongoing nature. ‍
• Working Hours and Schedule: Full-time (38 hours/week) or part-time, with daily/weekly hours and rest periods. ‍
• Workplace: Primary location or flexibility for remote work (~30% of employees work remotely part-time). ‍
• Termination Clauses: Notice periods per tenure or CBA, and conditions for dismissal. ‍
• CBA Reference: Identify the applicable joint committee, which sets minimum wages, bonuses, or overtime rules. ‍
• Language Clause: Confirm the contract’s language aligns with regional requirements.

Omitting these elements or using incorrect language risks contract invalidation, with courts imposing employee-favorable terms. Fines for non-compliance range from €400 to €4,000 per violation, and employees may claim back payments for omitted benefits.

Trial Periods

Since 2014, formal trial periods have been largely abolished in Belgium for most employment contracts, aligning with EU directives to prevent employer abuse. However, exceptions exist for specific contract types:

• Temporary (Interim) Contracts: Trial periods of 3–7 days, depending on contract length. Notice during this period is 1 day. ‍
• Student Contracts: Allow trial periods of up to 1 month, with a 3-day notice period. ‍
• Executive Contracts: Some CBAs for high-level roles permit “probation” clauses, but these are not legally trial periods and require standard notice.

For standard indefinite or fixed-term contracts, no trial period applies, but employers can assess performance during the initial employment phase, subject to statutory notice periods:

• Notice Periods (First 6 Months): 2 weeks for <3 months’ tenure, 4 weeks for 3–6 months, reducible by CBA or mutual agreement. ‍
• Performance Termination: Employers can dismiss employees during this period for underperformance, but must provide written justification and adhere to notice or severance pay.

Including an unauthorized trial period in a contract can lead to legal challenges, with employees entitled to full notice or severance.  

Language Requirements

Contracts must be drafted in the official language of the region where the employee works:

• Flanders: Dutch ‍
• Wallonia: French ‍
• German-Speaking Community: German ‍
• Brussels-Capital Region: Dutch or French, based on the employee’s preference or company policy

Non-compliance with language requirements can result in contract nullification, with courts enforcing indefinite terms and maximum benefits. Multilingual contracts (e.g., Dutch/French/English) are allowed in Brussels, but the official version must be in the employee’s regional language.  

Collective Bargaining Agreements (CBAs)

CBAs, negotiated by joint committees play a critical role in shaping contract terms. Covering over 90% of Belgian workers, CBAs set:

• Minimum Wages: Vary by sector and experience (e.g., €2,000–€3,500/month for white-collar roles in PC 200). ‍
• Benefits: Mandatory bonuses, extra holidays, or pension contributions. ‍
• Overtime and Hours: Rules for overtime pay or flexible schedules. ‍
• Notice Periods: Often shorter or longer than statutory defaults, depending on the sector.

Failing to incorporate CBA terms can lead to employee claims for unpaid benefits or fines of €800–€8,000 per violation.  

Payroll

Minimum Wage Standards

Belgium’s minimum wage framework ensures fair compensation across industries, balancing worker protections with economic competitiveness. The Guaranteed Average Minimum Monthly Income (GAMMI), set at the national level, serves as the baseline for private-sector employees aged 18 and over when no sectoral CBA applies. The GAMMI is €2,111.89 per month (gross) for a standard 38-hour workweek, equivalent to €12.82 per hour.

Youth and Intern Wages

Employees under 18 receive a percentage of the adult GAMMI or sectoral minimum, based on age:

• 16–17 years: 94% (e.g., €1,985.18/month for GAMMI). ‍
• 15 years: 70% (e.g., €1,478.32/month for GAMMI). Interns, typically hired under student contracts, must receive at least €751/month (gross), per, making them a cost-effective option for seasonal or entry-level roles.

Employers must pay at least the GAMMI or relevant CBA minimum wage. Non-compliance can lead to fines (€400–€4,000 per violation) or criminal penalties for repeated underpayment.  

Payroll Essentials

Pay Frequency

Belgium’s standard payroll cycle is monthly, with salaries paid on the last working day. Bi-weekly payments are rare and allowed only under specific CBAs. Any alternative schedule must be stated in the contract or CBA.

Most employees receive a taxed 13th-month bonus in December. Some CBAs also provide a half 14th-month payment, typically in summer and pro-rated for new hires.

Late payments can lead to 6% interest claims, compensation, and fines of €800–€8,000.

Payslips

Employers must provide detailed payslips with each salary payment, in paper or digital format (if employees consent). Payslips must include:

• Gross Pay: Base salary, overtime, bonuses, and allowances. ‍
• Hours Worked: Regular and overtime hours, with rates. ‍
• Deductions: Income tax (25–50%), employee social security contributions (13.07%), and other withholdings. ‍
• Net Pay: Amount credited to the employee’s bank account. ‍
• Additional Details: Employer/employee information, pay period, CBA reference, marital status (impacting taxes), and benefits in kind. ‍
• Double Holiday Pay: For white-collar workers, payslips in May or June may include double holiday pay (92% of gross monthly salary, including commissions or allowances), per.

Incomplete or inaccurate payslips can trigger audits and fines of €400–€4,000 per violation. Employers are also required to keep all payroll records, including payslips, for seven years.

Payment Method

Electronic bank transfers are the preferred and most common method for salary payments in Belgium, offering compliance with the Wage Protection Act. The net minimum wage (€1,950 for GAMMI) must be paid via bank transfer, while any amount above that may be paid in cash or in kind—though cash is rarely used due to administrative complexities.

Salary payments must align with the agreed payday stated in the employment contract, typically the last working day of the month. Delays or failure to pay minimum wages via bank transfer violate the Wage Protection Act and can result in fines (€800–€8,000) or employee claims.

Leave and Time Off

Employee leave in Belgium is governed by federal law and CBAs, which often provide additional benefits. Leave documents must follow regional language rules to avoid disputes. Violations—like denying leave or underpaying—can lead to fines (€400–€4,000) or employee claims.

Leave Types

Annual Leave

Based on the N-1 system, employees are entitled to a minimum of 20 paid days off per year (based on a 5-day workweek), or 24 days for those on a 6-day schedule. Many CBAs, especially in white-collar sectors like finance or tech, increase this to 25–30 days.

For part-time employees, annual leave is pro-rated based on their working hours—for example, someone working 20 hours per week would earn about 10 days of leave over a full year.

Employees without prior work history in Belgium, such as recent graduates or new arrivals, can access up to 4 weeks of European supplementary leave after three months of employment. This leave is initially paid by the employer and later reimbursed by social security.

White-collar employees receive their regular salary during leave, plus double holiday pay—typically 92% of their monthly salary (including commissions or allowances). For blue-collar workers, leave is funded through a holiday fund, with employers contributing 10.27% of gross annual salary. These employees receive both single (100%) and double (92%) holiday pay directly from the fund.

Denying leave or miscalculating double holiday pay breaches the Holidays Act and can result in fines of €800–€8,000 or claims for back pay.

Sick Leave

Belgium provides strong sick leave protections, with different rules for white-collar and blue-collar employees.

White-Collar Workers

• First 30 days: Employer pays 100% of the employee’s gross salary. ‍
• After 30 days: Social security covers 60% (capped at €153.92/day), with some CBAs—like PC 200—adding a 10–20% top-up.

Blue-Collar Workers

• Days 1–7: 100% of salary paid by the employer. ‍
• Days 8–14: 85.88% of salary, still paid by the employer. ‍
• After 14 days: Social security pays 60% (capped), with possible CBA supplements.

Medical Certificates
A doctor’s note is typically required within 1–3 days, depending on company policy or CBA (e.g., day 1 for PC 124 in construction).

Long-Term Illness

After one year of illness, employees may qualify for disability benefits covering 40–65% of their salary.

Maternity Leave

Mothers in Belgium are entitled to 15 weeks of paid maternity leave—up to 6 weeks before birth (with 1 week mandatory) and 9 weeks after birth (mandatory). For multiple births, this extends to 20 weeks (8 prenatal, 12 postnatal). Key features include:

• Pay: Mothers receive 82% of their salary (capped at €153.92/day) for the first 30 days, then 75% for the remainder. Payments are made through social security via health insurance funds. ‍
• Eligibility: Employees must be registered with a health fund and notify their employer 2–4 weeks before starting prenatal leave. ‍
• Job Protection: Employers are prohibited from terminating an employee during pregnancy and up to one month after returning from maternity leave.

Paternity/Co-Parent Leave

Fathers and co-parents (including same-sex partners) are entitled to 20 days of paid leave for births or adoptions, which must be taken within six months. Key features include:

• Pay: ‍
  
  • Days 1–3: 100% of salary, paid by the employer ‍
    
  • Days 4–20: 82% of salary (capped at €153.92/day), paid by social security through health insurance funds ‍
• Eligibility: Employees must notify their employer at least 10 days in advance and provide proof of birth or adoption. ‍
• Flexibility: Leave can be taken in full or half days, depending on the CBA or company agreement.

Parental Leave

Employees are entitled to up to 4 months of parental leave per child, which can be taken flexibly until the child turns 12.

• Parental Leave Options: ‍
  
  • Full-time: 4 months (can be taken all at once or in parts) ‍
  • Half-time: 8 months at 50% working hours ‍
  • ‍1/5th reduction: 20 months, typically one day off per week ‍
• Pay: Employees receive state benefits of €900–€1,100 per month for full-time leave, or pro-rated amounts. Some CBAs, like PC 200, may offer additional top-ups. ‍
• Eligibility: Employees must have worked at least 12 months in the past 15 months and provide one month’s notice to their employer. ‍
• Job Protection: Employees are protected from termination while on parental leave.

Statutory Holidays

Belgium observes 10 national public holidays, with 1–3 additional regional holidays depending on the region (Flanders, Wallonia, Brussels, or the German-speaking community).

National Holidays:

• January 1 – New Year’s Day
• April 21 – Easter Monday
• May 1 – Labor Day
• May 29 – Ascension Day
• June 9 – Whit Monday
• July 21 – Belgian National Day
• August 15 – Assumption Day
• November 1 – All Saints’ Day
• November 11 – Armistice Day
• December 25 – Christmas Day

Regional Holidays:

• Flanders: July 11 – Flemish Community Day ‍
• Wallonia: September 27 – Walloon Community Day (celebrated on the third Sunday) ‍
• Brussels: May 8 – Iris Day (not always observed as a public holiday) ‍
• German-speaking Community: November 15 – Community Day

Employees receive full pay for public holidays that fall on workdays. If a holiday falls on a weekend, a replacement day may be offered. Working on a holiday entitles employees to 200% pay plus a compensatory day off.

Other Leave Types

• Bereavement Leave: 3–10 days depending on the relationship (e.g., 10 days for a spouse or child, 3 for a parent). Paid by the employer. Some CBAs offer extra days. ‍
• Marriage Leave: 4 paid days for an employee’s own wedding, and 2 days for a child’s wedding. ‍
• Care Leave: Up to 12 months (full-time or part-time) to care for a seriously ill family member. Paid via social security. Requires one month’s notice. ‍
• Youth Leave: Employees under 30 can take up to 5 unpaid days for youth organization activities, with employer approval. ‍
• Adoption Leave: 6 weeks for single parents or 4 weeks for co-parents, per adopted child under 8. Paid at 82% of salary (capped at €153.92/day). Duration doubles for children with disabilities. ‍
• Training Leave: Up to 125 hours per year for job-related training, with partial salary (capped at €3,047/month), funded by regional programs like Flanders’ educational leave.

Employee Benefits

Governed by labor laws and collective bargaining agreements (CBAs), benefits require precise administration to ensure compliance.

Mandatory Benefits

Mandatory benefits in Belgium, funded through employer contributions (22–35% of gross salary), are managed by the National Social Security Office (ONSS/RSZ) and include:

• Pension (8.86%) – Covers old-age and survivors’ benefits, with earnings capped at €74,693/year. ‍
• Unemployment Insurance (1.46%) – Provides 70–80% of salary (up to €3,100/month) for eligible unemployed workers. ‍
• Disability and Sickness Insurance (6.15%) – Covers sick leave (60–100% of salary for up to one year) and long-term disability. Employees also contribute to private health insurance via mutual funds (~€100–€200/month). ‍
• Family Allowances (5.5%) – Monthly child benefits of €100–€250, depending on the region. ‍
• Work Injury and Occupational Disease Insurance (1.3%) – Compensates for job-related injuries or illnesses, with rates up to 3% in high-risk sectors like construction.

Optional Benefits

Employers often offer additional benefits—many guided by CBAs covering 90% of workers:

• Meal Vouchers: €8/day (tax-free), adding ~€1,600/year. ‍
• Transport Allowance: €50–€200/month for public transport or €0.27/km for cycling, tax-free. ‍
• Private Health Insurance: €20–€50/month for dental/hospital cover. ‍
• Supplementary Pensions: Employer contributions of 1–3% of salary, tax-advantaged. ‍
• Eco-Vouchers: €250/year for sustainable purchases. ‍
• Remote Work Allowance: €150/month, tax-free. ‍
• Stock Options: Offered by some multinationals, taxable. ‍
• Housing/Phone Subsidies: €100–€300/month for expats, partly taxable.

Termination Rules

Notice Periods

Notice periods for termination depend on seniority, contract type, and CBA modifications, per,. Since 2014, white- and blue-collar workers have harmonized notice periods under the Employment Contracts Act.

• Employer Dismissal (White-Collar, Indefinite Contracts):
  
  • Less than 3 months: 28 days
  • 3–6 months: 35 days
  • 1–2 years: 56 days
  • 5 years: 15 weeks
  • 10 years: 27 weeks
  • 20+ years: 52 weeks ‍
• Blue-Collar Workers: Notice periods are slightly shorter for those with low seniority (e.g., 14–28 days for under 1 year) but align with white-collar standards after 5 years. ‍
• Employee Resignation: Notice is typically half the employer’s, capped at 13 weeks (e.g., 14 days for under 3 months; up to 26 weeks for 20+ years). ‍
• Fixed-Term Contracts: Cannot be ended early without mutual consent or serious cause. Otherwise, the employer owes severance equal to the remaining contract period. ‍
• CBA Variations: Collective agreements (covering ~90% of workers) may adjust notice periods. For example, PC 200 caps resignation notice at 6 weeks.

Severance in Lieu of Notice

Employers may choose to pay severance instead of requiring employees to work through the notice period. This payment must include:

• Base salary
• Pro-rated bonuses (e.g., 13th-month)
• Benefits (e.g., €8/day meal vouchers, company car value)

Excluding benefits from severance can lead to disputes or fines ranging from €1,800 to €18,000.

Additional Severance and Compensation

Extra payments may apply in certain cases:

• Protected Employees: Special approval is required to dismiss pregnant workers, union reps, or those on parental leave. Violations can trigger compensation of up to 6 months' salary. ‍
• Unfair Dismissal: Terminations due to discrimination or abuse may result in 3–17 weeks’ salary in damages—typically €10,000–€50,000. ‍
• Seniority-Based Severance: Employees aged 45+ with 20+ years of service may receive additional severance under CBAs (e.g., 2 months’ salary in PC 200). ‍
• Outplacement Support: Required for employees aged 45+ with at least one year of service. Employers must cover 60 hours of career support, typically costing €1,800–€5,000.

Work Visas and Immigration

Visa and Work Permit Requirements

Non-EU nationals must obtain the appropriate visa and work authorization based on the job’s duration.

Limosa Declaration

A Limosa declaration is required for non-EU temporary or posted workers, including short stays. It must be submitted online before work begins and includes details about the job, employer, and work duration. As of April 2024, employers can declare up to 20 work locations in a single submission, easing the administrative process.

• Exemptions: Certain short-term activities are exempt—such as artist performances under 21 days, academic conferences, and international transport work. ‍
• Compliance Risk: Failing to submit a Limosa declaration can result in fines of €500–€5,000 per worker. An EOR can handle the process to ensure full compliance.

Does an EOR Make Sense in Belgium?

Hiring in Belgium means navigating complex labor laws, high social contributions (22–35% of salary), and collective bargaining agreements (CBAs) that cover 90% of workers. From compliant contracts to Limosa declarations, getting it right requires precision. An Employer of Record (EOR) like Knit offers a streamlined solution—acting as the legal employer while you retain day-to-day control over your team.

Streamlined Compliance

Belgium’s regulatory framework is intricate, with risks of fines (€400–€48,000) for errors in payroll, contracts, or visa processes. An EOR ensures:

• Payroll Accuracy: Calculates employer contributions, deductions, and taxes according to ONSS rules—avoiding fines of €800–€18,000. ‍
• CBA Adherence: Applies sector-specific requirements like €8/day meal vouchers, 13th-month salary, and proper notice periods (28 days to 52 weeks), reducing potential disputes. ‍
• Contract Compliance: Drafts contracts in the correct regional language (Dutch, French, or German) with all required clauses to prevent nullification or fines (€400–€4,000). ‍
• Leave Management: Tracks leave entitlements (e.g., 20–30 days annual leave, 15–20 weeks maternity, 20 days paternity), ensuring correct pay and protection under the Holidays Act.

Simplified Immigration

Non-EU hires must go through Belgium’s strict visa process, which includes:

• Managing Applications: Submits Type D visa and Single Permit applications through the “Working in Belgium” portal, bypassing labor market tests for shortage roles like IT and healthcare—saving up to 8 weeks. ‍
• Limosa Declarations: Files mandatory declarations for posted or temporary workers and supports up to 20 work locations per submission (since April 2024), avoiding €500–€5,000 fines. ‍
• Eligibility Checks: Verifies salary thresholds (€45,984–€47,174/year) and ensures EU Blue Card compliance (€60,998/year), reducing risk of delays or deportation.

Cost Optimization

With high labor costs—like a €2,111.89 monthly minimum wage and €150/month remote work allowance—smart cost control is essential. An EOR can help by leveraging:

• Tax Incentives: Applies the expat tax regime (up to €90,000 tax-free) and R&D payroll exemptions (80% tax reduction), saving €10,000–€20,000 per researcher. ‍
• SME Reductions: Secures 25% social contribution discounts for small businesses, cutting costs by €1,000–€2,000 per hire. ‍
• Student Contracts: Uses low-contribution contracts (2.71%) for interns, saving €500–€1,000/month per student. ‍
• Tax-Free Perks: Offers benefits like meal vouchers and eco-vouchers to reduce taxable wages by 5–10%.

Flexibility for Market Entry

An EOR enables rapid hiring without establishing a local entity, ideal for:

• Market Testing: Explore sectors like tech, logistics, or Antwerp’s diamond trade with minimal risk. ‍
• Project-Based Hiring: Use fixed-term or student contracts for seasonal or short-term needs. ‍
• Scalability: Add or reduce headcount without navigating complex severance rules (15–52 weeks’ pay under Belgian law).

Hiring in Belgium is complex, but it doesn’t have to be. Knit takes care of local compliance, payroll, contracts, and benefits—so you can onboard talent confidently and focus on growing your business. Contact Knit today.