Pay more to your employees and less to the social security regime : the social security contribution exemption for high wages
In Belgium, employers’ social security contributions have always been due on an employee’s full uncapped salary. The Programme Act of 18 July 2025 caused a ‘minor earthquake’ by introducing, for the first time, a cap on employers’ social security contributions providing that, from 1 July 2025, no basic employer contributions would be due anymore on the portion of the base salary exceeding a certain quarterly threshold. This threshold has now been set at EUR 85,000 by a Royal Decree of 6 October 2025. This Royal Decree also clarifies which salary components are included in the definition of “base salary” to determine whether or not the threshold has been reached.
Cap on employers’ social security contributions set at EUR 85,000 per quarter
As from 1 July 2025 (i.e. from the third quarter of 2025), employers no longer have to pay the basic employer social security contributions on the portion of an employee’s salary that exceeds a certain threshold.
The Royal Decree of 6 October 2025 has now formally set this threshold at EUR 85,000 per quarter and per employee.
The exemption applies solely to the standard ‘basic’ employer social security contributions (approximately 25%). Special contributions (such as sector contributions and contributions to the Closure Fund, Occupational Accidents Fund or Asbestos Fund) are still due on the entire salary. Also, employee social security contributions continue to be calculated on the basis of uncapped remuneration.
The remuneration cap is a fixed amount, and will not be prorated for part-time employment or incomplete quarters.
If an employee has multiple jobs, then the EUR 85,000 threshold will be divided between the jobs based on the proportion of each job’s basic salary to the total combined salary for the quarter.
Finally, the threshold will be indexed.
Which salary components are taken into account for the threshold?
The new Royal Decree has also specified that only salary components directly linked to work performed during the quarter count toward the €85,000 quarterly threshold.
This includes all wage elements under wage code 1 and wage code 61 in the DmfA, such as the base monthly salary, overtime, single holiday pay for white-collar employees, guaranteed salary, etc.
However, other components, such as the year-end bonus or annual performance bonus, are excluded and remain fully subject to social security contributions. Also, severance payments do not fit the definition of “base salary” and are not covered by this exception.
Why has such a threshold been introduced?
Capping employers’ social contributions aims to make Belgium more competitive with other countries by lowering employers’ labour costs. It also seeks to prevent highly paid employees from switching to self-employed status mainly to avoid incurring higher social security costs. However, it remains to be seen whether this goal will be achieved, since self-employed individuals have a maximum quarterly contribution, which is much lower than the cost currently incurred for employees.
For more information about this new legislation’s impact on the salaries of your high-earning employees, please contact Philippe De Wulf (Philippe.DeWulf@altius.com) or Emma Van Caenegem (Emma.VanCaenegem@altius.com).
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