Belgium is set to introduce a significant shift in its social security framework. This change could potentially reduce employment costs for companies hiring highly salaried employees. As a part of a draft Program Law submitted on 27 May 2025, the Belgian government has proposed a cap on employer social security contributions for remittance exceeding a certain threshold, effective from July 1, 2025.
At present, employer contributions in Belgium are calculated based on the gross salary with rates reaching to 27% and 45% for white collar employees and blue-collar employees, respectively. These contributions, although open-ended, generate a considerable cost burden predominantly while retaining or recruiting senior executives or highly paid skills.
Key Change Proposed
Under the proposed reform by the Belgian government, employer contribution would levy solely to certain earnings below a predefined quarterly cap with income beyond that limit will not be subjected to employer social security charge. Even though the threshold has not been officially confirmed yet, it is expected to affect annual compensation exceeding €340,000, with index revision or price-level adjustment to this figure in the subsequent years.
This overhaul could mark a strategic turning point in how companies approach the overall compensation structures in Belgium, particularly for sectors where attracting top-notch talent is critical.
What Stays the Same?
Notably, despite the overhaul, the employee contribution rate of 13.07% on gross salary continues to remain unchanged. In addition to this, special employer contributions such as closure fund, and social security fund will remain unchanged across the full emoluments amount, regardless of one’s salary.
Why It Matters
Belgian government’s reform is widely poised as an effort to enhance the overall competitiveness in the European labor market specifically as the countries intensify the competition for high-value skills in various sectors. This proposed cap can potentially bring Belgium a more attractive jurisdiction for both international employers and top-notch professionals.
Next Steps
While the draft Program Law discusses the legislative texts, the legal obligations are awaiting formal approval and publication. If adopted, these rules will be in effect from July 1, 2025.
How TopSource Worldwide Can Help
TopSource Worldwide, your global expansion partner, has been actively monitoring the recent developments in Belgium with respect to the current proposal will further ensure that the clients are aware of the enacted legislation. Employers who are operating in Belgium or planning their expansion into the region are advised to reassess their compensation strategies and gauge potential implications of this reform.
Need support while navigating employment regulations in Belgium? Explore our EOR services in Belgium and stay ahead of change. Talk to the experts today!