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      In Belgium, a draft Royal Decree1 related to the measures in the “Program Act of 18 July 2025”2  was approved by the Council of Ministers on 19 September 2025.  The Act introduces an exemption from employer social security contributions on gross remuneration exceeding a certain amount per quarter (the amount is EUR 85,000), effective from 1 July 2025.  This applies to private sector and contractual public sector employees and covers only basic employer contributions (approx. 25 percent), while other employer contributions (approx. 3 percent) and employee contributions (13.07 percent) remain unchanged.  The exemption excludes specific remuneration components and must be coordinated with other contribution reductions to avoid overlap.

      As contributions for the 3rd quarter are due by 31 October 2025, this becomes now relevant in the declarations to be made.

      WHY THIS MATTERS

      This measure, effective from 1 July 2025 (3rd quarter of 2025), aims to bolster Belgium's competitiveness for high-paying knowledge jobs.  

      This change provides an opportunity for employers to re-evaluate their income tax, social security, compensation, and hiring strategies, and may have an impact on international assignment budgeting and cost projections.

      Employers might need to contact their payroll office to make adjustments to the payroll processes.

      Exemption from Employer’s Social Security Contributions

      The Program Act provides an exemption from employer social security contributions on gross remuneration exceeding a specified threshold – EUR 85,000 per quarter for 2025 and 2026.  This exemption applies to the private sector and contractual employees in the public sector, covering only the basic employer contributions (approximately 25 percent).  Other employer contributions, totaling around 3 percent, remain payable on the entire salary.  The employees’ contributions (13.07 percent) also remain applicable and are not impacted by the threshold.

      The exemption does not cover certain remuneration elements, such as supplementary pension premiums, company cars, mobility budgets, double holiday pay, severance payments, and profit-related bonuses.  Additionally, the Act introduces changes to specific employer social security exemptions and reductions to prevent double benefit.

      There will be no direct impact on statutory pension rights, as contributions on salary above the current annual threshold do not count towards pension built up.

      For employees with multiple jobs, the threshold will be apportioned based on the ratio of the basic salary from each employment to the total combined basic salary.  Notably, the threshold remains at EUR 85,000 even for incomplete quarters.

      The Belgian National Social Security Office (De Belgische Sociale Zekerheid | La Sécurité Sociale Belge) has already published3 additional information about the EUR 85,000 threshold and the associated payroll codes in its guidelines for the third quarter of 2025.  Wage elements other than those under codes LC 1 and LC 61 are not taken into account when determining whether the threshold amount has been reached. 

      KPMG INSIGHTS

      Combining the Exemption with Other Reliefs

      The exemption can be combined with other employer contribution reductions, such as structural reductions and target group reductions, but not on the same wage elements or amounts.  Each reduction must be applied to a different portion of the employee’s wages.  For example, if the exemption is applied to the salary amount above the threshold, other reductions may only be applied to the remaining eligible wage elements.

      Steps to Consider

      The implementation of this exemption marks a strategic initiative by Belgium to attract and retain highly-skilled professionals by reducing employer costs for high earners.  

      Employers should prepare to adjust their payroll systems to accommodate these changes and evaluate the potential impact on their compensation strategies.

      If individual taxpayers and/or employers have questions or concerns about the measures highlighted in this newsletter, they should consult with their usual qualified tax or social security professional or a member of the GMS/People Services team in Belgium (see the Contacts section).

      FOOTNOTES:

      1  See (in French), "Mesures visant à améliorer la compétitivité de l’économie - Deuxieme lecture" (Conseil des ministres du 19 septembre 2025), published on the website of SPF Chancellerie du Premier Ministre - Direction générale Communication externe at: https://news.belgium.be/fr/mesures-visant-ameliorer-la-competitivite-de-leconomie-deuxieme-lecture-0 .  For the Dutch-language version go to: https://news.belgium.be/nl/maatregelen-ter-verbetering-van-het-concurrentievermogen-van-de-economie-tweede-lezing-0 .

      2  Articles 80-84 of the Program Act of 18 July 2025 (18 Juillet 2025. - Loi-programme), BS 29 July 2025.

      3  See the Dutch version: Administratieve instructies RSZ - 2025/3 > De bijdrageverminderingen and the French version: Instructions administratives ONSS - 2025/3 > Les réductions de cotisations.  

      Contacts

      jeroen-vandenbossche
      Jeroen Vandenbossche

      Director, social security & employment law

      KPMG in Belgium

      Julia Tverdochlebova
      Julia Tverdochlebova

      Manager Tax, Legal & Accountancy – People Services

      KPMG in Belgium

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      The information contained in this newsletter was submitted by the KPMG International member firm in Belgium.

      GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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