The provisions for the 2021 holiday pay are accepted as professional costs to the extent that they do not exceed:
- 18.20% of the fixed and variable remunerations granted in 2020 to non-manual workers enjoying the benefit provided by the annual leave legislation, diminished by the additional holiday pay granted in 2020 (1). Only the normal and periodical remunerations must be taken into consideration, with the exclusion of the holiday pay and the end-of-year bonus;
- 10.27% of 108/100 of the remunerations paid in 2020 to manual workers and apprentices enjoying the benefit provided by that same legislation.
(1) It regards the holiday pay for the days on which non-manual workers have taken additional leave because they were not yet entitled to normal leave when starting or resuming the activity. That additional holiday pay corresponds to the regular wage for the taken additional leave days and is financed by an advance on the legal double holiday pay of the following year.
Flexi-wage and flexi-holiday pay
The flexi-wage and the flexi-holiday pay granted in 2020 to flexi-job workers are not included in the calculation basis. In fact, the employer must pay the flexi-holiday pay together with the flexi-wage.
Assimilation in 2020 of days of unemployment by COVID-19 and days actually worked
In 2020, the days of temporary unemployment due to force majeure caused by COVID-19 are assimilated to days actually worked as regards the entitlement to annual leave. So for the calculation of the holiday pay, these days are assimilated with days actually worked.
The FPS Finance was therefore asked whether the calculation basis of the rates of 18.20% and 10.27% could be extended on a flat-rate basis as a consequence of the assimilations mechanism for days of unemployment due to COVID-19 in 2020 with days actually worked.
With regard to both the holiday pay of manual workers and that of non-manual workers, the FPS Finance does not accept any extension of the calculation basis on a flat-rate basis .
However, if the employer considers it necessary to set up a provision to cover the estimated additional cost (as a result of the assimilation of the days of unemployment) of the holiday pay of non-manual workers, this provision can be exempted if all the conditions referred to in art. 48, CIR 92 (provisions for risks and costs) are fulfilled.
If the extension of the calculation basis of the 18.20% rate for the assimilated days of unemployment of non-manual workers (due to COVID-19) is not the subject of a fixed estimate, but is the result of an individual calculation per worker, based exclusively on known and established data, then, according to the FPS Finances, this extension does constitute a certain and established debt on 31 December 2020 and therefore a deductible professional expense in the year 2020, provided that the other conditions of art. 49, CIR are also met.
We advise you to consult your accountant to find out whether the creation of a provision or an extension of the calculation basis of the deductible professional expenses for the holiday pay for non-manual workers is of interest to you.
Source: Circular 2021/C/14 on the amounts recorded in balance sheets closed on 31.12.2020 for the payment of the holiday pay of the staff in 2021.