Reduction in employer’s contributions for the first employee: also for hirings after 2020!

The reduction for the first employee is extended so that it also applies to hirings from 1 January 2021 onwards. The Royal Decree regulating this extension has now been published.      

State of affairs

The reduction in employer’s contributions for the six first hirings is organised as follows:

• total exemption from basic contributions for an indefinite period if a first employee is hired;
• a flat-rate reduction for a fixed number of quarters, when a second to sixth employee is hired.

The reduction for the first employee was originally limited in time and would no longer apply for hirings from 1 January 2021. An extension was already announced in the coalition agreement, and is now officially regulated by the Royal Decree of 5 January 2021. The reduction for the first employee becomes applicable without limitation on the date of hiring, i.e. for an indefinite period.

Reduction for the first hiring

The terms of the reduction for the first hiring do not change: 

• the sum of the basic contributions and wage moderation is fully exempt (25.00% on 1 January 2021);
• the exemption is applied in each quarter throughout the full duration of the employment.

Evaluation announced

The government will evaluate this target group reduction in the course of 2021, in consultation with the social partners. Simplification and automation should enable maximum use of this reduction, while simultaneously preventing fraud or improper use. Depending on the outcome of that evaluation, the (current) modalities and procedures may be adapted for each of the six first hirings.

Source: Royal Decree of 5 January 2021, Belgian Official Gazette of 12 January 2021.