Reduced wage costs for workers working in shifts or at night

Do you employ workers working in shifts or at night? Then we have good news for you. In order to grant you the greatest possible reduction in wage costs, the government adjusted the method of calculating the exemption from the advance payment of withholding tax.

How is the exemption calculated?

The part of the withholding tax that you, as an employer, do not have to remit to the FPS Finance is equal to a percentage of the taxable remunerations:

The legislation strictly defines the concepts of taxable remuneration, shift or night work and round-the-clock employment. We will not elaborate on these notions in the context of this Infoflash.

Individual calculation

Until the end of 2017, the exemption was calculated per worker. If the calculated exemption amounted to more than the retained withholding tax, you as an employer lost part of the exemption since it was not permitted, if the withholding tax retained was over 22.80% (or 25.00%) of a worker's taxable remuneration and under 22.80% (or 25.00%) of another worker's taxable remuneration, to offset this against each other.

This had to be calculated per worker.

For example:

A worker who works in shifts receives a taxable remuneration of EUR 2,500.00 for the month concerned. The retained withholding tax is equal to EUR 339.12.

The exempted advance payment of withholding tax amounts to EUR 570.00 (=EUR 2,500.00 x 22.80%).

Since the exempted amount (EUR 570.00) is higher than the retained withholding tax (EUR 339.12), part of the exemption was lost (EUR 230.88).

End of the individual approach

On 1 January 2018, the calculation method of the exemption was changed in order to grant employers the highest possible exemption. In what way? By ending the individual approach.

The part of the exemption that exceeds the withholding tax on the remuneration of a worker can henceforth be offset against the remaining withholding tax of other workers who also work in shifts or at night.

For example:

A company has 4 workers working in shifts:

There is still a total available withholding tax of EUR 211.89 left, to which the remaining part of the exemption (i.e. EUR 367.38) is charged.

Please note that the amount is limited to EUR 211.89 The remaining part of the exemption (=EUR 155.49, i.e. EUR 367.38 - 211.89 EUR) is permanently lost.

The new calculation method therefore allows the employer to benefit from an exemption that is EUR 211.89 higher than the exemption calculated by means of the individual calculation method.

Source: Law of 26 March 2018 on improvement of economic growth and social cohesion, Belgian Official Gazette 30 March 2018.

Author: Peggy Criel

25/04/2018