Enhancement of the fiscal employment bonus as from 1 April 2014

Auteur: Peggy Criel

Since 1 April 2011, a reduction of withholding tax is granted to the salaried workers and to the company managers with a low income who are entitled to a reduction of their personal social security contributions, the so-called 'employment bonus'. This reduction of withholding tax shall be enhanced once more from 1 April 2014.

The reduction of withholding tax is applicable to scales I (singles and dual income households) and II (one-income households). It is applied to the remunerations of workers and the remunerations of company managers.

The reduction is granted provided that the worker or the company manager benefits from the 'employment bonus' in the form of a reduction of the personal social security contributions for workers with a 'low income'.

The reduction will be applied after the application of other withholding tax reductions (such as the reduction for dependant children, the reduction for other dependent members of the family, the reduction for group insurance and old-age and premature death insurance, etc.).

Until the end of 2012, the reduction of withholding tax amounted to 5.7 % of the amount of the employment bonus actually granted. On 1 January 2013, the percentage was increased to 8,95 %. As from 1 April 2014, the percentage will be increased once more. For the income paid or granted as from that date, the reduction amounts to 14.40 % of the amount of the employment bonus actually granted.

Source: Royal Decree of 21 February 2014 amending the Royal Decree for the implementation of the 'Code des impôts sur les revenus 1992' with regard to the section of the withholding tax (1), M.B. 26 February 2014.

Auteur: Peggy Criel