by Ellen Verstraete and Elissa Vantomme
From 1 April 2022, the Law of 28 March 2022 on the reduction of labour costs posed stricter requirements to be eligible for a partial withholding tax exemption. This article explains the changes in detail.
The principle is a simple one: under certain conditions, companies in which shift or night work is performed, which also pay employees a premium for such work, will be eligible for a withholding tax exemption at a rate of 22.8% of the taxable wages. However, the new law has resulted in certain changes.
The exemption for shift work is now separate from the one applicable to night work. This also means eligibility for these two systems will be assessed separately. Previously, it was possible to combine shift and night work to achieve compliance with the ‘one-third rule’, for example.
A worker must have spent at least one-third of their working time performing shift work (or night work) for the withholding tax exemption to apply. This calculation should be carried out on an hourly basis and the Law on the reduction of labour costs determines what should be included in the numerator and denominator.
A break of up to 15 minutes between successive shifts will be considered acceptable. This addresses the previous confusion regarding the requirement for shifts to succeed each other without interruption.
From 1 April 2022, eligibility requires night workers to be granted a premium of at least 12% of their contractually agreed gross hourly wage. The minimum premium for shift work is 2% of the contractually agreed gross hourly wage.
Additionally, from 1 April 2024, granting of these premiums must be recorded in a collective labour agreement, the conditions of employment or an employment contract.
From 1 October 2022, temporary employment agencies will require a worker’s consent to apply the exemption.
Would you like more information about this? Then be sure to contact one of our experts.
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