Federal coalition agreement 2025: what will change for employers and employees?

Higher net wages: focus on lower and middle incomes

As of 2027, net wages will increase for all workers, with a particular focus on those earning below the median income. This will be achieved through:

• An increase in the tax-free allowance;

• A reduction in the special social security contribution;

• An expansion of the social work bonus.

These measures are designed to improve the financial position of low- and middle-income earners. Additionally, the gap between working and not working will be structurally increased to at least €500 net per month, with the aim of raising the employment rate. The impact on higher income groups remains more limited and less clearly defined.

Simplification and harmonisation of bonus schemes

The coalition agreement provides for the reform of collective bonus schemes, such as the CAO 90 bonus and profit-sharing bonuses. Rules will be streamlined and better aligned, without imposing additional tax burdens on employers or employees. The goal is to increase transparency and enable more efficient implementation.

Flexible remuneration through cafeteria plans remains possible. However, the exchange of gross salary for benefits will be capped at 20% of the annual gross wage. The government aims to provide clear legal guidelines, while employers hope to maintain administrative simplicity.

Changes to dismissal law: more flexibility for employers

The agreement introduces several changes to dismissal regulations:

• Limiting severance pay: For new hires, severance pay will be capped at a maximum of 52 weeks, mainly affecting employees with 17 or more years of service.

• Reintroduction of the probation period: By the end of 2025, a trial period will be reintroduced, allowing employment contracts to be terminated during the first six months with a notice period of one week.

These measures aim to reduce the cost and risks associated with hiring, though their effect on labour mobility remains to be seen.

Administrative simplification and social protection

To reduce administrative burdens for businesses, the government will introduce several simplifications:

• Abolition of the first job obligation (startbaanverplichting);

• Simplification of risk analysis requirements under the Welfare Act;

• Reduced reporting obligations for SMEs;

• Implementation of e-Gov 3.0 to streamline wage and working time data processing.

Meanwhile, key reforms will also be introduced to social protection:

• Reduced protection for non-elected social election candidates: The protection period will be shortened from 2 years to 6 months, significantly reducing the legal protection for candidates who were not elected.

• Protection maintained for elected representatives: The existing dismissal protection for elected employee representatives will remain unchanged, supporting the continuity of social dialogue within companies.

• Update to the "Gentlemen’s Agreement" (Herenakkoord): The 2002 agreement on the right to strike will be revised. Social partners have until 31/12/2025 to define new guidelines that respect:

  • International standards

  • Existing case law

  • The right to strike

  • The rights and freedoms of others

  • Public order

These updates are part of a broader modernisation of social dialogue. Trade unions will maintain their historical role and legal protection for strikes and demonstrations, but there will be stricter rules on financial transparency and legal liability for service-related actions.

Adjustments for the self-employed and entrepreneurs

Self-employed individuals and business owners will also see changes, including:

• Reform of the status of self-employed in secondary occupation;

• Improved social protection for the self-employed;

• Administrative simplification for entrepreneurs;

• Expansion of options within the Free Supplementary Pension Scheme for the Self-Employed (VSPS/VAPZ).