Circular on shift work published: clarification of the bis scheme

Shift Work in Rough Waters

The exemption from remittance of payroll withholding tax allows up to 22.8% (or 25% in continuous work) of the taxable salaries of employees working in shifts to be exempted from remittance. To apply this exemption, several conditions must be met:

• At least two shifts with a minimum of two employees per shift;

• Shifts must perform the same work in terms of content and scope;

• Shifts must follow each other without interruption;

• Overlap between shifts must not exceed one-quarter of the working day.

Regarding the condition of “the same work in terms of content and scope,” there was long-standing uncertainty. In 2024, the Constitutional Court ruled that shifts must perform exactly the same work in content and scope. Comparable work was insufficient in this context.

This meant that if the tax authorities applied this strict interpretation, companies with shifts of comparable but not identical size (e.g., a morning shift with 10 employees and an evening shift with 7 employees) would no longer qualify for the classic shift work scheme.

Bis Scheme to the Rescue

To provide a safety net for companies with unequal shifts, a bis variant of the shift work exemption was introduced in 2024.
This temporary bis variant allows a partial exemption depending on the degree of deviation in shift size. The bis scheme is calculated in four steps:

Step 1: Determine the theoretical exemption (22.8% or 25% of taxable salaries)
Step 2: Calculate the daily size difference between the largest and smallest shift
Step 3: Calculate the monthly correction factor
Step 4: Reduce the exemption based on the correction factor

New Circular Clarifies and Adds an Administrative Tolerance

1. Measuring the scope of work

For practical reasons, the circular states that in most cases, the number of employees per shift will be used to measure the scope of work. The taxpayer is, however, free to propose another criterion, such as the total working hours of the shifts.

2. 10% Administrative Tolerance

To determine whether a company falls under the classic or bis scheme, the tax authorities allow a maximum deviation of 10%. If the difference exceeds this on a single day, the classic scheme does not apply for that month unless the employer can prove that the deviation was beyond their control.

• If you stay within this margin, you can simply apply the classic scheme.

• Exceed the margin on a single day? The bis scheme applies for that month.

• One exception: force majeure. The circular gives the example of an employee having an accident on the way to work. In that case, the classic scheme can still be retained, provided proof is given.

Note: the calculation of the administrative tolerance is not the same as the calculation of the correction factor. To apply the 10% administrative tolerance, the following daily calculation must be performed:

(number of members in largest shift−number of members in smallest shift)/number of members in largest shift

3. Correction Factor

Under the bis scheme, the exemption is reduced proportionally as the deviation in shift size increases. This reduction is calculated using the correction factor.

• Record the daily actual attendance of employees.

• At the end of the month, total all attendances and calculate the monthly deviation.

• Based on this, the correction factor is determined, which proportionally reduces your exemption.

4. Classic or Bis? Monthly Review

The taxpayer must review each month whether to apply the classic or bis scheme and can switch between them. It is also possible to apply the bis scheme to one department and the classic scheme to another within the same company.

Important to note: the 1/3 rule must be calculated per employee per exemption scheme (classic or bis). Working hours from different exemption regimes cannot be combined.

Additionally, a single global correction factor must be applied to all shifts in the company to which the bis scheme applies.

5. Exemption Limited to Available Payroll Withholding Tax

The theoretical exemption is calculated on 22.8% (or 25%) of taxable salaries. If the available withholding tax is lower than the theoretical exemption, the correction factor must be applied to the available withholding tax.

Example:

Choice Between Shift Work and Night Work Exemption

Do you have a morning, evening, and night shift? The circular provides the option to make a choice:

• Include the night shift in the shift work (or bis) scheme (three consecutive shifts).

• Exclude the night shift from the consecutive morning and evening shifts and apply the exemption for night work.

Attention When Paying Shift Premiums

The circular confirms that all employees performing shift work must receive a shift premium.

• If an employee does not receive a premium (or receives an insufficient premium), the exemption cannot be applied. The tax authorities are expected to monitor this strictly.

• Conversely, if a shift premium is granted to employees not working in shifts, it can no longer be considered a shift premium, and the exemption may no longer apply.

It is therefore crucial to check your payroll administration and ensure that premiums are always correctly allocated.

Time to Calculate!

• Check your shift structure and calculate whether you stay within the 10% administrative tolerance.

• Ensure accurate attendance and payroll data per shift.

• Decide each month which scheme to apply.

• Verify the payment of shift premiums.

The circular clarifies many points, but the calculations and controls remain complex. Our experts are happy to help you choose the correct scheme when applying the shift work (or bis) exemption.