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What is the purpose of social security contributions?

Employers | 17 June 2020

Hiring your first employee implies obligations for the employer. One of them is to declare the employee to the NSSO and to manage collection of the social security contributions. Here’s how it work.

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What is the purpose of social security contributions?

Every employer has obligations in terms of managing employee recruitment and the human resources policy. One of the most important is the NSSO.

What is the NSSO?

The NSSO is the National Social Security Office. This administration is responsible for collecting social, employer and special contributions to sustain  the unemployment benefit system, pensions and sickness/disability insurance (to pay for health care). The NSSO therefore plays a key role in the functioning of the system of collective self-help on which Belgium social security is based.

The employer's obligations

As an employer  recruiting your first employee, you have three obligations towards the NSSO:

1.    Register as an employer 
Whether you are an individual or a legal entity, before hiring your first employee, you must make yourself known to the NSSO as an “employer”, and they will assign you a NSSO number. The registration procedure to obtain this is completed online directly via the Wide application. This procedure can be handled by your social secretariat.

2.    Declare your employee
Every employee with an employment contract must be registered with the NSSO by their employer by means of a Dimona declaration. This declaration must be submitted electronically before the employee's first actual day of work. Again, this procedure is managed automatically by your social secretariat.

Keep in mind that all workers should be registered. This is also the case for student job seekers and apprentices.

3.    Declare benefits and wages
Once both the employer and the employee are registered with the NSSO, you must declare the employee's benefits and wages to the administration on a quarterly basis. This multifunctional declaration (DmfA) is used to determine the level of the social security contributions to be paid by the employer and the employee.

4.    Collect social security contributions
The employer is responsible for deducting both the employer's and the employee's social security contributions from the gross salary. The employer pays social security contributions to the NSSO quarterly for ordinary contributions and once a year for special contributions such as holiday pay.

How are the levies calculated?

There are two main types of contribution:

1.    Ordinary contributions
In the private sector, the employee's personal contributions equal 13.07% of gross pay. The employer contributions are 25% of gross pay. Gross pay is defined as the monthly pay the employee receives, but also includes end-of-year bonuses, overtime and benefits in kind (car, mobile phone, etc.).

2.    Special contributions
There are many special contributions be payable by either the employer, the employee or both. Among the main special contributions are the double holiday pay levy, the special social security contribution, and the solidarity contribution linked to the use of a company car, etc.

Your Securex social secretariat is once again your preferred partner for advice and assistance in managing all these deductions and calculating them, because we take NSSO obligations seriously. Late or non-payment of contributions is subject to financial penalties that can be very significant.

The National Social Security Office is responsible for collecting social, employer and special contributions to supply  the unemployment benefit system, pensions and sickness/disability insurance.

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