A tax-friendly profit bonus as a reward for your workers

If your employees have performed exceptionally well and you wish to reward them by distributing a portion of the profits, then profit-sharing bonuses may be an appealing incentive system. Typically, employees retain twice as much from a profit-sharing bonus compared to a traditional bonus.

This AI-generated translation may contain errors and should not be considerd legal advice. For accurate info, refer to the Dutch or French version or consult your Securex Legal Advisor.

Reform of Collective Bonuses: Simplification and Harmonisation Ahead

The government agreement dated 31 January 2025 anticipates the simplification and harmonisation of collective bonuses (collective labour agreement 90, profit bonus). In preparation for this simplification, an increasing number of employers are implementing collective bonuses. These schemes offer social and fiscal advantages and serve as an effective means to reward employees.

What Are the Advantages of Profit Bonuses?

You pay no employer's contributions (social security).
Your employee pays only 7% tax on the profit bonus.
It is very simple to implement.
You do not have to worry about exceeding the pay standard.

What Are the Considerations Regarding Profit Bonuses?

The employee pays a 13.07% solidarity contribution.
The profit bonus is not deductible for you as an employer.
The profit bonus may amount to a maximum of 30% of the total gross salary mass.

What Is a Profit Bonus?

Through the system of profit bonuses, you can allocate a portion or the entirety of the profit of a financial year to your employees in the form of a monetary amount.

Can I Allocate Different Amounts to Certain Employees?

When granting a profit bonus, it must be provided to all employees in the company. Different amounts per employee are permissible within certain legal limits. You can choose from the following forms of profit bonuses:

Identical Profit Bonus	All employees receive an equal amount or an equal percentage of their salary.
Categorised Profit Bonus	Employees receive a different amount based on a distribution key with objective criteria such as seniority, function, etc.

How Much Administration Is Involved in Implementing Profit Bonuses?

Granting identical profit bonuses is surprisingly straightforward. Only two formalities are required:

The general assembly must decide by a simple majority of votes to grant profit bonuses.
The minutes of that meeting must include the legally required mentions regarding the profit bonus.

When granting a categorised profit bonus, a slightly stricter procedure is necessary to ensure fair treatment of all employees. In this case, a collective labour agreement or an accession document must be prepared.

With the model documents from Securex, you can easily implement either identical or categorised profit bonuses. Please email salaryoptimization@securex.be, and we will be happy to assist you.

How Much Tax Is Withheld from Profit Bonuses?

For the employee, only 7% is withheld as tax.

For the employer, however, the profit bonus is not deductible.

How Much Social Security Is Withheld from Profit Bonuses?

As an employer, you pay no employer's contribution to social security, whereas it typically amounts to 25%.

For the employee, 13.07% social security is withheld as a solidarity contribution.

Can I Grant Unlimited Profit Bonuses?

No, there is a limit. The total amount of the bonus may, at the end of the relevant financial year, amount to a maximum of 30% of the total gross salary mass.

Can I Combine Profit Bonuses with a Pay Bonus?

Yes, you can combine profit bonuses with a pay bonus. Both systems are indeed independent of each other:

A profit bonus is – as the name suggests – always linked to the achievement of profit.
A pay bonus is not linked to profit but to the achievement of collective objectives.

Is a Profit Bonus Included in the Pay Standard?

No, the profit bonus is not included in the calculation of pay cost development and therefore falls outside the pay standard.

Double Net Salary for Rudy

Example:
The company PanyCom is a young enterprise with one employee named Rudy. At the end of the financial year on 31 December 2024, there is a profit (before tax) of € 3,000. The general assembly decides to allocate that profit entirely to the staff, specifically to Rudy.

PanyCom opts for the system of profit bonuses. As a result, Rudy will net € 1,940.28 or almost 65% of the € 3,000 bonus.

In comparison, from a traditional cash bonus, Rudy would have retained only € 970.14 or merely 32.3%. A cash bonus is subject to 13.07% social security and a maximum of 53.5% advance tax levy.

Thanks to the system of profit bonuses, PanyCom effectively provides a double reward to Rudy compared to a cash bonus with the same gross amount.