How To Hire And Pay Employees In Belgium

Belgium offers many advantages to organisations that decide to expand there. It is recognised as one of the world’s top exporters with no trade restrictions. It is also known to be significantly easier to set up a business there than in other countries.

Belgium’s workforce is ranked fourth in the world for its education levels. The country’s workforce is known for its high productivity and highly qualified workers, making it an attractive destination for businesses to expand their workforce.

However, Belgium has high corporate taxes, as well as stringent labour laws which can make hiring and firing employees challenging. Belgium is known for its bureaucracy, which can make it difficult for businesses to get approvals and licences.

Annual leave entitlement in Belgium depends on the employee's length of service during the previous calendar year. Generally, employees are entitled to 2 days annual leave for each month worked in the previous year. This is particularly common amongst white collar employees. Many employers will count any periods of absences and leave from the previous year as periods worked when counting annual leave entitlement. A full-time employee that works 5 days per week would be entitled to 20 days holiday for a full year of service. White collar employees receive double pay whilst on holiday, where they are paid their normal salary plus a holiday allowance.

There are 10 public holidays in Belgium.

Probation periods in Belgium are between one and six months when the employee’s salary does not exceed €36-37,000. Employees earning more than this may have a probation period of up to 12 months.

During the probation period both the employer and employee may terminate the employment relationship by providing 7 days’ notice. In Belgium, there are two methods of termination for an employment contract that is indefinite in the absence of a serious cause. An employment contract may either be terminated through serving a notice period or by paying an indemnity in lieu of notice.

The below notice periods apply to employees who have worked for an employer since January 2014.

• Less than 3 months: 1 week
• 3-4 months: 3 weeks
• 4-5 months: 4 weeks
• 5-6 months: 5 weeks
• 6-9 months: 6 weeks
• 9-12 months: 7 weeks
• 12-15 months: 8 weeks
• 15-18 months: 9 weeks
• 19-21 months: 10 weeks
• 21-24 months: 11 weeks
• 2-3 years: 12 weeks
• 3-4 years: 13 weeks
• 4-5 years: 15 weeks
• 5+: additional 3 weeks per year
• 20+ years: additional 2 weeks per year
• 21+ years: additional 1 week per year

Indemnity in lieu of notice is based on an employees gross annual salary, including benefits and is in line with the applicable notice period. This will include items such as the following:

• Monthly Salary
• Holiday Pay
• Bonuses in the last 12 months
• Employers contribution to pensions and healthcare
• Benefit in kind of a company car, computer equipment, telephone etc
• Any stock or share plans

If employment is terminated through providing a notice period, notice must be provided in writing stating the start date and duration of the notice period. The notice period will be effective from the third working day (including Saturdays) after the notice was provided in writing. The notice period will then start running from the first Monday following the week that the notice becomes effective. The notice in writing must be provided either by registered mail or a bailiff. If these conditions are not met, the termination is considered void and the employer will be required to pay indemnity in lieu of notice.

If an employer wishes to dismiss an employee, there must be a just cause. Any dismissed employee has the right to be informed of the reasons for dismissal.

If an employer wishes to dismiss an employee for a serious cause this must be done within 3 working days of the person who has the authority to dismiss being notified of the incident. The reasons for the dismissal must be sent to the employee within 3 working days after the dismissal. Examples of serious causes are theft, fraud, and violence. There is no entitlement to notice, or indemnity in lieu of notice if an employee is dismissed for a serious cause.

It is common for employers to insert confidentiality and non-compete clauses into a contract of employment to protect business interests. Confidentiality clauses are enforceable, obliging past and present employees to maintain confidentiality with regards to trade secrets and other confidential and personal information. Non-compete clauses are strictly regulated and must be provided in writing, either at the start of or during employment. They must be limited to a reasonable geography, not exceed 12 months after the termination of employment, and must relate to similar activities.

An employer will also need to provide the payment of a single and flat-rate compensatory payment to the employee if, within 15 days after the end of the employment contract, the employer does not waive the application of the non-competition clause. The minimum amount of this payment is equal to half the employee's gross remuneration corresponding to the period of application of the clause - for example, if the non-compete clause is provided for one year, the indemnity must be for at least six months' gross remuneration. There can be further specific rules for sales representatives where clauses maybe extended outside of Belgium and be for longer than 12 months.

There is no legal requirement to produce a written contract of employment for permanent/indefinite contracts of employment (Contrat de travail à durée indéterminée/De arbeidsovereenkomst voor onbepaalde tijd). However, it is strongly recommended that a written contract is produced.

Any probation periods or non-competition clauses must be provided in writing. A written contract of employment must be provided for the following types of employment, fixed term contracts (Contrat de travail à durée déterminée/De arbeidsovereenkomst voor bepaalde tijd), specific assignment contracts (Contrat de travail pour un travail nettement défini/De arbeidsovereenkomst voor een duidelijk omschreven werk), replacement contracts (Contrat de remplacement/De vervangingsovereenkomst) e.g. for an employee that is replacing an existing employee who is absent for a reason such as maternity leave, temporary contracts (Contrat de travail temporaire-contrat de travail intérimaire/De arbeidsovereenkomst voor uitvoering van tijdelijke arbeid en uitzendarbeid), and part-time contracts (Contrat de travail à temps partiel/Arbeidsovereenkomst voor deeltijdse arbeid).

Contracts of employment will need to be in either French, Dutch, or German depending on the region of where the employment takes place. An informal copy may also be provided in English.

Expectant mothers in Belgium are entitled to 15 weeks maternity leave. A maximum of 6 weeks to be taken before the expected due date, and a compulsory minimum 9 weeks after the birth. For the first 30 days the maternity leave is paid at 82% of the gross salary, after the 31^st day this is then paid at 75% with an upper limit of approximately €106 per day. Maternity leave is paid by social security. Fathers are entitled to 15 days paternity leave.  

If an employee is unable to attend work due to illness, they are entitled to statutory sick pay which is paid directly by their employer for the first 30 days. After this period an allowance will be paid by social security.

Social security contributions in Belgium are compulsory and are based on employee earnings. Both the employer and employee have contributions to make which finance the social security system. This provides employees and residents in Belgium with access to unemployment benefits, sickness allowances, pensions, allowances in the event of accidents at work, industrial diseases, and incapacity to work.  

The Belgian healthcare system is divided into state and private sectors, with both having chargeable fees. The state system is funded by compulsory health insurance which provides access to subsidised services such as hospital care, dental care, doctors, and prescriptions. The regional Flemish, Walloon, and German speaking communities all have their own administrative healthcare divisions. Anyone that lives and works in Belgium must be registered for social security and make health insurance payments, this will give access to the subsidised public healthcare. Pensioners, students, unemployed, and those with disabilities are entitled to the same subsidies as someone who is employed.

Part of the process for enrolment to social security is registering to contribute to a health insurance fund. These are called ziekenfonds in Dutch and mutuelle in French. Residents can choose their own mutuelle/ziekenfonds.

There is also the option for private healthcare in Belgium. This often runs alongside its public counterpart. Many private health insurers will require payment of medical costs up front and then to claim these back. Many residents in Belgium choose to take out private coverage to top up their state coverage and provide them with access to private healthcare treatment. 

The Type-A permit allows someone to work for any employer in Belgium for an unlimited period of time. In order to be granted a Type-A work permit, you must have lived and worked in Belgium on a Type-B permit for a minimum of four years. In the case of an extension request, the foreign worker shall be granted a maximum of two years’ extension at the first extension application for the same employer, and for further applications, a maximum of three years’ extension shall be granted.

Highly qualified foreign workers may have the option of being granted a ‘Turquoise Card’ for a transition period of three years, during which time their activities and commitments will be monitored by a specialist from the General Directorate. The Turquoise Card can then be made indefinite. Foreign workers with a long-term residence permit or a legal work permit with a minimum term of eight years may apply for an indefinite-term work permit, however, there is no automatic entitlement to this.

The type B permit is issued for a specific job for a specific employer. This permit requires employer sponsorship and is applied for by the employer. The permit is only valid for employment with the company that are sponsoring. A foreign worker should only work in Belgium when a labour market test indicates that there are no suitable candidates found on the Belgian or EEA labour market. There are certain positions where a foreign worker will not need a labour market test, such as highly qualified workers, technical experts, and researchers. The type B permit is valid for one year and can be extended.

The type C permit is for foreign nationals staying in Belgium on a temporary basis. This includes family members of consular officials, students, and asylum seekers (when right to remain is not confirmed). This permit allows holders to be employed for any type of job in any field. The permit is valid for up to 1 year, this can only be extended in certain circumstances.

The minimum wage in Belgium as of January 2022 is:

• €1,691.40 per month for employees over 18 years old;
• €1,736.28 per month for employees over 19 years old who have completed at least six months’ service; and
• €1,756.23 per month for employees over 20 years old who have completed at least 12 months’ service.

The Belgian tax year runs from January to December. It is the employer’s responsibility to ensure taxes are paid from salaries before payments are made to employees. The general personal income tax rates are listed below as guidance. All employees are entitled to a personal tax-free allowance (belastingvrije som, somme exonérée), as of 2021 this is €9,050.

Salaries in Belgium are generally paid on a monthly basis, with payment usually on the last working day of the month. Most employers pay a 13^th month salary as a bonus to their employees. This is usually paid in December. In addition to a 13^th month salary some employers even pay half of a 14^th month salary. These bonuses are paid on a pro-rata basis when an employee has not worked a full year. Meal vouchers are also very common in Belgium. If certain conditions are met these are exempt from taxes and social security. The employer and employee will both need to contribute to the meal voucher.

Social security contributions are the responsibility of the employer to deduct from an employee’s salary before payment. Both the employer and employee are subject to social security contributions. Below is a guide on approximate contribution rates for employers and employers. However, these can vary.