It is no secret that businesses faced a lot of economic challenges this year, including the energy crisis and rising wage costs. In spite of these testing circumstances, a slightly larger group of white-collar workers were paid a profit bonus this year, with the average amount also going up. This is corroborated by the scan conducted by Acerta. There is good reason for this rising popularity as the profit bonus is an advantageous way to reward your employees.
In 2023, 1.5% of white-collar workers in Belgium are to be paid a profit bonus. This may seem like a small increase up from 2022 (when this figure stood at 1.4% of white-collar workers). Yet, it is remarkable to find this relatively new form of remuneration bearing up in times of considerable economic uncertainty. Moreover, the amount of the profit bonus is witnessing a sharp rise, up to an average sum of EUR 2,309. Which is 10% more than last year and as much as a quarter up from 2021. This is in evidence from the data of 260,000 employees from over 40,000 private sector companies.
As an employer, the profit bonus allows you to allocate part or all of any given financial year's profits (albeit capped at 30% of the total gross payroll for the financial year) to your employees in the shape of a bonus. From this bonus, a 13.07% solidarity contribution is deducted, with only 7% to be paid in tax. In other words, these are highly rewarding tax terms for your employees. Employers for their part do not pay any employers' wage tax and social security contributions over the profit bonuses awarded. That being said, the bonuses are not corporate tax-deductible.
It is also worth pointing out that you can pay your employees the profit bonus over and above other bonuses, such as the non-recurring result-related bonus (= CAO90 bonus), for instance. Moreover, it is a safe commitment. As an employer, you are under no obligation to pay this tax-friendly bonus every year. The decision to award the profit bonus needs to be made at the time the financial statements are adopted, i.e. when the results are already known.
The profit bonus is one of the many tools available to you as an employer to reward your employees in a modern and flexible manner. Employees will no doubt rate this bonus as a clear sign of appreciation of the work they do in contributing to your company's profits.
Looking to offer your employees attractive terms of pay and reward, while attracting new talent? We are happy to help you set up a conducive bonus policy, including the administrative, legal and financial steps.
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