Go back

Why will more employees have to pay additional taxes in 2021?

29 April 2021 Marijke Beelen Employers

In 2021, more employees than usual will have to pay additional taxes. Chances are they will ask you, as an employer, about this.

Reading time: Read later?

Temporary unemployment has an impact on tax

Why will more employees have to pay additional taxes in 2021? The explanation will in most cases be temporary unemployment , although this is not the only possible reason. Whether, and how much someone will have to pay extra, depends on the duration of the temporary unemployment and their personal situation.

Because of the corona pandemic, there were a lot more employees who received benefits instead of wages. Relatively less tax is charged on that benefit. The tax part can be quite complicated for a layman, and in order to understand it all, it is important to know the broad outlines of payroll tax (how is payroll tax calculated?) and of the final tax (also known as the end tax).

Payroll tax and final taxation in a nutshell

Every employee has agreed with his employer on a certain salary amount (this is stated in the labour regulations), namely the gross salary. The gross salary is then reduced by social security contributions (this is required by the Social Security Act), and you are left with the taxable salary.

Then, according to tax law, the employer must reduce the taxable salary with payroll tax. The payroll tax is an advance payment on the final tax that the employee will have to pay on the income from his professional activity. This means that the employee does not have to pay the total amount of taxes at once, because an advance payment has already been made.

Each calendar year, the tax authorities calculate the total sum of taxable income, and calculate the taxes that must be paid on this: the final tax. The tax authorities examine how much payroll tax (the advance payment of taxes) has already been paid. If there was an overpayment, the employee gets a refund of the overpayment. If too little was paid, the employee must pay the difference. However, this is avoided as much as possible: the intention is that the payroll tax should be as close as possible to the sum of the final tax. But this does not always work, for example when an employee has received not only wages, but unemployment benefits too.

What are the reasons why employees, who were temporarily unemployed, have to pay additional taxes?

1. Payroll tax on unemployment benefits is usually less

Payroll tax (a percentage) is also deducted from unemployment benefits, but this does not necessarily cover the final tax. In most cases, the amount withheld from the benefit is less than what the employee owes in final taxes.

2. Payroll tax on temporary unemployment benefits were (temporarily) reduced

Since unemployment benefits are lower than an employee's salary, the government decided last year to reduce the payroll tax rate (while in most cases it is already lower than the payroll tax on taxable salaries). The intention was to keep the purchasing power of the employees concerned high. However, this arrangement increased the likelihood of having to pay additional taxes at the end.

Stay up to date with the latest updates

Our experts are ready to inform, advise and support you.

Contact us

Share this post

Written by Marijke Beelen

Juridisch adviseur bij Acerta

Related articles


Late to work due to traffic disruption

15 September 2023 Miet Vanhegen

What if your employees arrive late to work because of traffic disruption? Are they still entitled to their wages?

Read more

What if your employee is tuck at his holiday destination?

03 August 2023 Dries Rutten

Extreme weather such as fierce forest fires and hailstorms upset the holidays of many Belgians. For holidaymakers hit by severe weather, starting start the journey home in good time is by no means easy. What if your employee is unable to return in time to resume work?

Read more

What if there's too much or too little work during the holidays?

25 July 2023 Amandine Boseret

While the summer period is not a busy one for lots of companies, peace and quiet can be hard to find when your employees are on holiday. Those left behind often have to take on more tasks – the duties of those absent. What's the best way to prepare for the hustle and bustle, or the calm, of the summer holidays? What if there's too much work? What i...

Read more