Variable remunerations

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Help your employees maximise their bonuses while paying less business tax

Variable remuneration is a crucial part of the salary package in any organisation that wants to reward people who meet their personal and/or company goals.

Paying bonuses in a pension bonus plan is one of the most effective ways for both the employer and employee to optimise this reward.

Statutory Benefits

Belgium scores first place in the annual report (2022) of Organisation for Economic Cooperation and Development (OECD) for country with the highest income taxes. When comparing the difference between labour costs for the employer and the eventual net income of the employee, Belgium scores the highest with 53%.

Personal taxes are calculated using a progressive tax system. (Below you'll see the tranches for the income as of 2023):

If not fiscally optimised, the variable remuneration can be taxed up to an average of 54%. (Including communal taxes). Should an employer choose to pay a bonus of € 10.000 without any fiscal optimisation, their total cost would be € 12.500 including the 25% social contributions (minimum). The employee would only receive +- € 4.000 net of this amount. This amounts for a difference of 68% between the total cost of the bonus and the ultimate net remuneration for the employee.

Warrants are often used as a more favourable method of dispensing the bonuses. Nonetheless, this alternative is limited to max. 20% of the total gross salary + variable remuneration.

The non-recurring performance-related benefit (CB90) is another fiscal route, but this doesn’t allow differentiation between employees. This means that when the enterprise meets the predefined criteria, all employees have a right to this reward. (Capped at € 3.496 per employee in 2024). The criteria are linked to the performance of the company.

A chart showing that pension bonus is more cost-effective than a cash bonus

The Pension Bonus Plan

The pension bonus plan is a type of complementary retirement plan with annual premium payments depending on the results of the employee and/or the company.

Almost immediately after payment of the bonuses in the plan, the employee can take out a part of the pension bonus as an advance to invest in Real Estate in the European Economical Area. (Purchase, reimburse, renovate.)

A pension bonus plan will always be an optimization for the employees, whilst potentially reducing the costs for the employer.

Get specialist expert guidance with our broker service

If you want to receive impartial, unbiased advice and guidance on how to implement a pension bonus plan that works for you and your employees, we can help.

Our specialist employee benefits team is here to help you:

•   Ensure your employee benefits are cost-effective by negotiating on your behalf
•   Identify the insurers who are best-placed to meet your needs
•   Ensure your new policy meets all the regulatory and legal requirements

And, above all, to offer you step-by-step assistance right the way through the process, from our initial consultation through to the day your policy goes live.

Why Howden?

As part of the wider Howden Broking Group, Howden Belgium are part of a group of more than 16,000+ insurance specialists based in more than 50 countries around the world. However complex your needs, we have the expertise and the resources to help you.