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Employment, Social Security and Immigration Law

Result-tied Bonuses

During their 2007-2008 Interprofessional Agreement discussions, the representatives of trade unions and of the employers that make up the “Group of 10” agreed on enforcing result-tied bonuses.

By means of the new bonus system (Law of 19 December 2007), the employer can grant a yearly net bonus to all or to a group of their employees. The bonus is exempt from income tax and is not considered as “salary” (therefore, not taken into consideration for pension entitlements). However, the bonus is still subject to a social security contribution of 33% by the employer.

The bonus may be granted in accordance with the following conditions:
• The maximum bonus per employee per year is set at € 2,200.00 net and can be indexed every year. Any surplus is subject to progressive tax rates and social security contributions
• The bonus cannot replace existing salary entitlements. It can however replace an existing bonus system
• The bonus is intended for all employees within the company and cannot be granted individually (e.g. It is impossible to link the bonus to a yearly evaluation of the employee)
• The bonus is established objectively according to clearly defined results (which can vary per department or business unit). The objectives can also be of a non-financial nature, for instance a decrease in days taken off work due to illness or accidents in the workplace
A collective labour agreement needs to be agreed upon by companies with a trade union delegation. For companies without a trade union delegation, an accession contract needs to be added to the labour regulations.
This system gives a company greater autonomy in granting the result-tied bonuses, provided “clearly defined, transparent and measurable” goals exist.

Inge Derde, Advocaat/Avocat, Tel.: +32 2 800 71 08, E-mail: iderde@laga.be Thomas Martens, Advocaat/Avocat, Tel.: +32 56 59 43 35, E-mail: thmartens@laga.be

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Re: The expat pension puzzle
 
Hi
I am a South African citizen (aged 39) , working in Belgium since Jan 2002.

I was recruited by Belgacom and migrated here with my family (family totals 5).

Currently I have non-resident tax staus. I plan to stay here until I retire. Will I be able to retire and have my retirement money paid wherever I choose to live (be it South Africa of Belgium).

Will it be better for me to become a Belgian citizen before I retire?

Thanks for your advice
Gert Timmerman

 Dear Gert

The information below may be of help: 

" The Belgian pension legislation includes a residence condition as to the payment of the legal pension amounts. In practice, this means that Belgian legal pensions are not paid out to persons who do not reside in Belgium during retirement. This condition of residence does however not apply to Belgian nationals and to foreigners being nationals of a country with which Belgium has concluded a bilateral or multilateral social security treaty. As no social security treaty has been concluded between Belgium and South-Africa so far, a South-African national will only receive a Belgian pension in as far as he resides in Belgium during retirement.
From the above, it may also be deduced that should the South-African national indeed obtain Belgian nationality, his Belgian pension amount will be paid out anywhere in the world, i.e. independent from his country of residence during retirement ".

Mieke Douchy (adouchy@laga.be).

send your queries to belgium@expatica.com