Percentage of the employer’s social security contributions: Changes as of 1 January 2018

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Date:
11 Dec 2017

The Tax Shift provided for a progressive reduction of the basic contribution and the salary moderation contribution. In a first phase, as of 1 April 2016, the sum of both social security contributions had already been reduced from 32.40% to 30%. As of 1 January 2018, the sum of both the basic contribution and the salary moderation contribution will be reduced once again, from 30% to 25%.

This reduction has a (significant) impact on the percentage of the employer’s social security contributions that are due on the gross salary and on the severance indemnities paid to employees in the private sector. The percentage of the employee’s contributions (13.07%) remains unchanged.

Taking into account the other general contributions, the unemployment contribution and the contribution to the Business Closure Fund due by the employer, the percentage of the employer’s social security contributions as of 1 January 2018 can be set at:

  • about 27% for white-collar employees;
  • about 43% for blue-collar employees (note: this percentage is applied to 108% of the gross salary).

However, these percentages do not take into account “special” employer’s contributions, such as the Welfare Fund.

These percentages do not take into account the impact of structural reductions either (which have also been changed by the Tax Shift and which depend on the specific situation of each enterprise) and any applicable target group reductions.

As for severance indemnities, the new tariff applies only to dismissals that take effect as from 1 January 2018. The “old” tariff still applies to severance indemnities paid after 1 January 2018, but which relate to a dismissal that took effect before 1 January 2018.

For the sake of completeness, we note that the percentage of the employee’s contributions remains unchanged at 13.07%.

> Action point

As of 1 January 2018, the percentage of employer’s social security contributions which are due on the salary and the severance indemnities of employees in the private sector will be reduced to about 27% (white-collar employees) and 43% (blue-collar workers, calculated on 108% of the gross salary).

Taking into account the specific situation of each enterprise, this reduction in social security contributions can be taken into account for the calculation of the staff budget for 2018.