Employer action code: Act
In January 2025, the Belgian government published its Federal Coalition Agreement for 2025–2029, which included ambitious and wide-ranging proposed reforms to the country’s labor law, social security system and tax legislation. One year later, some measures have been legislated, several have progressed but are still pending, and some seem to have gone dormant for now.
Key details
The government agreed on the details of the following proposed measures at the end of 2025, but they still need to be legislated:
- Mandatory mobility budget: Companies that have been providing company cars for at least 36 months would be required to offer mobility budgets to employees as an alternative to a company car. The requirement would take effect on January 1, 2027, for organizations with 50 or more employees and one year later for smaller organizations (15–49 employees)
- Temporary cap on mandatory wage indexation: The proposal would limit wage indexation to pay up to 4,000 euros per month. Pay in excess would not be subject to indexation; however, employers would only retain a portion of the cost savings resulting from non-indexation of wages above the ceiling, with the remainder paid to the government. Initially planned for 2026 and 2028, the measure is expected to be discussed later this year, with normal indexation applying for the time being
- Bonus-malus system for retirement: A new pension bonus for employees retiring after normal retirement age (NRA) would apply retroactive from January 1, 2026, increasing the monthly social security pension by 2% per year of retirement after NRA for individuals born before 1963, 4% for those born in 1963 to 1972 and 5% for those born after 1972. A corresponding pension malus to discourage early retirement would become effective in 2027
- Voluntary overtime regime: The proposal would establish a single system of voluntary overtime, allowing for 360 overtime hours per year in almost all sectors, with overtime compensation (if any) exempt from income tax and social security contributions
- Benefits in kind: Lump sum benefits in kind (BiKs) valued (on an aggregate basis) over 20% of annual gross payroll would be subject to a 7.5% tax, payable by employers, nondeductible for corporate income tax, from 2026. The tax would apply to BiKs valued on a flat-rate basis, such as personal use of company cars, mobile phones, laptops and stock options taxable at grant. BiKs based on actual value and certain social benefits (e.g., meal vouchers and mobility budgets) would be excluded
The following measures, among others, have been legislated:
- Return-to-work policy (effective January 1, 2026): Work rules must outline procedures for employers to remain in contact with employees on sick leave, and employers must consult with their prevention advisor to assess the work potential of employees unable to work for more than eight weeks. Employers must begin the reintegration process within six months of the onset of incapacity for employees on sick leave who are capable of some work. Employers with more than 50 workers are also required to pay a solidarity contribution to the National Social Security Office per employee under age 55 on sick leave for more than 30 days
- Meal vouchers (effective January 1, 2026): The maximum employer-paid portion of vouchers exempt from income tax and social security contributions increased from €6.91 to €8.91 per day, increasing the related corporate tax deduction from €2 to €4 per voucher, but only if the maximum valued voucher is provided. Note: Companies are not required to increase meal voucher amounts
- Pension tax (effective from 2027): An additional 2% solidarity tax would apply to supplemental pension plan lump sum payments above €150,000
- Expat tax regime (effective retroactively from January 1, 2025): The minimum annual salary requirement for eligibility was lowered from €75,000 to €70,000, and the tax-exempt allowance was increased from 30% to 35% of uncapped annual salary (the previous ceiling of €90,000 was removed)
- “Wijninckx” employer contribution to social security (effective January 1, 2026): The contribution rate increased from 3.0% to 12.5%. This rate is applied to the employer contributions paid toward occupational pensions for those employees whose combined social security and occupational pensions exceed the published “pension target”
Finally, no apparent movement has been made on the proposals to:
- Mandate an employer contribution for occupational pension benefits for all employees by 2035 (possibly because of potential conflict with the 2030 deadline for harmonizing company pension plans for salaried and hourly wage workers)
- Change the tax treatment of occupational pension benefits to reduce tax disadvantages of annuities compared with lump sum payments
- Establish a legal framework for flexible compensation (“cafeteria” systems) based on salary sacrifice by employees
- Simplify regulations on collective bonus systems, tax-favored profit sharing and fixed nonrecurring bonus schemes
Employer implications
Employers should review their policies to ensure compliance with the measures currently in effect. The measures agreed on by the five-party coalition government at the end of 2025 will be more challenging to legislate, particularly the temporary change in indexation and mandatory mobility budgets. In principle, the reforms are intended to improve the environment for doing business, but the government also needs to raise tax revenue. According to the European Commission, the budget deficit is on track to reach 5.5% of GDP in 2026 and 5.9% in 2027, the highest among Eurozone countries.
