1. Companies with (exceptionally) high profits
The purchasing power premium can be granted by companies that made (exceptionally) high profits in 2022:
- In case of high profits in 2022, the company can grant a purchasing power premium of maximum 500 EUR per employee;
- In case of exceptionally high profits in 2022, the company can grant a purchasing power premium of maximum 750 EUR per employee.
2. To be granted via a collective bargaining agreement
The purchasing power premium must in principle be granted via a collective bargaining agreement (CBA) concluded at industry or company level:
- If the purchasing power premium is granted via an industry level CBA, this CBA should provide for a definition of “high profits” and “exceptionally high profits”. These definitions will be relevant for determining the maximum amount of the purchasing power premium that can be granted to the employees (see point 1).
- If the purchasing power premium is granted via a company level CBA, this CBA should justify it concerns a company that obtained good results in 2022. In that case, the amount of the purchasing power premium can be equal to maximum 750 EUR per employee.
As an exception to the foregoing, the purchasing power premium can also be granted via an individual agreement with the employee but only if (i) the company does not have a trade union delegation or (ii) if it involves employees of a personnel category for which it is not customary to conclude a CBA (e.g. higher management functions). In this case the maximum amount of the purchasing power premium is capped at 750 EUR per employee.
3. Granted as a consumption voucher
The purchasing power premium is not paid to the employees in “cash” but in the form of consumption vouchers.
As a result, this purchasing power premium can only be used by employees:
- To buy a meal or for the purchase of ready-to-use food; or,
- For the purchase of products or services of an ecological nature that can also be purchased with eco-vouchers.
4. Favorable tax and social security regime
The purchasing power premium benefits from a favorable tax and social security regime:
- From a tax perspective, the purchasing power premium is exempt from taxes for the employee. For employers, the purchasing power premium paid to the employees is tax deductible as a professional expense;
- The employee must not pay any personal social security contribution on the purchasing power premium. The gross amount of the purchasing power premium therefore corresponds to the net amount for the employee;
- For employers, a special social security contribution of 16,5% is due on top of the purchasing power premium paid. This special social security contribution is also tax deductible as a professional expense.
This favorable tax and social security regime makes the purchasing power premium an interesting instrument to grant an extra to your employees.
5. What’s next?
The Act confirming the tax and social security regime of the purchasing power premium still needs to be published in the Belgian Official Gazette but will enter into force with retroactive effect on 1 May 2023.
Employers can grant the purchasing power premium as of 1 June 2023, and at the latest until 31 December 2023.
Before granting a purchasing power premium at company level (e.g. via a CBA at company level or via an individual agreement), we do recommend to wait and see whether at industry level an agreement is reached on the granting of this purchasing power premium. Once it is clear that no purchasing power premium will be introduced at industry level, employers can decide themselves to grant such premium via a company level CBA or via an individual agreement with the employees.