The new profit premium and the CBA 90 bonus

As announced in our December 2017 article, the Law of 25 December 2017 establishes a new form of employees’ financial participation, allowing companies to give the employees a percentage of their profits as a bonus.

This article provides a brief comparison between the new profit premium and the present CBA 90 bonus (a non-recurring result-tied benefit).

The profit premium can be considered as equivalent to the CBA 90 bonus, although the Law on Salary Freeze explicitly excludes the profit premium from its scope, which is not the case for the CBA 90 bonus. However an employer can grant employees a bonus under both systems, in addition to automatic indexation and a wage scale upgrade. But, unlike the CBA 90 bonus, the profit premium can only be given if the undertaking pays corporate tax or non-resident tax.

The new profit premium bonus must not exceed 30% of gross annual salary. It is a one-off benefit, separate from the employee's salary or any other benefit in kind. Granting a profit premium is at the employer's discretion and not a contractual obligation.

An employer can pay either an equal amount to all employees (an identical profit premium) or a variable amount per employee category (a categorized profit premium). The new legislation simplifies the allocation procedure for an identical profit premium, whereas the categorized profit premium procedure remains is, like the CBA 90 bonus procedure, more burdensome.

Both bonus systems have fiscal and parafiscal advantages. For the employer, the profit premium is exempt from social security contributions, whereas the employee must only pay a solidarity contribution of 13.07%. On the CBA 90 bonus, the employee pays the same solidarity contribution, but the employer must pay an additional solidarity contribution of 33%.

The profit premium is exempt from personal income tax. However, a withholding tax of 7% (15% in exceptional cases) will apply. The CBA 90 bonus is fully exempt from income tax and is a company deductible expense, whereas the profit premium is a non-deductible company expense.

In conclusion, the new profit premium bonus system extends an employer’s options to grant its employees an extra tax-friendly reward. Employers should carefully consider the important differences between the CBA 90 and profit premium systems when making their choice.


Hilde Possemiers, Associate,

Sofie Kusters, Junior Associate,

Jef Degrauwe, Partner,

Related : CMS Belgium


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