Employers can grant their employees at special occasions gifts in kind, or in cash or in the form of gift vouchers. These gifts do not qualify as salary subject to social security contributions and income taxes. This exemption comes with the condition that the gift cannot exceed a certain threshold. For each special occasion, a different threshold is applied.
With a Royal Decree of 3 July 2018, new thresholds were published for social security purposes only, applicable as of 1 January 2017. It is expected that the same thresholds will become applicable for income tax purposes as well. However, as long as there is no confirmation from the tax authorities in this respect, it is recommended to use the old thresholds.
The social security exemption can be summarised as follows:
With a Royal Decree of 3 July 2018, new thresholds were published for social security purposes only, applicable as of 1 January 2017. It is expected that the same thresholds will become applicable for income tax purposes as well. However, as long as there is no confirmation from the tax authorities in this respect, it is recommended to use the old thresholds.
The social security exemption can be summarised as follows:
Special occasion 31/12/2016 1/1/2017 St. Nicolas / Christmas or New Year 35 EUR per year and per employee (+ 35 EUR per child) 40 EUR per year and per employee (+ 40 EUR per child) Honourable distinction 105 EUR per year and per employee 120 EUR per year and per employeeRetirement (with the exclusion
of bridging pension)
35 EUR per year of service with a minimum
of 105 EUR and a maximum of 875 EUR
40 EUR per year of service with a minimum
of 120 EUR and a maximum of 1.000 EUR
Marriage, legally cohabiting 200 EUR 245 EURExcept for the marriage premium, exceeding the threshold will result in a requalification of the whole gift amount into salary.
Besides the threshold, an employer must also treat all employees of the same category equally. So, if one employee receives a gift of 40 EUR for Christmas, all employees of the same employee category must receive the gift as well.
If the gift is awarded in the form of gift vouchers, the following additional conditions apply:
- The vouchers can only be exchanged with companies that have concluded an agreement with the issuers of these vouchers; and
- They are limited in time; and
- They cannot be exchanged in cash, neither in full or partially.
Attention: there is no obligation to adjust gifts paid between 1 January 2017 and the publication of these new thresholds.
On the other hand, if gifts were paid for a higher amount than the previous thresholds, the new thresholds may result in the possibility to claim a reimbursement for paid social security contributions (e.g. if a gift was paid to an employee for being married of 300 EUR, social security was due on the difference of 100 EUR, whereas with the new threshold, social security would only be due on 55 EUR).
