One of the primary goals of the current Belgian Federal Government is to reduce the salary costs of employees in Belgium. To achieve this goal, the Government aims at introducing a legal framework for cost-effective employee profit participation plans (EPPP).

Opportunities and restrictions


An EPPP can grant employees a part of the profits generated over one fiscal year. It will however not grant the employees with any voting or decision-making powers.

The total payable amount to the employees is however capped at maximum 30 percent of the total gross salary cost mass at the end of the rolling fiscal year, mentioned in the social balance sheet of the legal entity of the employer.

All employees should in principle be eligible to participate to an EPPP, with the exception of managers with corporate mandates, liquidators or persons with similar mandates.

Employers can however decide to explicitly exclude employees with less than 1 year of seniority. When all legal conditions are met, the payments resulting from an EPPP will benefit from an advantageous tax and social security treatment:

  • Social security: limited to a personal social security contributions at 13.07 percent-rate from the employee only
  • Subject to reduced payroll tax rate of 7 percent

Moreover, premiums paid under EPPP fall outside the scope of the imposed salary freeze measures (please refer to our previous publication of 23 June 2017 for further detail regarding these salary freeze measures).

In terms of entry into force, it is possible to grant EPPP-premiums calculated on company profits of fiscal years closing on or after 30 September 2017.


The payable amounts under the EPPP cannot replace any existing benefit in kind of the employees, regardless its form or tax or social security treatment. An EPPP will moreover not create any acquired rights for the employees. This basically means that, upon expiry of an EPPP, there is no legal obligation for an employer to set up a new EPPP or to continue granting similar benefits to its employees.

Plan types

Employers will have the choice between two plan types, ie plans providing for identical premiums to all employees, or those providing for variable premiums per defined employee category.

Identical premiums

By "identical premiums", we mean the payment of an identical amount or of an amount corresponding to a fixed and identical percentage of the salary of the employees.

When working with a fixed percentage, an employer is able to define the salary components to which this percentage would be applied (eg the employee's fixed salary only).

This is the most user-friendly plan type, as it can in principle be implemented by unilateral decision from the employer, ie by mere majority decision of the general assembly of the shareholders of the legal entity of the employer, and by informing the employees in writing of the implementation of the EPPP.

The terms and conditions of the plan must be determined in the minutes of the meeting of the general assembly during which the grant of the concerned EPPP was decided. Hence, drawing up a specific company policy would in principle not be legally required to implement an EPPP providing for the payment of identical premiums.

Variable premiums

An employer can also introduce an EPPP providing for the payment of premiums of which the amount or the calculation method varies depending on acquired seniority level, employee grade, wage scale, salary level or educational level, to the extent of course the difference in treatment would not be discriminatory. Further, the maximum payable amount cannot exceed ten times the minimum payable amount under the plan.

Unlike an EPPP with identical premiums, an EPPP with variable premiums cannot be implemented unilaterally by the employer. Indeed, in companies with a trade union delegation, an EPPP with variable premiums can only be implemented by conclusion of a collective bargaining agreement at company level ("company-CBA").

In absence of a trade union delegation, the employer can implement such a plan by concluding a company-CBA or by adopting a so-called "adhesion act" ("toetredingsakte", "acte d'adhésion").

If the EPPP is adopted via an adhesion act, a specific legally defined information and consultation procedure must be followed with the employees first, during which the employees can state their observations regarding the suggested EPPP.

The law also provides for a specific reconciliation procedure, whereby the social auditor and the competent joint committee ("paritair comité", "commission paritaire") would intervene as mediator if the observations from the employees cannot be reconciled with the plan terms suggested by the employer. If these reconciliation attempts would fail in the end, the employer will not be able to implement the EPPP in the suggested form.

Action points

By drawing up an EPPP, employees would receive direct and quantifiable benefits if their employer generates profits. Besides granting a cost-effective benefit to the employees, an EPPP could therefore also prove to be a useful tool to increase the engagement and commitment of employees to their work.

Where deemed appropriate to introduce an EPPP:

  • Decide whether or not to grant employees with identical or variable premiums
  • To implement an EPPP with identical premiums, gather a general assembly of shareholders to discuss and define the terms and conditions of the EPPP
  • To implement an EPPP with variable premiums: start discussions with the trade union delegation to implement an EPPP, or, in absence of a trade union delegation, start the legal information and consultation procedure with the employees directly

The legal reforms discussed in this publication are not definitively approved by Parliament yet, and may be subject to change.