Change of target group reduction for the first hiring 2024

“New” employers in Belgium who hired a first employee, benefit from a partial reduction from social security contributions during the entire period of employment of this first employee. This is called the 'target group reduction first hiring’.

This target group reduction used to be an almost full exemption of the social security contributions for the employer but has been reduced in 2022 to maximum € 4.000 per quarter.

As from 1 January 2024, this exemption will be reduced again: the capped exemption for the reduction for first employees will be lowered again and the exemption will be limited to the first three new employees.

Reminder of the concepts

Just to reiterate that a new employer is an employer who has never been subject to Belgian social security, or who has not been subject to it for at least 12 consecutive months preceding the starting date of the first employee. Moreover, the company may not belong to the same so-called ‘technical business unit’ with another company.

The term ‘technical business unit’ is also explicitly defined. Two or more companies form a technical business unit together if there is a social link (at least one common person in the companies) and if there is a socio-economic interdependence (this is assessed on the basis of activities, location, clientele, material, personnel management, etc.).

Changes

1. Capped exemption

The employer's contribution for social security amounts to approximately 25% of the gross salary for a white-collar worker in Belgium (depends on the competent joint industrial committee). As from 1 January 2024 the amount of the reduction for the first hiring will be capped at € 3.100 per quarter. This target group reduction may still be applied unlimited in time.

Attention, no transition period is foreseen in the new regulation. This new capped amount is applicable for new hires as from 01.01.2024 as as for current reductions for first hirings.

In practice, the new scheme only affects gross monthly wages of at least € 4.133 a month. For a white-collar worker who earns a maximum of € 4.133 gross per month, the employer will not have to pay social security contributions. For white-collar workers with a higher gross monthly salary, the employer will have to pay social security contributions on the part exceeding the exemption of € 3.100. The following example will make this clear.

Example: A white-collar worker earns € 4.133 gross per month. This is € 12.399 per quarter. We subsequently take 25% of 12.399. This is 3.100. The first € 3.100 is exempt from social security contributions. 

! If you have an employee with a target group reduction first hiring, you do not have to take any action yourself. We will automatically calculate the capped exemption for you. If the salary of the employee, for whom you currently benefit the target group reduction, exceeds the salary cap of € 4.133 gross per month, take into account that your salary costs will increase.

2. Second to sixth hiring

Employers are currently entitled to a target group reduction for the first 6 hired employees. The target group reductions for the second to the third hirings remain unchanged. For these employees, the employers benefit from a lump-sum reduction that is valid for a fixed period.

On the other hand, the target group reduction for the fourth to sixth hiring will disappear. This abolition applies to new hirings from 1 January 2024 and does not apply to current reductions.

Overview

Finally, we give a brief overview of the target group reductions from 1 January 2024 onwards. The following amounts are exempt from social security contributions on the employers' side.

Stay informed of all our news? Sign up for our newsletter: