Reduction target group first engagements
May 2022 – Since 2016, you can benefit from a not insignificant reduction in employer social security contributions for the first six engagements. Several changes went into effect earlier this year.
First or additional commitment
Until 2021, you could benefit from a total exemption from basic contributions for the hiring of a first worker. This exemption was unlimited in time.
A flat-rate reduction was granted for a certain number of quarters for the next five employees (second to sixth employee).
However, the granting of this reduction was subject to certain conditions: the new worker could not replace a worker who had been employed in the same company during the four quarters preceding the quarter of hiring. It had to be an additional engagement. In other words, during the four quarters preceding your first engagement, you must not have made any employer contributions. For your second worker, you had to have made contributions for only one worker in the four quarters prior to the engagement, etc. In principle, this condition had to be met at the level of the technical operating unit. However, this notion had not been defined.
First commitment: reduction now capped
The reduction in social security contributions is now capped at 4 000 euros per quarter.
In other words, the total exemption from basic employer's contributions remains applicable if the gross monthly salary does not exceed approximately 5 330 euros.
However, this exemption is still unlimited in time.
Second to sixth employee
The reductions for the second to sixth employees remain unchanged. They were already capped and limited in time:
First five quarters: 1 550 euros (second worker) and 1 050 euros (third, fourth, fifth or sixth worker) ;
The next four quarters: 1 050 euros (second, third, fourth, fifth or sixth worker); and
Four subsequent quarters: 450 euros (second, third, fourth, fifth or sixth worker).
Excluded workers
Until now, certain temporary workers were also eligible for reductions. However, the following categories of workers are already excluded from this measure since 2020:
workers until December 31 of the year in which they reach the age of 18;
apprentices in the framework of dual education;
domestic workers;
student jobbers, IVET contracts, volunteers;
certain trainees;
persons subject to compulsory part-time education; and
casual workers in the agricultural and horticultural sectors.
This list now includes two new categories: occasional workers in the hotel and catering sector and flexi-job workers. These categories of workers are therefore not entitled to reduced social security contributions.
Moreover, these workers must not be taken into account when determining the number of workers already employed in your company.
Notion of technical operating unit (TOU)
To know if you are a new employer for a first worker or to determine the rank of a new worker (second, third, fourth, fifth or sixth), you must not limit yourself to the legal entity. You should base your determination on a broader entity, namely the technical operating unit or TOU. If your company is part of an TOU, you will need to consider the entire TOU to determine whether you qualify as a new employer, to specify the rank of an engagement (first, second, etc.), or to determine whether or not the engagement can be considered a replacement.
Legal entities are considered to be part of an TOU if they:
have persons in common (social link), such as workers moving from one entity to another or workers pursuing the same activity as self-employed; and
have activities of the same or complementary nature (socio-economic dependence), such as banking subsidiaries subdivided into different subsidiaries or an independent IT department within the same group.
These may be legal entities that exist simultaneously or legal entities that succeed one another.
In order to be eligible for the reduction, the new employee cannot replace an employee working within the TOU. It must therefore be an additional engagement.
But how do you determine whether or not it is a replacement within a TOU? The following steps should be taken. First, you must determine the maximum number of workers simultaneously employed within the TOU during the twelve months (day for day) preceding the engagement. Note that the new law has introduced a tolerance of up to five calendar days over which a temporary increase in the number of employees within the twelve-month reference period is not taken into account. In concrete terms, this means that the five days with the highest number of employees are not taken into account for the determination of the maximum occupation during the twelve-month reference period.
The total number of workers hired by the new employer on the first day must then be taken into account and the workers who would still be employed within the TOU by other employers must be added.
If the result obtained in the second step is at least one unit higher than the number determined in the first step, you are entitled to the first target group reduction for a first (second, third, fourth, fifth or sixth) worker.
Calculation
The reduction is not tied to a specific worker. The employer can therefore designate, each quarter, the worker to whom it applies: when a worker leaves the service and is replaced by another worker, the reduction applied to the worker who left the service is continued for the new worker.
Transitional regime
In principle, the right to the target group reduction for an engagement occurring before January 1, 2022 is maintained. The new rules regarding the taking of rank in case of TOU do not apply to the past. In other words, where the right to the reduction was opened before January 1, 2022, the possibility for a TOU to have several first commitments for the same rank in different legal entities is maintained.
The right to the reduction for the first commitment opened before January 1, 2022, in a case that would no longer be considered under the new rules is also maintained. The right to the reduction opened before 2022 by a flexi-job worker can be continued after December 31, 2021 for an ordinary worker. However, as the flexi-job worker is no longer taken into account for determining whether there was an occupation for that particular rank during the previous twelve months, the entitlement can also be opened again if all the conditions are met.
