7.5% Additional Tax: The New Risk That Could Increase Your Hiring Costs
Your compensation package could cost more than expected if you do not comply with this new limit. In Belgium, recent legislation now regulates benefits in kind (company car, smartphone, stock options…) within salary packages. The 20% limit does not apply individually to each employee, but at the company level:
• All employees are considered together,
• All company executives are considered together, separately from employees.
Anything exceeding this 20% threshold is subject to a distinct 7.5% additional tax, which can have a significant impact on the total cost of compensation.
Why this rule was introduced
Until now, some companies could offer very generous benefits in kind to reduce taxable salary and social security contributions. This practice complicated taxation and affected the tax base. The new limit aims to:
• Simplify tax and social security management,
• Ensure a fair and transparent distribution of compensation,
• Prevent the excessive use of benefits in kind as a tool for tax optimization.
What this means for your recruitment strategy
For companies hiring new talent, this rule implies:
• A review of compensation packages to remain attractive while respecting the global limit,
• Increased transparency towards candidates,
• Particular attention to social benefits and direct remuneration.
A lever to retain talent sustainably
At Kingsley, we observe that candidates increasingly value clarity and the sustainability of the packages offered. Rather than trying to bypass taxes through complex mechanisms, companies that succeed today communicate clearly about their overall offer: work-life balance, career progression opportunities, and a transparent and compliant compensation strategy. This strengthens candidate confidence and reduces turnover.
If you are planning to hire a new team member and want to build an offer that is both attractive and compliant with tax regulations, we can support you in this strategic approach. Get in touch with our team to identify the profile that will make a difference in your organization.