The most important obligations that employers have to fulfill towards the NSSO concern the sending in of social security returns containing data on employees in service and the payment of contributions on fixed deadlines.
Declarations, contributions and obligations
Each employer must submit two types of declarations to the NSSO :
- one statement upon the start or end of service of a worker (DIMONA declaration)
- a quarterly declaration of the services and wages of all his staff (DmfA quarterly declaration).
Purpose of the Dimona Declaration
The DIMONA declaration is a communication from the employer to the public authorities on its active work relations. Employers must declare each member of staff hired to the NSSO prior to the entry into service of that worker. Termination of service of must be declared no later than the first working day following the departure or the dismissal. These declarations must be filled out electronically. To this end, employers have the choice between a number of possibilities:
- an interactive application on the Social Security portal site (only in Dutch , French or German )
- a file transfer system (for large volumes)
- staff file
- Dimona mobile
Until January 1 2003, DIMONA was only mandatory for a few sectors. From that date onwards the declaration has become mandatory for all employers.
The authorities keep a work force register for each employer based on the DIMONA declaration. This has made it possible to simplify the administrative obligations of employers:
- a number of documents that employers were previously obliged to fill out and retain have now been done away with
- the link with DmfA makes it possible to immediately check whether a DmfA quarterly declaration mentions all employees.
Which data have to be reported?
For most employees, the DIMONA declaration is limited to the reporting of the starting and final date of their employment.
For occasional employees a more complete declaration is required. The employer must declare the starting and final hour of his occasional workers' services for each day (Full Dimona). In the hotel and catering industry the employer (with the exception of the temporary employment agencies) have a choice between the last-named formula and the system called Dimona Light. This system which is also referred to as Dimona with a time block confers the employer the possibility to declare only the starting hour and the planned duration of the work (more or less than 5 hours). The choice is valid per employer and affects the calculation of NSSO contributions.
DmfA Quarterly Declaration
Purpose of the quarterly declaration
- determination of the amount of social security contributions that the employer must pay to the NSSO for its staff
- a single communication of information on the wages and services of all staff to the authorities.
The contributions serve to finance the various social security benefits (unemployment, health insurance, pension, child allowance, etc.). The NSSO distributes them among the various institutions competent in their branch for these benefits (NEO, RIZIV/INAMI, NPO, RKW/ONAFTS, a.s.o.).
The workers' wage and service information is held at the disposal of all institutions through a network. If a worker must appeal to the social security (due to illness, for example), sufficient information on him/her is available for the institutions allocating benefits. The information need no longer be requested separately. For this reason, the DmfA quarterly declaration is also called the multifunctional declaration.
Deadline for the quarterly declaration
Each employer must submit a declaration to the NSSO each quarter. The declaration may be submitted until the last day of the first month following the quarter. The quarterly declarations must also be filled out electronically. This makes it possible to make the information available on the network very quickly. The employer may choose between submitting his declarations through an interactive application on the portal site or through a file transfer system.
In practice, many employers seek specialised help for both the DIMONA and quarterly declarations. They are affiliated with a social secretariat or appeal to a service provider to submit these or help them to submit these declarations.
Each employer is responsible for collecting and paying the contributions intended for social security, the so-called NSSO contributions. We make the distinction between quarterly and annual contributions.
Employers must withhold the personal NSSO contributions for its members of staff from each pay. The employer must then add the total of its own contributions to this withheld portion. Employers are responsible for transferring the totality of both parts to the NSSO in a timely manner. If, at the time of payment of wages, an employer neglects to withhold employee contributions, he may no longer retrieve them from the worker later.
Total and deadline for the quarterly contributions
Employers can determine the amount of contributions they owe to the NSSO based on their quarterly declaration. The quarterly contributions must reach the account of the NSSO no later than the last day of the month following the quarter. This is the same deadline by which the declaration must arrive at the NSSO.
Advance payment of the quarterly contributions
Most employers must make advance payments on a monthly basis. The advance payments must be paid by no later than the 5th day following each month of the quarter. The difference between the advance payments and the quarterly contributions must be paid by no later than the last day of the first month following the quarter.
The limit that determines whether an employer must make advance payments is a reference sum of approximately € 6200.00. Those having owed at least that sum of contributions during the previous quarter must make advance payments. More stringent rules apply to the construction sector.
Total and deadline for the annual contributions
In addition to the quarterly contributions, employers must pay certain contributions once per year. This concerns:
- a portion of the contributions used to finance the manual workers' holiday pay
- the sums owed by the so-called 'important" employers as part of a redistribution scheme. Each year, the NSSO proceeds to a calculation in order to reimburse these amounts to the employers of smaller firms.
Employers must take the initiative to pay the quarterly contributions. For the annual contributions, the NSSO sends a notification to employers stating the sum due and the payment deadline.
Payments in practice
All payments must be made by transfer to the account of the NSSO. When making their payments, employers must indicate the appropriation of the payment. In the absence of such information, the NSSO will allocate the payment to settle the oldest debts. Late payment of the contributions will lead to the application of a 10 % contribution increase on the amount paid late as well as an interest of deferred payment. Insufficient advance payments will be fined separately.
As regards the calculation, we make the distinction between ordinary social security contributions and “special contributions”.
Ordinary social security contributions
Social security contributions are due to the NSSO on the gross salary received by a salaried worker. The proceeds of these contributions are allocated to the various branches of social security (unemployment, pensions, health insurance, etc.).
These NSSO contributions are composed of:
- workers' contributions
- employer contributions.
The workers' contributions are withheld from the gross salary by the employer. In the private sector, these contributions amount to 13.07 % of the gross salary. Employee contributions are reduced for low salary earners in the form of a “work bonus”. This grants such employees a greater net salary without increasing the gross salary.
Employers must also make NSSO contributions on the gross salary of his workers. In the private sector, these employer contributions amount to ± 32 % of the gross salary.
In the public sector, these contributions may sometimes be significantly lower. This, because certain social benefits are not supported by social security, but paid by the employer itself to its staff (e.g., child allowance, maintenance of pay in the event of illness or accident, etc.).
Employers and employees may not choose freely between manual worker or employee status. It is the nature of the services (manual or intellectual) that determines whether someone is a manual worker or a white-collar worker. For manual workers and assimilated workers, the social security contributions are calculated on the gross salary that is increased by 8 %. The reason for this is that the employer directly pays the (single or double) holiday pay to his white-collar workers. Holiday pay for manual workers is paid out through the intermediary of RJV/ONVA (National Holiday Allowance Office - NHAO). The 8 % increase on the gross salary of manual workers represents the single holiday pay paid out by the NHAO. Through the 8 % increase in the percentage calculated, the employee and employer contributions for the single holiday pay are granted indirectly together with the normal salary. For the NSSO contributions, this is the most important difference between manual and white-collar workers.
Entertainers or artists are also included in the category of workers for whom the social security contributions are calculated on the gross salary that is increased by 8 %.
The 8 % gross salary increase only applies to workers who fall under the private sector holiday legislation. Therefore, it does not apply to most members of staff in the public sector.
For most workers, the NSSO contributions are calculated on the real gross salary. However, a system of contribution calculation based on fixed wages exists for specific groups:
- an example is the agricultural and the horticultural sector. For those sectors, there is a specific system of occasional work. The contributions are not calculated on the gross salary paid, but on a fixed sum per day worked.
- the calculation is also made based on fixed daily sums for certain employees in the hotel and catering industry paid with service vouchers.
What is considered as gross salary?
As specified, the contributions are calculated based on the gross sum of the worker’s wages. However, not all that which an employer pays out to his worker(s) is a wage for which contributions are due.
In concrete terms, wages are all benefits in cash or which can be measured in cash:
- that are granted by the employer to his worker as a compensation for the work provided according to the terms of the labour contract
- to which the employee has a direct or indirect right from his/her employer by virtue of his/her employment.
Therefore, wages are not only the hourly or monthly salary that the worker receives. Contributions are also due on other benefits such as end-of-the-year bonuses, overtime pay, guaranteed sick pay, compensation for dismissal, etc. Benefits not granted in cash but in kind (such as free housing) are also wages. The employer normally pays the wages. In some cases, a portion of the wages (such as end-of-the-year bonuses) is paid by a fund established within a sector. Contributions are also due on those wages.
However, the employer is free to grant certain “benefits” to his worker(s), which are not necessarily subject to NSSO contributions. Rules are established by law to define those benefits for which no contributions are due.
Example : if an employer wants to grant meal vouchers, these vouchers must comply with certain conditions : one voucher per day worked, the employer's contribution may not exceed a certain sum, ... If the vouchers do not comply with these conditions, they are considered as wages. Other examples : end-of-the-year gifts, social benefit supplements, sports und culture vouchers, reimbursement of commuting costs, ...
A complete list of all benefits is provided in the ‘Instructions for the employers’ on the social security portal site but only available in Dutch (Administratieve instructies) and French (Instructions administratives).
In addition, a number of benefits excluded from the definition of wages are available to employers, but special contributions are calculated upon them. Therefore, the normal workers' and employer contributions are not due, but special contributions are due. The most well-known example of this is a company car made available to the worker for private purposes and/or for commuting.
Likewise, sums reimbursed for expenses for which the employer is responsible are not considered as wages. This only includes expenses that workers are obliged to pay and which are the responsibility of the employer. In other words, these are costs that the worker must pay in order to carry out his/her duties (such as travel costs, telephone, etc.). Employers must be able to demonstrate the accuracy of the estimated costs. Those sums, which exceed the amounts of the actual costs, are wages for which contributions are due.
As stated above, normal employer and workers' contributions amount to respectively ±32 % and 13.07 % of the gross salary.
In addition, there exist what one calls 'special' contributions.
They are special because some are not directly destined to the various branches of social security.
Others are only due in certain circumstances. These special contributions may be due by the employer, by the worker, or partially by both.
Examples of special contributions due by the employer include:
- contributions for paid educational leave
- contributions for the Closure of Businesses Fund (FFE/FSO)
- solidarity contributions (CO2 contribution) for the use of a company car
- the contribution for extra-legal pension benefits.
Examples of special contributions due by the worker include:
- the amount withheld from the double holiday pay
- the solidarity contribution for profit sharing
- the special social security contribution.
A special solidarity contribution is due for the employment of students only working a limited number of days per year. This contribution is shared by the student and employer. This contribution is significantly lower than the normal social security contributions.
Reduction of contributions
In order to reduce salary costs for employers, legislators have taken a number of measures since the mid-1980s to reduce employer contributions. This has led to the creation of a number of different systems, each with its own manner of calculation and target group.
Large-scale efforts have been made from 2004 onwards to harmonise a number of sector-independent reductions of employer contributions. This was accomplished by categorising those reductions under a comprehensive contribution reduction.
This comprehensive contribution reduction consists of two types of contribution reductions:
- the structural reduction: this includes a fixed component and a variable component based on the worker's reference salary
- a target group reduction: this contribution reduction grants a fixed contribution reduction depending on certain criteria which the employer and/or worker must meet. Only one target group reduction may be applied for each worker.
A few examples are:
- first jobs
- long-term job seekers
- workers dismissed due to restructuring.
In addition to these harmonised reductions created since 2004, there are still a number of specific reductions. These reductions promote the employment of specific categories of workers.
A few examples are:
- employment in the non-profit sector (social Maribel)
- child minders
- subsidised contractual workers in public administration and non-profit organisations (GESCOs)
More information can be found in the 'Instructions for the employers' on the social security portal site.
Employers do not only have obligations towards the NSSO for each worker he employs.
They must also:
- keep certain social documents (have a look at the website of the Belgian Federal Public Service Employment, Labour and Social Dialogue in Dutch or French ): individual account, personnel register, attendance register, etc.
- notify its employees of provisions regarding privacy protection (Law of January 15 1990 on the establishment and organisation of a Crossroads Bank for social security and the enforcing decrees for that law regarding privacy protection in Dutch or French )
- take out occupational accident insurance with an insurance company authorised in Belgium
- affiliate themselves with a child endowment fund for child allowances (list of child endowment funds for child allowance in Dutch , French or German ).
Furthermore, if they call upon the services of posted employees or trainees directly or through a subcontractor, prior to the hiring of such workers, they must have actual proof of a Limosa declaration . If not, they must submit this declaration themselves to the NSSO (in Dutch , French or German ).