Payroll Newsletter Q1 2026

1. Indexations January 2026

*For further details regarding the application and conditions of these indexations, please reach out to your designated payroll contact.

2. Overview public holidays 2026

Below is an overview of the Belgian public holidays for 2026:

The employer must pay the normal salary for these days.

When a public holiday falls on a Sunday or another day which is normally a non-working day, it must be replaced by a replacement day on a normal working day. In 2026, this is the case for the public holidays 15 August and 1 November. Please inform your payroll consultant when the employee(s) will take this replacement day so that this could be processed in the payroll.

3. Different types of vacation

In general, Belgian law provides that full-time employees are entitled to 20 legal vacation days each year.

Each employee subject to the Belgian social security regime builds up vacation rights for these days during the ‘holiday service year’ (2025). Only in the following calendar year, the so-called ‘holiday year’ (2026), the employee may take his/her leave days. Whether you get the full amount or only part of it depends on the number of days you worked in the previous year. 

Certain sectors also work with working time reduction days: e.g. an employee working 40 hours in a sector where the 38-hour week is in force, saves two extra hours of leave every week worked. On an annual basis, the employee is then entitled to 12 extra working time reduction days.

The significant difference between legal vacation days and working time reduction days is that the latter are calculated based on the performance in the current year of service (2026), while the legal vacation days are calculated based on the holiday service year (2025).

In addition, an employer may decide to grant his personnel additional (extra-legal) vacation days on top of the legal vacation. The rules to grant these are entirely up to the employer. These holidays are often granted for unofficial holidays (such as second Christmas or bridging days). 

The main advantage of these extra-legal vacation days is that the employer can decide whether the employee can carry these holidays over to the following year or whether this is limited to a certain period. This carry-over is not possible for the 20 legal vacation days (unless in case of force majeure) and the working time reduction days.

If your payroll is already processed by Forvis Mazars, we are setting up the vacation counters for 2026. If you have any questions regarding the above, please contact one of our payroll consultants.

4. Mileage allowance updates as of 1 January 2026

As an employer, a flat-rate mileage may be granted to employees who use their private car, motorcycle, or moped for professional travel. This allowance is exempt from taxes and social security contributions if it does not exceed the maximum rate set by the Belgian authorities.

To better reflect fuel price fluctuations, the mileage allowance has been indexed quarterly/ yearly. The applicable rates are:

Employers choosing the annual system must apply it consistently throughout the full period and cannot switch to the quarterly system before 1 July 2026.

Sector-specific obligations

In some sectors, granting a mileage allowance is mandatory. The applicable rate depends on the sector’s collective agreement or reference to royal decrees:

• Royal Decree 2017: Quarterly indexation applies.
• Royal Decree 1965: Annual indexation applies.

If your sector does not specify a system, you may choose either the quarterly or annual rate but must apply it consistently for the full period. Should you require our assistance regarding this matter, please do not hesitate to contact our Legal and Payroll departments.

5. New rules regarding the lump-sum allowances for foreign business travel

The Belgian tax authorities have implemented some changes regarding the minimum required duration and the lump-sum allowances for foreign business travels. These allowances are non-taxable reimbursements for employees. Foreign business travels can be divided in 2 categories.

• Foreign business travels < 30 days
• Foreign business travels > 30 days but < 24 months

The changes made by the Belgian tax authorities are retroactive as from 1 January 2025.
Abolition of the 10-hour minimum duration requirement.

Previously, for foreign business travels with departure and return on the same day, a minimum absence of 10 hours was required to grant a daily allowance. This condition no longer applies as from 1 January 2025. 

As a result, shorter foreign business trips may now also qualify for a business travel allowance, as long other conditions are met (no other allowances such meal vouchers are received by the employee).

No more reduction for departure and return days

A second key change concerns the treatment of the departure and return days for:

• foreign business trips lasting more than one day, and 
• professional stays abroad exceeding 30 days.

Where previously only 50% of the daily allowance could be granted for these days, employers may now grant the full daily allowance for departure and return days. 

Please note that if accommodation costs / meals / minor expenses are already paid by the employer, the following reductions must still be applied to the lump-sum daily allowance:

• 45% for dinner
• 35% for lunch
• 20% for incidental expenses

6. Home-based work in Belgium, risk of permanent establishment

Remote and hybrid working have become a permanent feature of modern operating models. This evolution brings not only flexibility, but also increased tax risk. In particular, home-based work in Belgium may unintentionally create a permanent establishment (PE) for a foreign employer.

A PE does not arise automatically. However, the Belgian tax authorities assess these situations based on the specific facts and circumstances. As remote work shifts from exceptional to structural, the underlying risk profile changes accordingly and deserves renewed attention.

When does home-based work create PE risk?

A Belgian home office may create PE exposure where there is a sufficiently strong link between the employee’s activities in Belgium and the business of the foreign employer. This is more likely where home working is structural or required, rather than incidental or employee driven.

Risk increases further where the employee performs core business or revenue-generating activities from Belgium, or where the home office can be viewed as being at the disposal of the employer. 

What remains unchanged is that a PE exposure may still arise when an employee habitually negotiates or concludes contracts, or plays a principal role in doing so, while working from Belgium. This may independently give rise to PE exposure, regardless of the existence of a fixed place of business (due to home-work).

Consequences of PE exposure

If a Belgian PE is identified, the company will need to report the allocated profits in Belgian and will be subject to a corporate income tax rate of 25%. 

Our corporate tax experts can further assist you with a permanent establishment analysis or any related questions.

7. Non-recurring result-related benefits: amounts 2026 

Non-recurring result-related benefits are benefits tied to the collective results of a company, a group of companies or of a defined group of employees, based on objective criteria.

This system allows the employer to grant an advantageous bonus based on collective objectives. Up to a certain amount, this bonus enjoys favourable tax treatment. 

The limit amount is adjusted as from 1 January 2026. 

• From a social security point of view, the following contributions are still required:
  • the employee must pay a solidarity contribution of 13.07% on the amount granted.
  • the employer must pay a patronage contribution of 33% on the amount awarded.
    These contributions are payable to the extent that the bonus does not exceed a certain limit amount.

Otherwise, the excess amount will be subject to the levy of ordinary social security contributions.
For 2026, the maximum amount is €4,255 per employee.

• From a tax point of view, no professional withholding tax will be withheld, if the taxable amount does not exceed €3,701 per employee.

8. Student employment – Permanent increase to 650 hours

Previously, students could work a limited number of hours per year under the reduced social security solidarity contribution of 8.14%. This quota, known as the student contingent, was set at 475 hours since 2017 and temporarily raised to 600 hours in 2023 and 2024 as a crisis measure.

Since early 2025, important changes have been introduced to the rules on student work. The number of hours a student can work under the solidarity contribution has been permanently increased from 475 to 650 hours per calendar year. This gives employers greater flexibility in hiring students and offers students more opportunities
to earn extra income.

In addition, the exemption on income to remain fiscally dependent on their parents has been significantly increased. This allows students to earn more without affecting their tax status. 

9. Eco-vouchers – Updated list 

Every two years, the National Labour Council (NAR) reviews the list of products and services eligible for purchase with eco-vouchers, taking into account developments in environmental policy and ecological insights.

The revision includes new items such as energy-efficient tumble dryers (label A or B) and smartphones and tablets with label A. In addition, the “reuse, recycling, and waste prevention” now also includes “subscriptions and memberships for a library, toy library, baby library, or bicycle library”.

The amended list is applicable since 15 July 2025.

10. Meal vouchers – Increase of maximum value

During the Council of Ministers on 11 July 2025, a principle agreement was reached to increase the maximum value of meal vouchers per day, effective from 1 January 2026. What does this mean for you as an employer?

As of 1 January 2026, the legal total value of meal vouchers will increase from €8 to €10 per working day, from which the maximum allowed employer’s contribution will increase from €6.91 to €8.91. The minimal employee’s contributions remains €1.09. This concerns an increase in the permitted maximum amount, not an increase in the automatically allocated value.

The government also introduces an additional tax deduction (in the corporate income tax return) of up to €2 per voucher (i.e. €4 in total), provided that the value is effectively raised above the current €8.91 ceiling. This can offer an interesting optimization, provided the conditions are correctly applied.

11. Copyright – Important changes as of 2026

Income from copyrights is income from the transfer or licensing of the rights to use a creative work by the original owner, his heirs or legatees of copyrights, including neighbouring rights and legally prescribed, compulsory licences.

Under certain conditions, the above can result in a tax advantage on behalf of the author.
Income from copyrights can be considered as movable income (in stead of professional income), up to a gross maximum of €75,360 (i.e. amount applicable for income year 2025). In addition, the authors can benefit from a substantial lump-sum cost deduction on the income received. The remaining balance is subject to a lower withholding tax rate of 15%, which is (in principle) directly withheld by the debtor of the copyright income.

Anno 2026 – what will change?

• From 2026 onwards, digital professions will once again be eligible for the favourable tax regime for copyrights. This means that software developers, analysts and other IT professionals will once again be able to pay part of their remuneration as copyright. The regime will once again apply to works protected under Book XI, Title 6, of the Economic Law Code.
• Furthermore, it was also decided to abolish the flat-rate cost deduction at the same time. The tax burden is therefore increasing (however, still beneficial in comparison with the marginal tax rates on professional income).

12. Changes to medical certificates and guaranteed wage as of 1 January 2026

Following the Act of 19 December 2025 implementing a strengthened return-to-work policy in cases of incapacity for work, there are some significant changes for employers as of 1 January 2026 regarding sick leave.

As of 1 January 2026, an employee on sick leave no longer is required to provide a medical certificate for the first day of incapacity, up to twice per calendar year.
This rule is mandatory and in principle cannot be deviated from by a collective labour agreement or the company’s work regulations. Only a company, which has less than 50 employees on 1 January of the calendar year in which the incapacity occurs, can still require a medical certificate for the first day of incapacity.

Prior to this change, the exemption for providing a medical certificate for the first day of illness applied up to three times per year for companies with more than 50 employees.
Furthermore, as of 1 January 2026, a new period of guaranteed wage does not commence if the employee becomes incapacitated again due to the same illness or accident within 8 weeks following the end of the previous period of incapacity that entitled them to guaranteed wage.

Prior to this change, the law stipulated a shorter period (14 days) during which no new period of guaranteed wage commenced when the employee relapsed. Hence, the new rule considerably extends the timeframe.

The Act of 19 December 2025 also states that as of 1 January 2026, there is no entitlement to guaranteed salary for incapacity due to illness or accident occurring during a period of progressive return to work. In the event of full incapacity, the health insurance fund will intervene immediately.
Prior to this change, the law stated that there was no entitlement to guaranteed salary for incapacity due to illness or accident occurring during a period of twenty weeks from the start of implementation of progressive return to work.

If you have any questions about this topic or need tailored advice, please do not hesitate to contact stefanie.devestel@forvismazars.com or kim.matthys@forvismazars.com. 

13. Social Penal Code: fines will increase significantly as of 1 February 2026

To strengthen the fight against social fraud and social dumping, the Arizona government had planned in its federal government agreement measures such as increasing additional levies and establishing a minimum amount for fines imposed on offenses with aggravating factors.

On 30 December 2025, these changes were published in the Belgian Official Gazette. The amendments to the Social Penal Code will take effect as of 1 February 2026.

1. Increase in financial penalties

The Social Penal Code provides for various general sanctions that may be imposed for violations: administrative or criminal fines and/or imprisonment. All sanctions are grouped into four levels, with level 1 representing the least serious offenses and level 4 the most serious.

To adjust the base amounts of applicable fines to reflect the increased cost of living, a system of multipliers (“opdeciemen”) was introduced. Until now, these base amounts have been multiplied by 8 to arrive at the effective fine amount. From 1 February 2026, these multipliers will be increased to 10. 

This results in the following sanction structure from 1 February 2026:

2. Offenses with aggravating factors

In addition to these financial adjustments, the law strengthens the application of aggravating circumstances.
These circumstances apply when a level 4 offense is committed knowingly and intentionally, or when obstruction of inspection involves physical or psychological violence or threats against a social inspector.
Under the new provisions, in cases where aggravating circumstances are established, the fine imposed cannot be less than 50 percent of the maximum amount prescribed by the Social Penal Code. This applies to both administrative and criminal fines. Taking into account the applicable multipliers, this means in concrete terms that an administrative fine will amount to at least €17,500. A criminal fine will amount to at least €35,000.

The only exception to this rule applies to offenses where the fact that they were committed knowingly and intentionally has already been taken into account as an aggravating element to increase the applicable sanction level from a lower level to a level 4 sanction.

14. Protocol agreement concluded for employees in the Joint Labour Committee for Employees

On 18 December 2025, the social partners in the Joint Committee for Employees (JLC 200) reached a consensus on a sectoral agreement for the period 2025–2026. Below you will find a selection of highlights from this sectoral agreement.

As of 1 January 2026, the calculation method for the year-end bonus is slightly adjusted, including the following: an employee who has resigned or whose employment contract has been terminated by mutual agreement will henceforth be entitled to a year-end bonus (pro rata to their performance during the current working year), provided that the employee has at least three years of seniority within the company.
Until now, a minimum seniority of five years was required.

In two specific cases of short leave the sector adds two extra days to the duration of absences for short leave with full pay, effective from 1 January 2026:

• Death of the employee’s spouse or cohabiting partner, or of a child of the employee or their spouse or cohabiting partner. 
• Death of the employee’s father, mother, father-in-law, stepfather, mother-in-law, stepmother, or those of their spouse or cohabiting partner.

The amounts of the employer’s contribution in the transport costs also change in 2026.
As of 1 January 2026, the employer’s mandatory contribution to the cost of train travel for commuting increases to 100% of the price of a second-class season ticket.
The annual gross salary threshold for the allowance for private transport will also be raised (the amount is not yet known).
Furthermore, from 1 October 2026, the sector will increase the employer’s contribution for employees who regularly use a bicycle for commuting to €0.32 per actual kilometer cycled, with a maximum of €12.80 per working day.

The sectoral agreement has taken effect from 1 January 2025 and will run until 31 December 2026, except for certain measures for which a different start or end date has been set.
The specific implementing collective labour agreements will be signed and filed in mid-January 2026.

If you have any questions about this topic or need tailored advice, please do not hesitate to contact stefanie.devestel@forvismazars.com or kim.matthys@forvismazars.com 

15. New developments regarding the process for termination due to medical force majeure

The Act of 19 December 2025 implementing a strengthened return-to-work policy in cases of incapacity for work, introduces that, as of 1 January 2026, the procedure relating to medical force majeure is able to commence after a period of six months of uninterrupted incapacity for work.

Please note that this is not the only condition which needs to be fulfilled in order for the procedure relating to medical force majeure to be applicable.

The introduction of the condition of six months represents a significant acceleration compared to the former rule, which only allowed such procedure to begin after nine months.

If you have any questions about this topic or need tailored advice, please do not hesitate to contact stefanie.devestel@forvismazars.com or kim.matthys@forvismazars.com 

16. Increasing bicycle allowance as of 1 January 2026

All private sector employees who cycle to work regularly are entitled to a bicycle allowance (under certain conditions).

Beginning 1 January 2026, the maximum socially and fiscally exempt bicycle allowance will rise to €0.37 per kilometer, up from €0.36 per kilometer in 2025. This allowance applies broadly to all types of bicycles, including traditional bikes, electrically assisted bicycles, motorized bicycles, and speed pedelecs. An annual ceiling of €3,690 (indexed for income year 2026) applies to the tax and social security exemption. Any amount exceeding
this limit will be subject to social security contributions and withholding tax.

This adjustment does not immediately affect the generalized bicycle allowance under Collective Labor Agreement (CLA) no. 164, which is indexed to €0.30/km as of January 2026 - still below the new maximum exempt amount of €0.37/km. Social partners may later decide to align the CLA amount with the new ceiling.

The impact will vary depending on:

• Sectoral CLAs that set their own rates;
• Sectoral CLAs that follow the maximum exempt amount;
• Absence of a sectoral CLA (default application of CLA no. 164).

17. Federal mobility budget: key details on upcoming mandatory implementation

Following the last ministerial council meeting of 2025, the Belgian government has confirmed some important elements regarding the mandatory implementation of the mobility budget. While this obligation is now certain, its introduction will be phased and will not apply to all employers immediately.
Please note that draft legislation is not yet available. This update is therefore limited to the key principles announced so far.

What is the federal mobility budget?

Employees entitled to a company car can choose to exchange it for a mobility budget, allowing them to allocate the value of their company car toward an electric vehicle or other eco-friendly alternatives, such as an (electric) bicycle, shared mobility services, or a public transport subscription. Under certain conditions, the budget may even cover rent or mortgage repayments. The amount of the mobility budget equals the actual annual employer cost of the company car being relinquished. Within this budget, employees can make sustainable mobility choices that better align with their individual needs. Until now, employers could freely decide whether to offer a mobility budget. This voluntary approach will soon come to an end.

Implementation timeline: a phased approach

The mandatory implementation will be rolled out in phases based on company size:

• Companies with 50 or more employees must implement the mobility budget by 1 January 2027.
• Small and medium-sized enterprises (15–50 employees) receive an additional year and must comply by 1 January 2028.
• Small businesses (fewer than 15 employees) are free to implement the mobility budget voluntarily, there is no obligation for them.

Mandatory offer requirements

Employers will soon be required to offer a mobility budget to employees who have (or are entitled to) a company car. Although the legal obligation takes effect on 1 January 2026, employers have until 2027 or 2028, depending on company size, to comply. In addition, the obligation only applies to employers who have provided a company car to at least one employee for a minimum of 36 months. This waiting period is already part of the existing legislation and will remain unchanged.

Conclusion

The mandatory mobility budget marks a significant shift in Belgian employment law and corporate mobility policy. While the phased implementation provides time for preparation, employers should start planning now to ensure a smooth transition and leverage this opportunity to create a more sustainable mobility strategy. We will continue to monitor legislative developments and provide updates as draft texts become available and
implementation details are clarified.

For assistance with implementing the mobility budget in your organization, please do not hesitate to contact stefanie.devestel@forvismazars.com or kim.matthys@forvismazars.com 

18. Temporary limitation of automatic wage indexation in 2026 and 2028 

The federal government announced its intention to introduce a new salary indexation mechanism for 2026 and 2028, while maintaining the standard system in 2027. The reform provides that full indexation will continue to apply up to €4,000 gross and to benefits and pensions up to €2,000 gross, but not beyond. Only base salaries or contractual scales will be taken into account to ensure a uniform application of the measure.

Initial indications show that the salary portion above the threshold would no longer follow the standard indexation percentage. Instead, it would be adjusted through an alternative method designed to limit the indexation impact on higher salary brackets while preserving full indexation on the lower portion.

The government also confirmed that an employer contribution will accompany the effort requested for salaries exceeding €4,000. The proceeds will be allocated to the Global Management of the National Social Security (ONSS). Benefits or extra‑legal advantages will not be taken into account in the calculation basis.

Although the initial intention was to apply the new mechanism as early as 2026, the legislative texts will not be approved in time, neither will the sectoral labour agreements be adjusted by all different Joint Labour Committees. As a result, the mechanism will not apply to the indexations scheduled for January and March 2026. In practice, the first effective application of the new system is expected from 2027, followed by a second application in 2028.

In conclusion, while the overall direction of the reform is clear, several practical elements still need to be formally defined. It is therefore encouraged to monitor developments closely in order to prepare for possible implications on payroll planning and HR processes.

If you wish to obtain more information or would like a tailored analysis of potential impact on your organisation, do not hesitate to contact: stefanie.devestel@forvismazars.com or kim.matthys@forvismazars.com 

19. Deadlines