Higher social security contributions reductions for the first three hirings

Are you a new employer who wants to hire a first, second or third employee? Then you can temporarily obtain reductions on the employer's social security contributions for these employees. As from 1 October 2012 these reductions will be increased. And as from 1 January 2013 these new increased reductions will also apply for the first three employees which were already in service before 1 October 2012.

Plus plans

If you hire employees, you pay social security contributions on top of their salary. Certain employers and employees categories can temporarily obtain reductions on these employer's contributions. Employers can benefit during several quarters from a lump sum reduction on the employer's contributions when hiring a first, second and third employee. These “target group reductions for first hirings” replace the Plus-one-plus-two-plus-three-plan (plus plans).

All employers in the private sector who employ employees through a employment contract, can benefit from this “target group reduction for first hirings” to the extent they are considered as “new employers”. This means that they should be employers hiring employees for the first time or, during the four quarters prior to the hiring, had none, one or two employees simultaneously.

Reduction amounts

For the first employee you benefitted from a reduction of 1.000 per quarter during five quarters, and 400 during the next eight quarters. Additionally you have right to a premium for the costs of a social secretary.

For the second employee you benefitted from a reduction of 400 per quarter during thirteen quarters.

For the third employee the reduction amounted to 400 per quarter during nine quarters.

Reduction amounts as from 1 October 2012

As from now - 1 October 2012 - when hiring a first employee, you will benefit from a social security contribution reduction of 1.500 during five quarters, 1.000 per quarter during four quarter and finally 400 during four quarters.

When hiring a second employee the reduction amounts to 1.000 during five quarters and 400 during eight quarters.

For the third hiring the reduction is 1.000 during five quarters and 400 during four quarters.

You can benefit from these lump sum reductions for the first, second or third employee within 20 quarters counting as from the first quarter when you first had right to this target group reduction.

These new increased contribution reductions will also apply as from 1 January 2013 to the first three hirings who were already in service before 1 October 2012.

Multifunctional return

The social security authorities calculate the reductions on the social security contributions based on the quarterly multifunctional DmfA returns which employers should send to the social security authorities (abbreviation for Déclaration multifonctionelle/multifunctionele Aangifte). There is no separate procedure to the extent that you and/or your employee fulfill the criteria which give right to these reductions. Who does not comply with all obligations relating to the social security contributions or appeals to moonlighters, can loose its right to the said reductions.