Employment vs. self-employment in Belgium: What do you need to know?

Hugues Thibaut

Hugues Thibaut, International Affairs Manager at Group S, has been talking to Radio X about employment conditions in Belgium ahead of the British Chamber’s Expat Financial Affairs exhibition in October. You can listen to Hugues’ full interview with Radio X here.

Hugues, what sort of services does Group S generally provide?

We are free of charge contact point for people who have just arrived in Brussels and are not sure of whether they want to become self-employed, open up their own business or hire people. We will advise them on what to do and what formalities are needed to work here.

As part of the so-called EU directive on Services for all the EU countries, we represent a single point of contact for foreigners in Belgium.

For someone who might not be familiar with being self-employed in Belgium, are there any particular things that are differing from other countries that people should know?  

It is actually quite cheap to become self-employed and it can be done within 24 hours. We just need a copy of your diploma and 85 Euros, and you can start tomorrow! Very often I hear from expats “Well, Belgium is so complicated!” and it might be true, but it’s changing and I think it is going in the right direction.

If you are a self-employed person, how does it work in terms of your contribution towards the social security system?

Every quarter you have to pay social contributions, which is based on your assessment of what will be your income. Of course, when you’re starting, you have no idea what your income will be, and I do have to say that it is difficult for newcomers in Belgium. The advice that we give is that you should hire an accountant to help you assess your earnings. Similarly, if you work as an employee in Belgium under an employment contract, you can become self-employed as long as it is a secondary activity. You have your fixed source of income working as an employee and you can develop your own business. In this case, you will pay fewer social contributions.

Is it less favourable to become self-employed than being an employee in Belgium then?

Well it’s changing, but if you work as an employee under an employment contract, then you have full protection. That is why many people are a bit scared of self-employment. For the self-employed, it is a must to have supplementary insurances on top of the social protection and that can sometimes be a deterrent. But as a self-employed, you’re a less expansive because no employer social contribution have to be paid.

When you’ve built a solid business and taken it to the next level and started employing people, what kind of advice would you give on employment conditions?

Setting a competitive salary package that comes with benefits is key. In Belgium we are very creative with this issue precisely because the income taxes are so high. If you offset certain conditions, the employee won’t be taxed on those benefits and the employer won’t pay the social contribution, so it’s very much a win-win situation. Also, as a new employer in Belgium, you will benefit from considerable social reductions. If you’re here in Belgium for the first time, regardless of what you do and your company’s size, you’ll get reduction for the first five employees.

What can we expect to hear from you during your session at Expat Financial Affairs?

A lot of expats don’t understand their pay slip, so we are going to explain the gross salary, what social contributions have to be paid as an employee, and how the income tax is calculated depending on your civil status. For some expats it’s a bit weird to give that kind of private information to your employer, but the employer is obliged to inform the payroll  provider in order to calculate the correct income tax. We’ll also explain how much an employee actually costs an employer on a monthly basis or yearly basis, and how you are de facto paid 14 months’ salary in a year, instead of the 12 you might assume!

If you would like to get personalised expert advice on a variety of areas relevant to your big life decisions as an expat in Belgium, please visit our Expat Financial Affairs website and register to join us on the 3rd of October at Vlerick Business School, Brussels. Sign up already now, and we will keep you updated on the event programme as it gets published and help you prepare for your visit in the best way possible.

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