Payroll proficiency in Belgium
Payroll partners provide counterweight for complex legislation and reward system
The fact that Belgium has an on-average score in our 2022 Payroll Proficiency Index has a lot to do with the country’s long-standing tradition of payroll outsourcing. These seasoned partners help companies to navigate the overly complex legislation and the huge variety of remuneration packages. It’s no coincidence that Belgium scores best for ‘capability’ and ‘partner’, since these two proficiency drivers often go hand in hand in complex payroll environments.
Payroll Proficiency Index scores for Belgium
From daily legal changes to confusing social security
As is in France, legislation also negatively impacts overall payroll proficiency in Belgium. A remarkable 42% of organisations admit the legal maze is making payroll (much) more difficult. Larger organisations (more than 250 employees) in particular struggle to cope. Despite their scale, the far-reaching internal complexity often makes payroll standardisation extremely difficult.
The speed of changes
Legislation tends to change on a daily basis – often with retroactive effect. A trend that is propelled by our fast-changing society. Law makers have less time to be thorough when setting up new legislation. Take the patchwork of corona legislation: in 1 year, unemployment days due to Covid were at different moments either inadmissible, partially or fully admissible for the calculation of vacation rights.
The number of exceptions
Belgium is home to 6 governments, each with their own responsibilities and powers – which makes payroll especially tricky for companies operating in different regions. On top of that, there are over 150 economic sectors that manage binding collective agreements on dismissals, educational leave, minimum wages, etc.
The complexity of the social security system
Social contributions come in different shapes and sizes: basic contributions with or without reductions, and special contributions. The mentioned reductions exist at federal and regional levels. Also important to note in a country that manages that many employee benefits, is that contributions depend on the type of reward (cash, company car, stock options, etc.).
Which aspects relating to social legislation complicate payroll processing the most?
Did you know?
In Belgium, a company can belong to different sectors at once, making payroll even more confusing and prone to errors.
World champions in employee benefits
Salary packages have extended in the last years. On average, Belgian workers have more salary components than other Europeans. Among the most common benefits are company cars and bicycles, meal vouchers, eco vouchers, health insurance and an annual bonus. Many of these result from social compromises: unions want something extra, but employers have little space to increase salaries due to high labour costs.
To what extent is reward making payroll processing easier or more difficult?
1 in 3 Belgian companies
state the remuneration landscape is making payroll (much) more difficult
Payroll outsourcing secures access to expertise
Payroll outsourcing is on the rise all over Europe but remains most popular in Belgium. Only 26.7% of Belgian companies are prepared to completely manage their own payroll. This approach stems from a long history of collaboration with social secretariats, entities that were set up after World War II to collect social and fiscal contributions for the government. This unique private-public tandem still thrives today, with about 90% of private companies affiliated to social secretariats.
90%
of private Belgian companies are affiliated with a social secretariat
In recent years, many social secretariats expanded their offering to become complete payroll partners. This explains why so many Belgian companies outsource (parts of) their payroll. The step is much smaller when you already work together for other aspects and buy-in isn’t an issue. It’s basically an upgrade of an existing service.
More importantly: companies are reaping the benefits. Our 2022 Payroll Proficiency Index reveals a remarkable relation between outsourcing and access to specific knowledge and know-how.
Proportion of companies satisfied with access to specific payroll knowledge and know-how
