Be Aware - August 2026

Are social security contributions due on benefits granted by the parent company of the employer ?

In multinationals, management often has an employment contract with the Belgian subsidiary of the group, in the framework of which this Belgium employer pays them the agreed remuneration package, and on top of this, the parent company of the employer grants them (generally equity related) benefits.

The question arises then whether these benefits granted by the parent company are subject to social security contributions.

The traditional view is that benefits granted by the parent company of the Belgian employer aren’t subject to social security contributions. The Belgian National Office for Social Security often challenges this position, and in a judgement of 26 June 2026 the Supreme Court followed the position of the National Office that social security contributions are due.

The text of the legislation

Article 23 of the Act of 29 June 1981 holding the general principles of social security for workers stipulates social security contributions are calculated on the remuneration the worker is entitled to. This Act defines “remuneration” by referring to the Act of 12 April 1965 on the protection of workers’ remuneration. Article 2 of this Act of 12 April 1965 on its turn states “remuneration” means the remuneration or the benefits in kind “the worker is entitled to in the framework of the employment relationship at the expense of the employer.”

As the legislation stipulates social security contributions are only due on benefits “at the expense of the employer,” the traditional view holds benefits granted by the parent company are exempt from social security contributions, provided the Belgian employer doesn’t intervene in the financial cost or the administration of the benefit.

The legislation does, however, not define “at the expense of the employer.”

It was always beyond dispute this condition is met if the employer directly or indirectly (when the parent company grants the benefit and charges the cost of the benefit back to the Belgian employer) pays the benefit. The case law was less clear if the employer didn’t intervene in the cost of the benefit but played a role in its administration.

Although the legislation remained unchanged, the National Office for Social Security broadened its position and considered all benefits “granted as a consequence of the work performed in the framework of the employment contract with the employer or related to the function held by the worker” were at the expense of the employer and therefore subject to social security contributions.

The Supreme Court judgements of 5 September 2022

The case concerned a US parent company granting benefits to staff of its Belgian subsidiary and considering no social security contributions were due based on the argument the benefit wasn’t at the expense of the employer. The Employment Appeal Tribunal of Gent followed this view.

In its judgement of 5 September 2022, the Supreme Court held that, provided a benefit isn’t the counterpart of the work performed in the framework of the employment contract, it’s only part of the remuneration when at the expense of the employer. The Employment Appeal Tribunal of Gent hadn’t examined whether the benefit was the counterpart of the performed work, so the Supreme Court annulled its judgement and referred the case to the Employment Appeal Tribunal of Antwerp. The latter also considered the benefits were exempt from social security contribution, but the National Office for Social Security lodged a second appeal before the Supreme Court, leading to the judgement of 29 June 2026.

The Supreme Court judgements of 29 June 2026

In its judgement of 29 June 2026, the Supreme Court held that “remuneration” should be construed as the counterpart of the work performed by the employee under the employment contract.

As the assessment by the employer on the performance by the employee was an important element in the decision to grant the benefit, the Supreme Court concluded the Employment Appeal Tribunal of Antwerp had wrongly applied the law by considering the benefits involved would fall outside the notion of “remuneration” and would therefore from exempt of social security contribution. The Supreme Court annulled the judgement by the Employment Appeal Tribunal of Antwerp and referred the case to the Employment Appeal Tribunal of Brussels.

Conclusion

Belgian law doesn’t have a system of binding precedents. One can nevertheless expect that if the National Office for Social Security noticed a company has a system similar to the judgement of 29 June 2026, they would claim the payment of the social security contributions due on this benefit. This claim against the Belgian employer will cover both the employer contribution of around 27%, the employee contribution of 13.07% and interests due to the late payment. They could also claim the contributions due should be increased by 10% for late payment.

Multinationals with a system where benefits are granted by the parent company should preferably reassess their strategy and assess whether changes to the remuneration policy appropriate.

Invoking the argument a benefit wouldn’t be the counterpart of the work under the employment contract can only be a convincing argument if the criteria for the benefits and the communication about it don’t include references to work-related targets.

The impact on holiday pay

Although this case concerned the question whether social security contributions are due, it has an indirect impact on employment law. Benefits excluded from the calculation basis of social security contributions are also excluded from the calculation basis of holiday pay.

If the argument for defending a benefit granted by the parent company is exempt from social security contributions becomes weak, the same holds for the argument no holiday pay (15.67% of the benefit) would be due.

Stock options in the sense of the Belgian Act of 26 March 1999

Finally, we point out the Belgian act of 26 March 1999 has a specific tax and social security regime for stock options. This regime wasn’t applicable in the cited cases of 5 September 2022 and 29 June 2026.

If applicable, the Act of 26 March 1999 expressly states that stock options in the sense of this Act are exempt from social security contributions (so also holiday pay).

 

Burden of proof when claiming sales representative entitlements in Belgium

Sales representatives can have considerable extra entitlements compared to other employees. Upon termination, they might be entitled to a clientele indemnity, which is compensation for the value of the clientele the sales representative developed (as the employer will normally continue to receive orders from these clients after the sales representative has left).

This clientele indemnity is three months during the first five years as sales representative, increased by an extra month per extra started block of five years’ service. For an employee with 11 years of service, the notice period is 36 weeks. A sales representative with the same 11 years of service could nevertheless (on top of this notice period) be entitled to a clientele indemnity of five months’ remuneration.

On 2 June 2026, the Employment Appeal Tribunal of Brussels issued a judgement illustrating how the 1978 Act on Employment Contract defines sales representative narrowly and implies a difficult burden of proof if an employee pretends to be a sales representative and claims sales representative status.

The definition of sales representative

Article 4 of the 1978 Act on Employment Contracts defines sales representative as “a worker who undertakes to prospect and visit clients with a view to negotiating or signing business contracts.”

A crucial point of this definition is “prospect and visit” clients, compared to “negotiating or signing.”

• Physical travelling is required to be a sales representative. An employee who prospects clients online from the office or from their own home isn’t a sales representative.
• It is on the other hand sufficient to either negotiate or sign contracts with clients. An employee who handles the negotiations is a sales representative, even if only staff at the head office handles the signing of client contracts.

Sales representation should be the main task. An employee mainly handling technical aspects or a manager mainly managing other employees and only occasionally personally attending external meetings with clients isn’t a sales representative.

The burden of proof

An employee claiming the benefits of sales representative status in principle bears the burden of proof concerning the fact their function falls within the definition of sales representative.

This is, however, only the case if the employment contract doesn’t expressly state the employee is a sales representative. An employer is always free to grant extra entitlements to an employee, on top of the statutory entitlements. If an employee is in reality not a sales representative, but the employment contract states the employee is a sales representative, the employer should respect the entitlements of the employee resulting from sales representative status.

The rules on sales representative are hand mandatory law, so they can’t contractually be excluded. Even if the employment contract expressly states the employee is not a sales representative, the employee can still claim the benefits of sales representative status when establishing the actual content of the function differs from the contract.

The assessment for a “chief market officer”

In the case at hand, the employment contract mentioned “chief market officer” as function, so the employee had to prove his day-to-day work fell within the definition of a sales representative.

This can be proven by all legally acceptable exhibits, notably:

• An agenda mentioning numerous external client meetings during a relevant period.
• Reports of client visits.
• Evidence confirming extensive travelling, for instance fuel card statements or expense notes.

In the light of the definition of sales representative, the Employment Appeal Tribunal considered in its judgement of 2 June 2026 the following elements irrelevant:

• Client lists, as these lists merely show clients purchased products, but not that the employee personally visited them.
• For the same reason, the numerous emails whereby the employee sent contract proposals to clients were irrelevant.
• The employee headed the commercial department but had no sales representatives reporting to him. The Employment Appeal Tribunal considered this irrelevant, as a company doesn’t have any sales representatives if all client contracts are negotiated and signed through email.

The Employment Appeal Tribunal on the other hand pointed out negotiations of long-term contracts in the IT sector (in which the employee was active) require extensive technical preparation and the exchange of numerous versions of lengthy contracts. It therefore considered the low frequency of physical meetings as normal in this business.

The conclusion of the Employment Appeal Tribunal was that the employee did not establish he was a sales representative and no clientele indemnity was due.