1. Exemption from social security contributions and deductibility for the employer
Gifts in kind, in cash (but in the form of bank money, such as a transfer, for example, and not two 20 euro notes slipped into an envelope) or in the form of payment vouchers (gift vouchers) awarded to the The occasion of Saint Nicholas, Christmas or New Year are exempt from social security contributions on the part of the employer provided that their total annual amount does not exceed 40 euros per worker. “This is an annual limit. We could imagine that an employer gives 20 euros for Saint Nicholas' Day and 20 euros for Christmas.“This annual ceiling can be increased by 40 euros per dependent child of the worker.
These gifts cannot be linked to the worker's performance. It is also a collective benefit which must be granted to all workers or a category of workers.
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When it comes to gift vouchers, these must also meet the following conditions: they can only be exchanged with companies that have previously concluded an agreement with the issuers of these vouchers; they must have a limited validity period; and they cannot be paid either totally or partially in cash to the worker.
This end-of-year gift is also deductible for the employer as long as it does not exceed the amount of 40 euros (+ 40 euros per dependent child) and meets the same criteria.
2. No taxation for the beneficiary worker
These gifts in principle constitute a taxable benefit of any kind. They are therefore subject to tax for the beneficiaries. As an exception to this principle, certain benefits qualified as “social benefits” or minimal benefits are not taxable. The amount of 50 euros can serve as a reference. “While we are talking about 40 euros for the employer…”, notes Isabelle Caluwaerts. Note that the tax authorities consider that deductible gifts and gift certificates are automatically tax-exempt for the worker.
3. What about other holidays?
A gift can also be given on other holidays, such as a votive celebration in use in the profession concerned (for a patron saint, for example), a birthday, etc. The employer then pays social security contributions but from a tax perspective, the gift, which must be granted to everyone, is not subject to tax for the worker if it is below 50 euros and is deductible for employers if it is less than 40 euros.
“If the company decides to spoil its workers more, on the occasion, for example, of its 50th birthday, it can submit a request to the tax authorities for a tax ruling. We have seen agreements for amounts of up to at 500 euros”says the expert.
4. Donations for other circumstances
The employer can also grant donations. “They serve another purpose, such as showing sympathy towards colleagues, and have an individual notion which relates to the private life of the worker: a wedding, a birthday, a birth, a surgical intervention…”, indicates Isabelle Caluwaerts. The generosity must be granted spontaneously. This is not a right for the worker. From a social point of view, the gift is not subject to the ONSS. “But it must not be hidden remuneration.”mentions Isabelle Caluwaerts. From a tax point of view, the amount is, in principle, not deductible for the employer and is not subject to tax for the worker if we remain within the notion of a minimal benefit, i.e. 50 euros .
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In addition to these gifts, the employer can also grant meal vouchers, culture or sports vouchers, an incentive, a bonus, etc. “But, here, we are still in other systems from a fiscal and social point of view”underlines the expert.
5. Towards a simplification of the system?
Are end-of-year gifts common? Not so much if the NSSO figures are to be believed. “In 2023, only 7% of workers will have benefited from it”indicates Isabelle Caluwaerts. “The amount of these end-of-year gifts must appear in the worker's individual account. However, many companies distribute chocolates on Saint Nicholas Day. One may wonder if the amounts spent are always mentioned on the individual account”adds the expert, who also addresses the question of the future. “Some partners of the future government coalition have already mentioned the simplification of the system or the elimination of certain exempt checks, to compensate for an increase in meal vouchers. To be continued…”
