As an employer, you want to motivate your employees by giving them a bonus. Super!

But the cash bonus evaporates for more than 50% due to the high tax rates for the employee!

In order to prevent this, however, the legislator created three ways to optimise the cash bonus from a fiscal point of view: the wage bonus, profit bonus and warrants. Not sure which one to choose?

Use the free Payflip tool below to discover which type of bonus policy is right for your company.

The wage bonus is a bonus that an employer links to the results of the company (e.g. turnover) or a group of employees, and must therefore be paid to all employees (of that group).

Why is this bonus optimisation so interesting? Up to a gross amount of €3,413 the employee does not have to pay any(!) income tax on this.

The employer and employee do pay a social security contribution of 33% and 13.07%.

Need more help in deciding? Feel free to ask us for more information!

With a profit premium, companies can let their employees share in the profits in a tax-friendly way. This bonus payment is either a fixed amount or a percentage of the gross salary. A profit premium must be granted to all employees of a company.

Why is this bonus optimisation so interesting? For the employee, the profit premium is only subject to a social security contribution of 13.07% and a withholding tax of barely 7%. The employer does not owe any social security contribution on this bonus, but cannot deduct it from the corporate income tax.

Warrants are stock options listed on the stock exchange. A company buys warrants from a bank and grants them to its employees free of charge.

Warrants are not subject to social security contributions. However, for tax purposes they are treated in the same way as a cash bonus: the tax is calculated on the value of the warrants at the normal high rates.

Need more help to decide? Feel free to ask us for more information!