How much in social security contributions do you pay for your first employee?

Employer and employee: who pays what?

Social security contributions come from both you and your employee. Each month, your employee pays a contribution on their gross salary: 13.07%. You withhold this from their pay. As an employer, you pay an additional contribution on top. This is what your business actually spends beyond the agreed gross salary. Most entrepreneurs know the total labour costs, but often underestimate this employer's share.

How much do you pay as an employer?

For salaried staff in the private sector, the basic employer contribution is 24.92% of gross salary. Additional small contributions apply, such as wage moderation contributions. In practice, most employers budget for a total cost of around 26 to 27% on top of the gross salary. For workers, a separate holiday pay scheme applies: social security contributions include an extra 15.84% on gross salary, which is paid to the Crossroads Bank for Enterprises for annual holidays.

Example 1: hair salon Studio Laure (Brussels)

Laure opens a hair salon and hires her first salaried employee at a gross salary of €2,500 per month. She pays as an employer 24.92% in social security contributions: €623 per month. The total labour cost comes to €3,123 per month. But as a first hire, Laure qualifies for a target group reduction of €3,100 per quarter. Her quarterly contributions (€1,869) fall below this flat amount, so employer contributions disappear entirely. Her actual labour cost: €2,500 per month, equal to the gross salary.

Example 2: IT consulting firm Techflow (Mechelen)

Thomas runs an IT consulting firm and hires his first salaried employee at €3,200 gross per month. His employer social security contribution is €797 per month, bringing total labour cost to €3,997. He also qualifies for the target group reduction of €3,100 per quarter. His quarterly contributions (€2,392) fall below the flat amount, so he effectively pays €0 in employer contributions. His actual labour cost: €3,200 per month.

Target group reduction: the cut for your first hire

Anyone hiring an employee for the first time qualifies for a flat-rate reduction of €3,100 per quarter on employer contributions. The maximum saving is €1,033 per month. How much you benefit depends on the gross salary: at lower salaries, the flat amount covers all employer contributions. As long as that first employee stays, the reduction continues. There is no time limit. Requirements: you had no employees in the previous twelve months as an employer, and your employee works at least 27.5% of a full-time position. The target group reduction also applies to your second and third employee, but is capped at 20 quarters.

Here's how it works for our two businesses:

Studio Laure (€2,500 gross): labour cost after reduction → €2,500/month
Techflow (€3,200 gross): labour cost after reduction → €3,200/month

Note: part-time can lower the flat amount

The €3,100 quarterly reduction applies to full-time work. For a part-time contract below 27.5% of a full-time position, the reduction is lost entirely. Between 27.5% and 100%, the flat amount is calculated proportionally. Check this before you sign the contract, as fixing it afterwards takes more time than getting it right first.

The target group reduction doesn't work automatically: it must be correctly entered in your quarterly social security declaration (the DmfA). An error or a forgotten reduction cannot be corrected without consequences. We handle your social security declarations and make sure the reduction is correctly applied from your first quarterly filing. Book an appointment and we'll lay out your labour cost before you sign.