Did you know that there are 13 months in a year? There are in the Belgium salary system!

Even though Belgian Labour Law is pretty straightforward, it has some nuances. If you are planning to operate in the country, you ought to know them in order to avoid unnecessary complications.

When hiring in Belgium, as an employer, you are supposed to pay your employees a 13th-month ‘bonus’. It is a great benefit to the employees, which allows them to enjoy the extra income during holidays when expenses are the highest.

This guide will help you gain a better understanding of what 13th Month Pay is, how it works and who is entitled to receive it.

What is the 13th Month’s Pay?

According to the Belgian labour code, the 13th Month’s pay is a mandatory monetary benefit most employees are eligible for. It equals one-twelfth of the basic salary of an employee within a calendar year. On the contrary to popular belief, it is not free money. Companies simply divide your gross yearly salary by 13 to get your monthly salary.

Who is entitled to receive the 13th Month’s Salary?

All rank-and-file employees, regardless of status, who have worked for at least one month are ought to receive 13th-month pay.

Who is NOT entitled?

Some types of employees are exempt from receiving 13th-month pay. These include:

  • Employees who are already receiving another bonus equal to their one month’s wage at the end of or mid-year.
  • Employees holding managerial positions or the equivalent able to hire, assign, dismiss, suspend, or transfer other personnel.
  • Private drivers and nurses and other personal servants.
  • All employees covered under the civil service law
  • Employees working for commissions or those paid on a project basis or fixed rate for a specific task.

How does the 13th Month Salary work? 

When calculating the 13th-month salary, all earnings and remunerations paid by an employer must be included. Even though allowances and monetary benefits are not considered to be part of the basic salary, they can be included in the 13th month’s pay. Providing, there is an agreement or company policy. 

No social security deductions shall be applied to the employee’s 13th-month pay. In other words, employees receive the gross amount with no deductions. 

Is it taxable?  

Although the 13th-month salary is normally exempt from taxes, any payments exceeding the one-twelfth denomination of the employee’s basic salary are taxable.  

When is the 13th Month’s Wage paid? 

The payment frequency of this monetary benefit is the subject of agreement between a company and its employees. Sometimes it is paid all in one go at the end of the year. Meanwhile, other organizations choose to split the payment into two. However, the required 13th-month salary has to be settled no later than December 24th of each year. 

Is it a bonus? 

No. 13th-month pay is separate from any other company bonuses and is mandatory by law. The employer cannot decide on the amount of the payment. It has to be no less than 1/13th of your gross yearly salary. However, they are free to pay more, should they wish to. 

The 13th-month pay is every employee’s right and if an employer does not pay, is late, or does not pay in full, this shall be considered improper salary retention and a serious offence. Fines apply for non-compliance with this rule. 

What other countries have 13th Month Pay? 

Belgium is not the only country practising the mandatory extra payment. Below is the list of almost 50 countries across 4 continents that have 13th Month rule in place: 

  • Angola 
  • Argentina 
  • Austria 
  • Belgium 
  • Bolivia 
  • Brazil 
  • Chile 
  • China 
  • Colombia 
  • Costa Rica 
  • Croatia 
  • Dominican Republic 
  • Ecuador 
  • El Salvador 
  • Finland 
  • France 
  • Germany 
  • Greece 
  • Guatemala 
  • Honduras 
  • Hong Kong 
  • India 
  • Indonesia 
  • Israel 
  • Italy 
  • Japan 
  • Luxembourg 
  • Malaysia 
  • Mexico 
  • Netherlands 
  • Nicaragua 
  • Nigeria 
  • Panama 
  • Paraguay 
  • Peru 
  • Philippines 
  • Portugal 
  • Saudi Arabia 
  • Singapore 
  • Slovakia 
  • South Africa 
  • Spain 
  • Switzerland 
  • Taiwan 
  • United Arab Emirates 
  • Uruguay