The benefits of introducing a non-recurring result-tied bonus (NRRB) plan within a company are not to be overlooked.
Any employer wishing to award an employee a net bonus of 500 EUR will very likely see the associated costs triple the actual bonus amount (taking into account withholding taxes, employee and employer social security contributions). Within the framework of a NRRB plan, only a special social security contribution of 33% is due on the bonus amount (in other words the total cost is only 665 EUR for the same net amount of 500 EUR).
However, the following points require particular attention:
- Compliance with all formalities included in collective bargaining agreements 90 and 90bis remains crucial. Should any of these be violated (e.g. the plan was not deposited with the government) and no correction be made in due time (or a correction is simply impossible), the bonus will be re-qualified into an ordinary one, leading to payment of ordinary social security contributions and taxes on the total amount paid out.
- The bonus is not considered as salary within the framework of the basic wage-rate regulation, meaning that a company can use the NRRB to provide additional benefits to its employees while maintaining its compliance with salary moderation rules.
- All formalities must be fulfilled before a third of the reference period has expired. If the company wants to use the calendar year as reference period, the deadline is 30 April 2012. However, this does not mean that no plans can be introduced after this date. By adapting the reference period, companies will give themselves more options. For example, for a reference period which runs from 1 April to 31 December, the deadline is 30 June.
