© - ATH all rights reserved - Edition 2024 50 EMPLOYER’S GUIDE 2024 PROFIT-SHARING Profit-sharing is a compulsory system for companies with at least 50 employees, optional for others. Profit-sharing is a way to redistribute some of the company’s profits to the employees. The formula for calculating profit is established by law but a different formula may be stipulated by the company under certain conditions. Since 1 January 2020, the threshold of 50 employees is assessed according to the social security staffing rules. If the threshold of 50 employees is crossed, the obligation to implement profit-sharing only applies after 5 years. INCENTIVES Incentives are an optional system which can be implemented in any company, regardless of the number of employees. They are a way of financially involving employees in the company’s performance. They consist of paying employees an additional sum based on meeting targets defined on the basis of precise criteria. The calculation formula is freely set by the parties in the company agreement and must be variable. Ask us about the most appropriate calculation formula for your company. IMPLEMENTATION Incentives and profit-sharing are implemented by an agreement signed by the company. The employer can also join a saving mechanism defined at sector level. In companies with less than 50 employees, incentive schemes can be set up by the employer by unilateral decision, under certain conditions. The agreement or unilateral decision must be filed with the DREETS, in order for the tax and social security breaks to apply. Incentive agreements are signed for a period from 1 to 5 years. Ask us about the content of incentive or profit-sharing agreements and the terms under which they are signed. BENEFICIARIES In principle, all employees of the company must benefit from profit-sharing or incentives. However, a length of service condition, which cannot exceed 3 months, may be required. Sums due are distributed between employees in a uniform way or in proportion with salaries or hours, or by combining several of these criteria. Maximum payment limits per employee are stipulated. EMPLOYEE SAVINGS SCHEMES 24 What you need to know : Employee savings schemes include various mechanisms aimed at involving employees in the company’s results and performance and fostering collective saving. Such employee savings schemes, which are separate from salaries and cannot take their place, are a factor of motivation. They benefit from preferential social security and tax treatment. A distinction is made between profit-sharing and incentives
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