The Belgian parliament approves the first measure announced by the federal coalition agreement of 31 January 2025. It concerns the increase of the maximum amount of hours that students can work to fall under a beneficial treatment regarding social security contributions and taxes.
Context of the measure
In Belgium, "student work" refers to temporary employment undertaken by students under a specific and regulated framework that allows them to gain work experience and earn income while studying. This type of employment is governed by specific labour regulations that provide flexibility and benefits for both students and employers. This framework is only open for individuals enrolled in an educational institution (secondary, higher education, or university).
The income gained by student work is, in principle, exempt from normal social security contributions and withholding tax (for the income tax). Only a solidarity contribution (for social security) needs to be paid of 8,13% (5,42% for the employer and 2,71% for the student). This makes student work very attractive for employers and students as the gross wage almost equals the net remuneration.
In order to prevent abuse of this system and to limit the impact on the labour market and social security and income taxes, the rules prescribe a maximum number of hours that students are allowed to work per year. The law also prescribes a threshold for the maximum annual income for students to be considered to be dependent on their parents (or other caretakers), who enjoy tax benefits due to this and which allows the student to be excluded from income taxes.
Increase of the contingent to 650 hours
The annual threshold regarding the maximum number of hours used to be 475 hours of student work. This contingent was temporarily increased to 600 hours for 2023 and 2024. However, due to a lack of a federal government, the temporary increase was not prolonged, causing the annual contingent to fall back to 475 hours. The new federal government has decided to retroactively increase the contingent to 650 hours for 2025 (and the following years), 50 hours more than during the previous year.
Increase of the income threshold
Next, there will also be an increase of the threshold for the maximum annual income for a student to remain fiscally dependent on the parents. This threshold is set to be increased by doubling the exemption for income from student work from €1,500 to €3,000 so that such income is not taken into account when determining the net amount of the means of subsistence of dependants. This € 3,000 is added to the standard exemption and leads to students being able to earn €6,840 per year while remaining dependent on their parents.
Consequences of non-compliance
If the student works more than 650 hours, as from the 650th hour, the employer will need to pay the normal social security contributions for standard remuneration.
If the annual income is higher than the tax threshold, the student will no longer be deemed to be fiscally dependent on the parents, which will lead to the loss of tax advantages for the parents (or other persons on which the student depends).
Entry into force
The legislative proposal of 21 February 2025 that contains the increase of the contingent and threshold and some amendments are approved by the Social Commission of the Chamber of Representatives and is now submitted to the plenary meeting of the Chamber. The proposal is expected to be approved on 20 March 2025 without further amendments and will normally enter into force retroactively on 1 January 2025.
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