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With the end of the calendar year around the corner and the holiday period coming up, we summarize key actions from an HR/payroll perspective at year-end which are commonly overlooked or where misconceptions are common.
Replacement days for public holidays
For public holidays which coincide with a day of non-activity within the company (generally on a Saturday and Sunday) a replacement day needs to be determined. For 2026, there are 2 public holidays which do not fall on a standard weekday, August 15th which is a Saturday and November 1st which is a Sunday. As such, most companies will need to determine a replacement day for these 2 public holidays.
While replacement days can be determined on a sectoral level (rarely applied), it’s usually decided on company level, in consultation with the works council, the union representatives or the employees collectively. If no decision is taken on a collective level, the employer can agree on the replacement days individually with each employee.
In absence of any agreement, the next day of normal activity within the company is used as a replacement day (as such, the public holiday of August 15th would be replaced with Monday, August, 17th of August and November 1st would be replaced with Monday, November 2nd).
The replacement day must be communicated to the employees before December 15th (dated and signed bulletin posted in a location accessible to the employees, annexed to the work regulations and communicated to the labor authorities within 8 days).
Transfer of time off
An annually recurring question is what to do with time off that is still open at the end of the year. A good rule of thumb in that regard is that only time off which is granted based on an (individual or collective) agreement is transferrable.
Below, you will find an overview of the rules which are applicable in the majority of cases (specific circumstances of an individual case or sector/company level exceptions are not taken into account):
| Legal vacation days (4 weeks per year for employee with full vacation entitlement) | Non-transferrable To be taken before the end of the calendar year. Limited exceptions in case of suspension of the employment contract. |
| Working Time Reduction (WTR) Days (Compensation for time structurally worked in excess of the standard work regime – e.g. structurally working 40h/w in a 38h/w standard work regime is compensated by 12 WRT days/year). | Non-transferrable To be taken before the end of the reference period, which in many cases coincides with the calendar year. |
| Compensation for overtime | Non-transferable To be taken before the end of the reference period during which the overtime was accrued (standard reference period is a calendar quarter). |
| Extra legal vacation day | Transferrable Company level collective labor agreement, company policy, work regulations and/or individual agreements to be taken into account. |
| Sectoral vacation days (e.g. seniority days) | Transferrable Transfer rules included in sectoral collective labor agreement (if any) to be taken into account. |
December recalculation for vacation pay of part-time employees
Belgian vacation rights are built up during vacation service year X, to be taken during the following year, vacation year X+1.
When the work regime of an employee who has built up vacation rights during vacation year X is reduced in year X+1 (e.g. from full-time to a part-time work schedule of 80%), the following needs to be taken into account:
- The number of vacation days (with single vacation pay) is pro-rated in accordance with the reduced work regime;
- The double vacation pay, if not yet paid out, will be calculated based on the new part-time salary (usually in May or June).
In other words, the employee may receive single and double vacation pay in vacation year X+1 which is lower than they would receive if they still worked full time. As a result, a recalculation of the single and double vacation pay is required in December to ensure the employee receives the full vacation pay to which they are entitled based on their employment during vacation year X. This is the so-called first December recalculation.
The required calculation entails the following steps:
- For the single vacation pay: the single vacation pay due for vacation days taken during the on-going vacation year is offset against 7,67 % of the total gross salary of the vacation service year;
- For the double vacation pay: the double vacation pay already paid in May/June of the on-going vacation year is offset against 7,67 % of the total gross salary of the vacation service year;
If there is any excess in either calculation, the employee is entitled to receive this vacation payment as an additional payment in December.
Additionally, if the change in work regime does not take place as from the beginning of January, a part of the vacation rights which the employee accrues during vacation service year X+1 will also be based on the original work regime (full time in the example we mentioned), and a part will be based on the reduced work regime (80% in our example). As a result, in those cases, a second December recalculation will be necessary in vacation year X+2.
Consequently, a reduction in an employee’s work regime can lead to the requirement for a December recalculation during the year in which the change of the work regime took place, as well as in the next year.
Cost proper to the employer – reporting obligation on tax forms
As of income year 2022, the actual amounts of all reimbursements of so-called costs proper to the employer need to be reported on the tax forms 281.10 for employees and forms 281.20 for company directors, regardless whether these reimbursements are being processed through the payroll or not.
With this obligation, the tax authorities aim to get a better understanding of the amounts that are granted as a reimbursement of costs proper to the employer and, in practice, to ensure the same costs are not being covered by different reimbursements (double dipping).
In view of the correct drafting of the tax forms, it is recommended to already start reviewing whether reimbursements were made based on supporting documents and whether payments were processed outside of the payroll during the year 2025. A complete overview must be provided to the payroll agency in due time.
Key takeaways
Given the above, the following actions are advised:
- Determine the replacement days for public holidays based on process relevant for the company and communication to the employees by December 15th;
- Remind employees that they are obligated to take their time off before the end of the year, and that generally speaking only extra-legal vacation days can be transferred (in line with the relevant policies or agreements);
- Determine if a (first or second) December recalculation is needed for any employees and instruct your payroll provider;
- Check whether any new employees have started with the company and verify whether an additional payment or deduction of exit vacation pay is required.
- Prepare complete overview of expenses/reimbursements of costs proper to the employer in view of the correct draft of tax forms 281.10/281.20 and inform the payroll agency accordingly.
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