The innovation premium extended to 31 December 2024

The Act of 3 July 2005 holding various provisions in relation to the social dialogue introduced the innovation premium. It concerns a premium an employer can give staff members who come up with an innovation that adds value to the employer’s activities. If the premium meets all legal conditions, the innovation premium is exempt from all taxes and social security contributions.

These legal conditions are:

• The premium should be granted for creating something new, which has a genuine added value for the normal activities of the employer.
• The innovation involved should not have been the subject of an offer formulated by a third person in the past.
• The innovation should either be in the implementation stage, there should be a prototype or there should at least already be internal instructions showing which changes will result from the innovation for the normal activities of the company involved.
• The innovation premium cannot be granted to replace another benefit.
• The beneficiary of the innovation premium should have an employment contract with the company granting the premium (temp agency workers are excluded, unless the premium is granted by the temp agency).
• The total amount of the innovation premiums granted by an employer should not exceed 1% of the remuneration paid by the employer.
• The number of workers receiving an innovation premium should not exceed 10% of the total number of workers, although at most 3 workers can be granted an innovation premium for employers with maximum 29 workers.
• The innovation premium can maximum be granted to ten workers per innovation.
• The amount of the innovation premiums should not exceed a monthly remuneration.
• The Federal Public Service of Economic is notified that an innovation premium was granted. The form to be used for this notification is available on the website of the Federal Public Service of Economy.
• The National Office for Social Security should be notified of a list of the beneficiaries and of the amounts involved.

The innovation premium was initially conceived as a temporary regime only applicable up to 31 December 2006. It was repeatedly extended, but the last extension lapsed on 31 December 2022. Under the current legislation, it’s no longer possible to grant an innovation premium as of 1 January 2023.

One of the topics included in the interprofessional agreement for 2023-2024 negotiated by the trade unions and the employer federation, is an extension of the innovation premium for 2023 and 2024. On 26 June 2023, the Parliament approved the Act of 31 July 2023, which amends the Act of 3 July 2005, so innovation premiums are possible during 2023 and 2024. The conditions to be met for the innovation premium to be exempt of all taxes and social security contributions are exactly the same as they were.