Shift work: a vague definition
If you employ workers in a shift arrangement, you are eligible under certain conditions for a partial exemption from payment of withholding tax of 22.8%.
A number of conditions must be met to satisfy the tax authorities’ definition of shift work.
(Dutch) 'What is meant by shift work, night work, shift/night bonuses and continuous shift work?'
(French) 'What is meant by shift work, night work, shift/night bonuses and continuous shift work?'
For example, one of the criteria is that the shift teams must do the same work in terms of content and volume.
The law does not explain what is meant by the ‘content’ and ‘volume’ of the activity. As a result, these terms have to be interpreted on a case-by-case basis, which often gives rise to legal uncertainty.
This uncertainty was further reinforced by the recent Constitutional Court ruling.
(Dutch) 'Exemption for shift work: a strict interpretation of the concept of ‘the same work''
(French) 'Exemption for shift work: a strict interpretation of the concept of ‘the same work''
With the shift work b scheme, the government now wants to give companies more legal certainty.
Shift work b: an extension of the current rules
To remedy this legal uncertainty, the core cabinet has now approved a ‘shift work b’ proposal.
In addition, the measure should give the next government time to implement a necessary reform.
Choice between two variants of the measure
In concrete terms, it is proposed that the employer will have a choice between two variants of the exemption from payment of withholding tax for shift work:
- The current shift work scheme
- The new ‘shift work b’ variant
‘Shift work b’: a pro rata variant
In variant b, the criterion that successive shifts must do the same work in terms of volume is removed from the definition.
This means that the exemption from payment of withholding tax for shift work can be applied even when the volume of work varies.
However, the amount of the exemption will be reduced on a pro rata basis as the difference in the volume of work between successive shifts increases. The greater the difference, the lower the exemption.
‘Shift work b’: a step-by-step plan for the calculation
To calculate the exemption under the shift work b variant, complete the following steps:
- The amount of the exemption must be calculated using the standard method (22.8% or 25% exemption).
- The difference in the work volume between the shifts must be calculated on a daily basis. The variation is measured with reference to the shift with the smallest volume of work.
Example
On day 1, the work volume of the successive shifts is: 60, 40, 40 employees.
→ The variation on day 1 is therefore: 20÷140 or 14.29%.On day 2, the work volume of the successive shifts is: 20, 10, 30 employees.
→ The variation on day 2 is therefore: 30÷60 or 50%.
- Now calculate the variation in the work volume over the total period covered by the declaration
Example (continued)
[ variation of 20 employees on day 1 + variation of 30 employees on day 2 ]
÷ [ 140 employees in total on day 1 + 60 employees in total on day 2 ]
= 50÷200
= 25% variation
- You must reduce the amount you obtain in the first step by the percentage you obtain in the third step, i.e. in our example by 25%.
As you can see, this will involve extra administrative work.
No separate declaration code
The choice between the existing exemption for shift work and variant b does not have to be expressed by entering a separate code in the second withholding tax return.
The choice of variant will therefore only be reflected in the tax return in the amount of exempted withholding tax entered.
A transitional measure until the end of 2026
This shift work b scheme is a temporary measure that will apply from 1 January 2021 to 31 December 2026.
What can Securex do for you?
This measure is not yet official. We will of course let you know as soon as we have more news.
Sources
