Stricter requirements for partial withholding tax exemptions for shift or night work

The principle is a simple one: under certain conditions, companies in which shift or night work is performed, which also pay employees a premium for such work, will be eligible for a withholding tax exemption at a rate of 22.8% of the taxable wages. However, the new law has resulted in certain changes.

What exactly are these changes?

Split into two separate exemptions

The exemption for shift work is now separate from the one applicable to night work. This also means eligibility for these two systems will be assessed separately. Previously, it was possible to combine shift and night work to achieve compliance with the ‘one-third rule’, for example.

The one-third rule is calculated per hour, not per day

A worker must have spent at least one-third of their working time performing shift work (or night work) for the withholding tax exemption to apply. This calculation should be carried out on an hourly basis and the Law on the reduction of labour costs determines what should be included in the numerator and denominator.

Tolerance of 15-minute break between two successive shifts

A break of up to 15 minutes between successive shifts will be considered acceptable. This addresses the previous confusion regarding the requirement for shifts to succeed each other without interruption.

Granting of minimum premium

From 1 April 2022, eligibility requires night workers to be granted a premium of at least 12% of their contractually agreed gross hourly wage. The minimum premium for shift work is 2% of the contractually agreed gross hourly wage.
Additionally, from 1 April 2024, granting of these premiums must be recorded in a collective labour agreement, the conditions of employment or an employment contract.

Temporary workers

From 1 October 2022, temporary employment agencies will require a worker’s consent to apply the exemption.

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