Target-group reduction for a first hire: the benefits

You have just found your first employee. Someone who fits your business perfectly, who you trust, who could start tomorrow. But then you start doing the maths. Gross salary, NSSO contributions, insurance, payroll social secretariat. And before you know it, you are wondering whether you can actually afford it.

Sound familiar? Then this article is for you.

Because here is what many new employers do not know (or find out too late): the government gives you a substantial discount on your social security contributions when you hire staff for the first time. It is called the target-group reduction for a first hire, and it can save you thousands of euros a year.

In this article you will discover exactly how much you save, which employees the reduction applies to, what changed in 2026, and how to claim it. No vague legal jargon, just concrete amounts and scenarios.

What is the first-hire target-group reduction?

The target-group reduction is a federal measure that gives employers a discount on their employer NSSO (National Social Security Office) contributions when they take on their first employees. The goal? To lower the threshold for hiring staff, especially for small businesses and start-ups.

In practice, this means that, as an employer, you pay lower contributions to the NSSO. Not a symbolic amount, but a serious saving that can reach €8,000 a year for your first employee alone.

Let's step back for a moment: where do those employer contributions actually come from? As an employer, on top of your employee's gross salary you pay a percentage to the NSSO. That money funds social security: pensions, health insurance, unemployment benefits. The target-group reduction lowers that amount, which brings down your net labour cost. Want to know more about how those contributions work exactly? Then read our article on calculating NSSO contributions.

How much do you save per employee?

Here is the key point. The amounts differ depending on whether it concerns your first, second or third employee. Below are first the amounts as they applied until 30 June 2026. What applies since 1 July 2026 is set out in the next section.

First employee

Until 30 June 2026, you received a target-group reduction of up to €3,100 per quarter for your very first employee. The big advantage? This discount is unlimited in time. As long as that person is employed by you (and you meet the conditions), you keep enjoying the reduction.

On an annual basis, that was a saving of up to €12,400. Since 1 July 2026, it is up to €2,000 per quarter, including for a first employee hired earlier (see below).

Second employee

For a second employee who started before 1 July 2026, a tapering discount runs over 13 quarters:

• Quarters 1 to 5: €1,550 per quarter
• Quarters 6 to 9: €1,050 per quarter
• Quarters 10 to 13: €450 per quarter

Total saving over the full period: €13,750. Not bad for a measure where all you really have to do is enter the right code on your DmfA (multifunctional declaration) return.

Third employee

For a third employee who started before 1 July 2026, the discount is slightly lower, but still substantial:

• Quarters 1 to 9: €1,050 per quarter
• Quarters 10 to 13: €450 per quarter

Total saving: €11,250 over 13 quarters.

Fourth, fifth and sixth employee

This is where it gets legal. Since 1 January 2024, the discounts for the fourth, fifth and sixth employee have been abolished. But there is good news: since 1 July 2026 there are discounts again for the fourth and fifth employee (more on that later).

Want to calculate what your total labour cost becomes with these reductions? Take a look at our guide on calculating labour cost for a complete overview.

What changed in 2026?

The federal government reformed the target-group reduction through the Programme Act of 30 May 2026, published in the Belgian Official Gazette on 1 June 2026. The changes have applied since 1 July 2026. These are the main adjustments:

First to third employee:

The discount for your first employee dropped from €3,100 to a maximum of €2,000 per quarter. It does remain unlimited in time, which is positive. The lower amount also applies to a first employee who was already on the payroll before 1 July 2026. For a second and third employee who starts on or after 1 July 2026, the discount is a maximum of €1,000 per quarter, over 12 quarters within a period of 20 quarters. If the discount for your second or third employee was already running before that date, you keep applying the old amounts.

Let's not beat around the bush: this is a serious cut. Where you used to save €12,400 a year for your first employee, it is now €8,000 a year. That is €4,400 less.

Fourth and fifth employee:

There are discounts again for the fourth and fifth employee. The maximum reduction amount is €1,000 per quarter, over 12 quarters (three years). That is a total saving of €12,000 per employee.

This is a positive change for growing companies that want to take exactly that step from three to five employees. Want to know more about the employer contributions you pay as a baseline? Our article on employer NSSO contributions in 2026 gives you the full picture.

A practical example after the reform

Suppose you start in September 2026 with your first employee. You then benefit from the new amounts:

• First employee: €2,000 per quarter (unlimited)
• After six months you take on a second employee: €1,000 per quarter over 12 quarters
• A year later a third joins: again €1,000 per quarter over 12 quarters

On an annual basis you save €8,000 + €4,000 + €4,000 = €16,000 in NSSO contributions when you have three employees on the payroll. Still a solid saving.

Conditions: do you qualify?

Not every employer can simply claim the target-group reduction. There are a number of conditions, and they are checked more strictly than you might think.

New employer

You must be a "new employer". That means you had no staff on the payroll during the four consecutive quarters before the hire. Did you already have someone on the payroll last year? Then you do not count as a new employer for that specific rank.

In practice: if you want to hire someone in January 2026 and you had an employee on the payroll until March 2025, then less than four quarters have passed. In that case you do not qualify for a "first employee" discount.

Technical business unit

This is a concept that trips up many employers. The NSSO looks not only at your company, but at the entire "technical business unit" (TBU). That is a group of legal entities that are socially and economically linked to one another.

Do you have, for example, two companies at the same address, with the same manager and comparable activities? Then the NSSO regards them as a technical business unit. Employees at one company then count towards the other.

The honest truth? The concept of the technical business unit is one of the most confusing aspects of this legislation. Our HR experts handle questions about it every day, and the line is not always black and white. When in doubt, it is best to have this checked by a specialist.

No replacement

The new employee may not replace an employee who worked in the same technical business unit during the four quarters before the hire. The government wants to prevent employers from dismissing someone and rehiring in order to obtain the discount.

Reference period of 20 quarters

You have 20 quarters (five years) to apply the target-group reduction, counted from the quarter of entry into service. That gives you flexibility if the employee works part-time for a while or if there are interruptions.

How do you claim the reduction?

Good news: you do not have to submit a separate form or make a special application. The first-hire target-group reduction is claimed via your quarterly return to the NSSO, the so-called DmfA (Déclaration Multifonctionnelle / Multifunctionele Aangifte).

You (or your payroll social secretariat) enter the correct reduction code in block 90109 "employment reduction" of the DmfA. That is it. No paperwork, no waiting times, no approval procedure.

Sounds simple, right? In theory, yes. But in practice we regularly see at Recruit that the wrong code gets entered, or that the discount is forgotten in a new quarter. With more than 15 years of experience in Belgian payroll, we know exactly which pitfalls to avoid. A mistake in the DmfA return can literally cost you thousands of euros in missed reductions.

Contribution towards payroll social secretariat costs

Besides the NSSO discount, the measure also provides a contribution towards the costs of your payroll social secretariat. For your first employee you receive an allowance of €36.45 per quarter. Not the largest amount, but it is there.

Combining with other reductions

A frequently asked question: can you combine the target-group reduction with other NSSO discounts?

Structural reduction: yes. The first-hire target-group reduction can be combined with the structural reduction. That is an automatic discount that applies to all employers based on the employee's salary. Together these two reductions can significantly lower your NSSO bill.

Social Maribel: also combinable. Employers in the non-profit sector can stack the target-group reduction with the Social Maribel discount.

Other target-group reductions: not combinable. You cannot combine the first-hire target-group reduction with another target-group reduction for the same employee. Think of target-group reductions for older employees, long-term job seekers or mentors. You have to choose which one you apply, and usually the first-hire discount is the most advantageous.

Common mistakes (and how to avoid them)

After more than 15 years in Belgian payroll, we keep seeing the same mistakes come back. Here are the five most common ones.

1. Not claiming the discount

It sounds hard to believe, but it happens more often than you think. Employers who handle their own administration, or who work with an accountant who is not specialised in payroll, sometimes simply forget to enter the reduction code on the DmfA.

2. Assigning the wrong rank

If you take on two employees at the same time, who is then the "first" and who the "second"? The order of entry into service determines the rank and therefore the reduction amount. A mistake here can cost you thousands of euros in savings.

3. Ignoring the technical business unit

You think you are a new employer, but your other company already had staff last year. The NSSO regards both as a technical business unit, and suddenly you no longer qualify for the first-employee discount.

4. Letting the reference period expire

You have 20 quarters to apply the reduction. Forget a few quarters, and you lose that saving for good. Those quarters do not come back.

5. Not responding to the reform in time

Since 1 July 2026, different amounts apply per rank. Anyone still calculating with the old amounts makes mistakes in the DmfA: the €3,100 for a first employee no longer applies, not even for a first employee hired earlier.

You can keep track of this administration yourself, or you can leave it to a payroll partner who does this every day. At Recruit we make sure every reduction code is applied correctly, so you do not miss out on a single euro. That saves you not only money, but also the headaches of an incorrect DmfA return.

Strategic hiring: what counts now?

Since the 2026 reform, what matters most is the rank of each employee. A few concrete scenarios.

Scenario 1: you plan your first hire

For your first employee, the date no longer makes a difference since 1 July 2026: you get up to €2,000 per quarter, unlimited in time, even if that employee started earlier. What matters more is that you genuinely count as a new employer (see the conditions above).

Scenario 2: you want to grow from three to five employees

For a fourth and fifth employee who starts on or after 1 July 2026, you are entitled to the discount of €1,000 per quarter for 12 quarters.

Scenario 3: you are considering replacing an employee

Careful. If you dismiss an employee and take on someone else within four quarters, that new person counts as a replacement. No discount. This is a strict rule that the NSSO does not deviate from.

Just started with staff? Then also read our step-by-step guide on registering your first employee so you do not overlook anything.

In short

The first-hire target-group reduction is one of the most important financial incentives for new employers in Belgium. The saving is concrete, the application is simple (provided you use the right DmfA code), and the impact on your labour cost is considerable.

What to remember:

• For your first employee you save up to €2,000 per quarter since 1 July 2026, unlimited in time, even if they started earlier
• Before that, it was €3,100 per quarter
• For a second and third employee who starts on or after 1 July 2026: €1,000 per quarter over 12 quarters; if the discount was already running before that date, the old tapering amounts continue to apply
• Since July 2026 there are discounts again for the fourth and fifth employee
• The application runs via your quarterly DmfA return to the NSSO
• Combination with the structural reduction is possible

The scheme has changed, but the benefit remains substantial. Especially if you plan smartly and apply the right codes.

Frequently asked questions

Can I also get the target-group reduction if I employed staff in the past?

Yes, provided you had no staff on the payroll for at least four consecutive quarters before the new hire. You are then considered a "new employer" again by the NSSO.

Does the target-group reduction also apply to part-time employees?

Yes, but the reduction amount is adjusted to the working hours. For a half-time employee you enjoy half of the maximum amount. The NSSO calculates this automatically based on the data in your DmfA return.

What if I have two companies? Can I then claim the first-employee discount twice?

Not if the NSSO regards your two companies as a technical business unit. And that is the case when a social and economic link exists between the two entities. Same address, same manager, comparable activities: there is a strong chance the NSSO will see this as a TBU.

Do I have to claim the target-group reduction separately?

No. The reduction is claimed via the quarterly return (DmfA) to the NSSO. Your payroll social secretariat or payroll partner enters the correct reduction code. There is no separate form or approval procedure.

Can I combine the target-group reduction with regional premiums?

Yes. The federal target-group reduction is separate from regional employment premiums. In Flanders, Wallonia and Brussels there are additional premiums that you can combine with the NSSO discount. Check with your region for the specific conditions.

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How Recruit helps you with this

No desire to puzzle over NSSO percentages yourself? We get that.

With Recruit:

• Contracts in under 60 seconds: create trial and temporary agency contracts without hassle
• Automatic salary calculation: correct pay in line with current legislation and your Joint Committee
• Dimona (immediate employment declaration) and social documents: we handle all the declarations, you focus on your business
• Personal support: on weekdays from 9am to 5pm, and for priority matters a personal account manager directly on the line
• No fixed monthly costs: pay only for what you use

Try Recruit or get in touch with our HR experts for tailored advice.

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The information in this article is purely informative and does not replace professional legal or accounting advice. Labour legislation changes regularly. The amounts and percentages mentioned are based on the information available as of February 2026 and may change. Always consult the current legislation or contact an HR expert for advice tailored to your situation. Please note: the rules may differ per Joint Committee and sector.