Payroll intermediary: what is it and how does it work?

You've found the perfect candidate for a temporary role. Now the real work starts: drafting the employment contract, filing the Dimona (immediate employment declaration), calculating NSSO (National Social Security Office) contributions, producing payslips. For many employers, that mountain of paperwork feels like a barrier to bringing in flexible staff.

That's exactly where a payroll intermediary comes in. You keep control over who works for you and what they do, but the paperwork? That's someone else's problem.

In this article, we explain what a payroll intermediary actually involves, how it works under Belgian law, and when it's a smart choice for your business.

What exactly is a payroll intermediary?

With a payroll intermediary, you outsource legal employer status to an external party. In practice, this means:

• You select the employee, plan the shifts and manage them on the shop floor
• The payroll company hires the employee, pays the wages and handles all HR administration

So the employee isn't on your payroll, but on the payroll company's. Even so, they work exclusively for your organisation. You are the operational employer, the payroll company is the legal employer. Curious what this means in concrete terms for the employee? Read our article on rights as a payroll employee.

In our experience with thousands of temporary workers, this arrangement is especially attractive to employers who want flexibility without the administrative burden that comes with it.

This is fundamentally different from how you would normally hire someone. With a direct hire, you as the employer are responsible for every aspect: from the employment contract to the NSSO declarations, from guaranteed salary during illness to the correct notice period on dismissal.

With a payroll intermediary, you transfer that responsibility. The payroll company takes care of:

• Drafting employment contracts
• Dimona declarations to the NSSO
• Wage calculation according to the correct Joint Committee
• Social security contributions and professional withholding tax
• Payslips and annual statements
• Administration in case of illness or accident

How does payrolling work under Belgian law?

This is where it gets legal. Not boring-legal, but important.

In Belgium, lending out staff with a transfer of employer authority is in principle prohibited. Yes, prohibited. This is set out in the Act of 24 July 1987 on temporary work and temporary agency work.

Why the ban? To prevent abuses such as illegal labour subcontracting. The legislator wanted to avoid workers being lent on without any protection.

But there are exceptions. Licensed temp agencies are allowed to make workers available, provided they hold the right authorisation. Payroll companies often operate under the same rules or work together with licensed temp agency partners.

What does this mean in practice? If you work with a payroll intermediary, you need to check whether they hold the right approvals. If you work with a party that doesn't meet the legal conditions, you risk the employment contract being deemed to exist directly with you. With all the obligations that entails, plus possible fines.

At Recruit, we operate fully in line with Belgian law. Our contracts and processes are aligned with the requirements of the Act of 24 July 1987, so you don't have to worry about legal pitfalls.

Payroll vs temp agency: what's the difference?

This is probably the most frequently asked question. Both take over legal employer status, but there are important differences.

Recruitment and selection

With payrolling, you select who you want to hire yourself. You find the candidate, run the interviews and make the call. The payroll company then hires your chosen candidate.

With a temp agency, it's the other way around. The agency searches, selects and proposes candidates. You choose from what they offer.

Exclusivity

A payroll employee works exclusively for you. They may be on the payroll company's books, but they carry out assignments only for your organisation.

A temp worker can work for several clients at once. The temp agency decides where and when someone is deployed.

Working conditions and CLA

Here lies a big difference. A payroll employee falls under the collective labour agreement (CLA) of your sector. Work in hospitality? Then the conditions of JC 302 apply. In construction? Then JC 124.

A temp worker falls under the temp agency CLA (JC 322). Their working conditions are therefore governed differently.

Note: the specific rules can vary considerably from one Joint Committee to another. What applies in JC 200 (white-collar workers) doesn't automatically apply in JC 140 (transport) or JC 118 (food). Always check the conditions for your specific sector. Want to know exactly which CLA applies? Read our article on the CLA for payroll by sector.

Replacement during illness

Does a payroll employee fall ill? Then you have to arrange a replacement yourself. The payroll company handles the administrative side, but not the operational replacement.

With a temp agency, you can usually ask for a replacement to be sent.

Want to dig deeper into the differences with a traditional contract? Then read our comparison of payroll vs traditional contract.

Benefits of a payroll intermediary

More and more Belgian employers choose payrolling for a handful of clear reasons. The main ones:

No administrative hassle

All HR administration is taken off your hands. No Dimona stress, no number-crunching for NSSO contributions, no fuss over payslips. You get one invoice and you're done.

Risks moved elsewhere

In case of illness, occupational accident or dismissal, the financial risks largely sit with the payroll company. Think guaranteed salary, severance pay and reintegration programmes.

Flexibility retained

You can scale up quickly when things get busy and scale back down when they quieten. Without having to manage the complexity of hiring and dismissal yourself.

Focus on your core business

Instead of spending hours on wage administration, you can put that time into what really adds value for your business.

You see this above all at companies that regularly work with temporary workers. For them, the administrative burden per worker is disproportionately high relative to the length of employment.

Drawbacks and points of attention

Sounds great, but what are the pitfalls? Because there are some.

Slightly higher costs

On average, payrolling is 2 to 4 percent more expensive than running payroll yourself. You pay for the service, the risk coverage and the administration. Is it worth it? Depends on your situation.

Less direct bond

Legally, the employee isn't your worker. Some employers experience that as a barrier to team building or long-term relationships. In practice it often makes little difference (the employee is on your shop floor every day), but it's something to bear in mind.

Dependence on an external party

You depend on the quality of the payroll company. Are they slow with declarations? Then you feel the effects. That's why choosing a reliable partner is crucial.

No replacement during illness

Unlike a temp agency, a payroll company doesn't arrange a replacement if your employee falls ill. That operational challenge stays with you.

What does payrolling cost?

Now it gets interesting. Because "it costs money" is no answer.

Payroll companies work with a conversion factor (also called the payroll factor). That factor usually sits between 1.65 and 1.82.

Worked example:

Say an employee earns €15 gross per hour. With a payroll factor of 1.70, the total cost to you as the client is:

€15 × 1.70 = €25.50 per hour

That factor includes:

• The employee's gross salary
• Employer contributions (around 25% in the profit sector)
• Holiday pay and end-of-year bonus (pro rata)
• Insurance and administration costs
• The payroll company's margin

For comparison: if you run payroll yourself, you end up at an indicative total wage cost of €20 to €22 per hour (depending on your sector and any reductions, 2026 figures). So payrolling does indeed cost a little more, but then you no longer have to worry about a thing.

Want to know how the costs compare to a temp agency? Take a look at our article on the costs of a temp agency. Or read our detailed comparison of payroll and temp agency.

Who is a payroll intermediary right for?

Payrolling isn't the best choice for every business. It works especially well in these situations:

Peak periods and seasonal work

Hospitality in summer, retail over the holidays, farming during the harvest. If you regularly have to scale up and down, payrolling saves you a lot of administrative work.

Project-based deployment

You need someone for a specific project of three or six months. When it ends, the contract stops automatically via the payroll company.

Small employers without an HR department

As an entrepreneur, you don't have time to get to grips with all the finer points of Belgian labour law. After more than 15 years in Belgian payroll, we know this is one of the main reasons entrepreneurs choose payrolling: the certainty that everything runs correctly, without losing sleep over it.

Testing before you hire permanently

You want to "try out" someone for a while before offering a permanent contract. Payroll lets you do that, without having to draft and follow up on a fixed-term contract yourself.

In short

A payroll intermediary comes down to one thing: you keep control over who works for you and what they do, while someone else handles the paperwork. A little more expensive than running payroll yourself? Yes. But the time saved and the peace of mind often outweigh that.

Is it right for you? That depends on how often you work with temporary staff and how much value you place on "no longer thinking about Dimona deadlines".

---

How Recruit helps you

Hiring temporary staff without administrative headaches? That's exactly what we built Recruit for.

With Recruit:

• Contracts in under 60 seconds - Create trial and temp contracts without the hassle
• Automatic wage calculation - Correct pay according to current legislation and your Joint Committee
• Dimona and social documents - We handle all declarations, you focus on your business
• 24/7 personal support - Always a dedicated contact who knows your business
• No fixed monthly costs - Pay only for what you use

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

---

Frequently asked questions

Which CLA covers a payroll employee?

A payroll employee falls under the CLA of your sector as the client, not under the temp agency CLA. If you work in hospitality (JC 302), those conditions apply. This is an important difference from classic temporary agency work.

Who pays wages when a payroll employee is sick?

The payroll company is the legal employer and therefore pays the guaranteed salary during illness. The cost is factored into the payroll factor you pay. As the client, you have no administrative work to do.

Can I later hire a payroll employee permanently?

Yes, you can. Most payroll contracts provide for a transition procedure. After a set period, you can offer the employee a direct contract. Ask your payroll partner about the conditions in advance.

Is payrolling the same as temp work?

No. With payrolling, you select the employee yourself and they work exclusively for you. With temp work, the agency does the recruitment and the worker can work for several clients. The CLA differs too: payroll follows your sector, temp work follows the temp agency CLA.

---

The information in this article is purely informative and does not replace professional legal or accounting advice. Labour legislation changes regularly. Always consult the current legislation or contact an HR expert for advice tailored to your situation.