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 changes 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 add up to more than €12,000 per quarter for your first employees combined.
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 is an overview of the current scheme (valid until 31 March 2026).
First employee
For your very first employee you enjoy a target-group reduction of up to €3,100 per quarter. 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 is a saving of up to €12,400. That is no small change for a new employer.
Second employee
For your second employee you get a tapering discount 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 your third employee 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: from 1 July 2026 discounts return 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 changes in 2026?
The federal government has reformed the target-group reduction. The changes come into force in phases. These are the main adjustments:
From 1 April 2026:
The discount for your first employee drops from €3,100 to a maximum of €2,000 per quarter. The discount does remain unlimited in time, which is positive. For the second and third employee the amounts are likewise adjusted to a maximum of €1,000 per quarter, for a period of 12 quarters.
Let's not beat around the bush: this is a serious cut. Where you now save €12,400 a year for your first employee, that becomes €8,000 a year. That is €4,400 less.
From 1 July 2026:
Discounts return 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 May 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
With the reduction in amounts from April 2026, it can be strategically smart to review your hiring plans. An employee who enters service in March 2026 still enjoys the higher reduction of €3,100 per quarter.
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: timing is everything
The 2026 reform makes timing more important than ever. A few concrete scenarios.
Scenario 1: you plan your first hire in the spring of 2026
Take on your first employee before 1 April 2026. You then still enjoy the higher reduction of €3,100 per quarter for an indefinite period. Wait until after 1 April? Then it becomes €2,000. The difference on an annual basis: €4,400.
Scenario 2: you want to grow from three to five employees
Wait with your fourth and fifth employee until after 1 July 2026. You are then entitled to the new discount of €1,000 per quarter for 12 quarters. If you take those employees on before that date, you get no discount at all for them.
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 currently save up to €3,100 per quarter, unlimited in time
- From April 2026 that drops to €2,000 per quarter
- For your second and third employee, tapering amounts apply over 13 quarters
- From July 2026 discounts return 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 is changing, 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.
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
- 24/7 personal support: always a dedicated contact person 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.
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.