ARTICLE · 02 DECEMBER 2019

The Innovation Premium: A Clever Idea ?

DLA Piper UK LLP

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The innovation premium is a cash bonus allowing an employer to grant a financial compensation to an employee who proposes innovation with a real added value for the company.

BelgiumEmployment and HR

Jascha Kolesnyk

1. What is an innovation premium?

The innovation premium is a cash bonus allowing an employer to grant a financial compensation to an employee who proposes innovation with a real added value for the company. This financial compensation is exempt from social security contributions and is not taxable if all legal conditions are met. The paid premiums are moreover considered to be a deductible cost for the employer.

2. Which conditions should be complied with?

To be eligible for the innovation premium the idea must fulfill the following conditions:

the novelty must represent a real added value in relation to the normal activities of the employer who grants the premium;
the innovation must not be subject to a prior call for tenders or a request for specifications for the purchase of products or processes addressed by a third party to the party granting the premium; and

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