Tax · 80% rule · 2026
The 80% rule: the tax ceiling on a company director's supplementary pension
How this rule caps the deductibility of your IPC and PLCI/VAPZ through your company, how to calculate it step by step, and how to make the most of the room below the ceiling.
Updated on
By the Finances Indépendants editorial team
What is the 80% rule?
The 80% rule is laid down in Article 59 §1 of the Income Tax Code (CIR). It sets a condition for deductibility: for a supplementary pension premium (IPC, PLCI/VAPZ, group insurance) to be deductible for corporate income tax, the sum of the projected statutory pension and the extra-statutory pension at retirement must not exceed 80% of the director's last normal gross annual remuneration.
In practice, if you are the director of an SRL/BV (private limited company) with regular annual remuneration of €80,000, your combined pension (statutory + IPC + director's PLCI/VAPZ) may not exceed €64,000 a year at retirement age; otherwise the portion of the premium above the ceiling is neither deductible nor tax-neutral.
Why this rule exists
Belgian lawmakers wanted to regulate the deductibility of pension premiums to stop a company from deducting excessive premiums for its director's benefit, designed as a way of moving large amounts of profit out at little tax cost.
The 80% threshold reflects the idea that a "normal" retirement income is 70-80% of working income, a level considered enough to maintain your standard of living without creating artificial, tax-driven over-funding.
On gross remuneration of €60,000, the tax ceiling is €48,000.
- Already taken up by the statutory pension
- €18,000
- Still deductible as a supplementary pension
- €30,000
The formula in detail
The official calculation is done by your accountant, actuary or broker, but the simplified formula is as follows:
Annual ceiling = (0.80 × Normal gross annual remuneration) − Statutory pension
where:
• Remuneration = regular gross monthly pay × 12
• Statutory pension = NISSE (INASTI/RSVZ) estimate at 67
The annual IPC + director's PLCI/VAPZ premium must not exceed this annual ceiling, capitalised up to retirement.
Example: a director earning €80,000
Take a 45-year-old SRL/BV director with regular gross annual remuneration of €80,000 and a projected statutory pension at 67 of ~€25,000 a year.
80% × 80,000 = €64,000 a year (total pension ceiling)
− Projected statutory pension: €25,000
= Maximum extra-statutory pension: €39,000 a year
Actuarial capitalisation over 22 years (45 → 67) at a 2% return:
→ Target capital: ~€700,000 → deductible annual IPC + PLCI/VAPZ premium ~€22,000 a year
Note: this calculation is a quick estimate. The official projection for the corporate income tax deduction uses the actuarial coefficients in force (technical interest rate, mortality tables). See the IPC guide.
Consequences of going over
If your IPC + PLCI/VAPZ premiums exceed the 80% ceiling, two penalties apply on top of each other:
- Not deductible for the company: the excess portion is not deductible for corporate income tax, so it is added back to taxable profit and taxed at 20% or 25%.
- Benefit in kind for the director: the "abnormal" premium is reclassified as a benefit in kind (BIK), and therefore taxed under personal income tax at the director's marginal rate.
Combined, these two penalties can amount to 60-70% of the "excess" premium in actual tax cost. The way to optimise is to adjust premiums each year in line with the director's actual remuneration.
Making the most of your allowance under the 80% rule
Three levers let you increase your deductible allowance without breaching the rule:
- Raise the director's regular remuneration: every extra €1,000 of regular annual remuneration adds €800 of deductible pension allowance. Weigh this against the trade-off between marginal personal income tax and corporate income tax.
- Combine an IPC with a director's PLCI/VAPZ: the director's PLCI/VAPZ (through a company) counts alongside the IPC in the 80% calculation, but offers different tax treatment on exit (10% vs 16.5% tax depending on age).
- Backservice (buying back past years): you can make up for years without pension contributions (e.g. when you were starting out), within the limit of the cumulative 80% ceiling.
Sources
- Income Tax Code 1992, Article 59 §1 CIR, 80% rule. View (new tab)(Official source, 2025)
- FPS Finance, Circular 2024/C/74, calculating the 80% rule. View (new tab)(Official source, 2024)
- FSMA, Prudential framework for second-pillar pension products. View (new tab)(Official source, 2025)
80% rule, key figures
Cap it to deduct it
- 80%
Total pension ceiling / last remuneration
CIR Art. 59 §1 · 2025
- ≈ 60%
Combined tax cost of going over
Indicative estimate · 2026
- 67
Statutory reference age for the pension projection
NISSE (INASTI) · 2026
80% rule FAQ
Frequently asked questions about the 80% rule
It is the rule that caps the tax deductibility of supplementary pension premiums (IPC, PLCI/VAPZ, group insurance) paid for a company director. Total pension (statutory + extra-statutory) may not exceed 80% of the last normal gross annual remuneration, projected to retirement age. Source: Article 59 §1 CIR.
All extra-statutory second-pillar premiums: IPC (individual pension commitment), director's PLCI/VAPZ, collective group insurance, NIHDI (INAMI/RIZIV) premiums. The rule applies to the combined total, not to each product separately.
It is the director's regular gross monthly remuneration × 12 (excluding exceptional bonuses, one-off bonuses and exceptional benefits in kind). Remuneration paid in a single lump sum at the end of the financial year is not "normal" within the meaning of the rule. The test: regular, monthly, gross taxable remuneration.
The part of the premium above the ceiling is not deductible for corporate income tax and is reclassified as a benefit in kind for the director (and therefore taxed under personal income tax). A double tax penalty. The best strategy: have your broker or accountant confirm the annual allowance before each payment.
An individual PLCI/VAPZ (as a natural person) is not subject to the 80% rule; its ceiling is set separately (8.17% or 9.4% of net taxable income, NISSE ceilings). However, as soon as you combine a PLCI/VAPZ with an IPC through a company, the 80% rule applies to the combined total.
The overall ceiling (80%) is fixed, but the calculation takes account of the number of years left until retirement (66 or 67 depending on your year of birth). The younger the director, the lower the annual allowance needed to reach 80%, because it is spread over more years.
Free calculation
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