All articles · 2026-06-05 · Taxation
Why a €1,000 bonus only gives you €400 net (and what the alternative is)
A classic cash bonus is often one of the most expensive ways for a company director to bring money into their private finances. Discover how warrants and stock options serve exactly the same purpose but are treated fundamentally differently for tax purposes.
By Jan Hermans, CEO & founder of Lyff.
You've had a strong year. The company is doing well, you want to reward yourself, and the first thought is: a bonus. Logical, because everyone knows the principle from employment. But as a director of a management company, a classic cash bonus is often also one of the most expensive ways to bring money into private finances. A gross bonus of €1,000 sometimes only yields around €400 net in practice, once you account for all social contributions and personal income tax (personenbelasting).
The good news: there is an instrument that fulfills exactly the same function as a bonus – rewarding performance – but is treated fundamentally differently for tax purposes. This instrument is called a warrant (or stock option). In this blog, we explain how it works, why the tax burden in percentage can remain the same while the amount you effectively pay seriously decreases, and what you, as a company director, need to pay attention to.
The problem with the classic bonus
With a classic cash bonus, the tax logic is simple, and simple here is not in your favor. You decide on an amount, you pay it out, and for the company, it's neatly deductible as an expense. For you personally, however, you pay both personal income tax and social contributions on the full amount. The gross amount looks attractive, but the net result is often disappointing.
That doesn't mean a bonus is always a bad idea. After an exceptionally profitable year, when landing a strategic client, or as a reward for a one-off performance, a bonus can be perfectly appropriate. But if you can achieve the same goal, rewarding someone for performance, in a more tax-efficient way, it's worth knowing how.
Warrants and stock options: same goal, different tax path
A warrant or stock option is a right to purchase a share later under pre-agreed conditions, for example, a fixed price within a certain term. This instrument is set up via an accredited platform or issuer and then granted to you by the management company as remuneration for services rendered.
The crucial difference from a bonus lies in the taxable moment and the taxable base. With a classic bonus, you are taxed on the full amount you receive. With warrants and stock options, you are usually not taxed on the amount you later derive from them, but on a notional benefit (forfaitair voordeel) that is determined in advance, typically sixty days after the written offer, provided you accept that offer in writing and on time.
How is this notional value calculated?
For unlisted warrants or stock options, the tax authorities cannot objectify the economic value using a public market price. Therefore, the taxable base is determined notionally (forfaitair), according to a formula widely used in practice: 18% of the underlying value, increased by 1% per year beyond a five-year term. Specifically:
- Term 5 years: 18%
- Term 10 years: 23%
- Term 15 years: 28%
Thus, not the full economic value is taxed, but the notionally calculated benefit at the time of allocation. Personal income tax and social contributions are calculated on this notional base, not on the gross amount leaving the company, nor necessarily on what you ultimately retain privately.
A concrete example
Suppose €50,000 is granted via an unlisted option plan, with a term where the notional value (forfait) amounts to approximately €15,904. Depending on the structure, a private amount of around €46,000 may become available later, while tax and social contributions are calculated only on that €15,904, not on the €46,000. Net, about €35,000 remains in this example.
Compare that to a classic bonus: there you are taxed on the full amount paid out, and a significant portion disappears along the way through social contributions and personal income tax. This explains why warrants often perform significantly better than a classic cash bonus in simulations, although the exact result depends on the specific conditions and how the plan is set up.
The image of scratch cards from the newsagent makes the difference tangible: you can buy twenty scratch cards for €100. The tax authorities know the purchase value, but don't know if you will win €5 or €500,000 after scratching. This uncertainty about the final value, as long as it falls within a correct legal and tax framework, is precisely what makes the optimization effect possible.
Listed versus unlisted
This notional approach does not apply when working with listed warrants. For listed warrants, the value is transparent and objectively readable on the stock exchange, allowing the tax authorities to align much more closely with the actual value. Listed warrants can still feel somewhat more efficient than a pure cash bonus, but the large notional leverage effect seen in unlisted structures is much smaller or even absent there.
What to watch out for
Warrants and stock options are not an instrument you just set up easily. During tax audits, specific questions are asked: is the cost in the company deductible as a business expense, does it serve a real corporate interest, and does the allocation fit within a defensible remuneration policy? A number of practical basic principles are essential here:
- A written and dated offer, with written acceptance within the foreseen term.
- Assurance that it concerns a genuine stock option, recognized by the FSMA. A paper trade without a ruling (ruling) carries a real risk of rejection.
- Correct calculation and processing of the benefit in kind (voordeel van alle aard), with special attention to the sixty-day moment.
- Correct accounting treatment as a remuneration element, plus a correct tax slip (fiche) and reporting in accordance with article 57 WIB (Wetboek van de Inkomstenbelastingen).
- Contextualization in minutes (notulen) or an internal memo: why is this instrument used, is the allocation proportional, and how does it relate to the performance delivered?
And an important nuance: warrants are intended as an additional lever within a remuneration policy, not as a replacement for your full salary. Reducing a traditional salary to zero in favor of warrants is not a defensible strategy, nor is it a strategy we advise.
What changes towards 2027?
Even after 2026, stock options and warrants will remain an important instrument for transferring value from the company to private finances with favorable tax treatment. What will change is primarily the context in which they are assessed: attention will shift more emphatically towards regularity, proportionality, and coherence with the broader remuneration policy. From 2026, there will also be a federal limitation that caps the share of notionally valued benefits (forfaitair gewaardeerde voordelen) in the director's remuneration package at a maximum of 20%. In well-structured cases, warrants are part of a structural remuneration narrative: they align with performance and responsibilities, are determined in advance, correctly documented, and consistently applied.
Conclusion
A bonus and a warrant can serve exactly the same purpose: rewarding good performance. The difference lies in what remains of that amount in your pocket. Where a classic bonus taxes you fully on the amount paid out, a warrant allows you to be taxed on a much lower notional value, while you can later derive a significantly higher amount from it. No trick, no grey area, but an instrument that has been legally established since 1999 and that, if correctly applied and documented, can become a structural part of a well-considered remuneration policy.
Are you unsure if warrants are suitable for your situation, or do you want to know how this precisely fits into your current remuneration package? Feel free to contact Lyff. for a tailored discussion.
Frequently Asked Questions
How much tax do you pay on a €1,000 bonus?
With a classic bonus, you are taxed on the full amount paid out. Both personal income tax and social contributions are calculated on that €1,000, often leaving only around €400 net.
What is the tax advantage of a warrant compared to a bonus?
With a warrant or stock option, you are not taxed on the full amount you later derive from it, but on a notional value (forfaitaire waarde) that is determined in advance. For unlisted warrants, this notional value is often much lower than the actual economic value, resulting in a smaller taxable base.
How is the notional value of a warrant calculated?
The most commonly used formula is 18% of the underlying value for a 5-year term, with an additional 1% per year beyond the five-year term. For a 10-year term, this amounts to 23%, and for 15 years, 28%.
Does the notional valuation also apply to listed warrants?
No. For listed warrants, the value is transparent and objectively readable on the stock exchange, allowing the tax authorities to align much more closely with the actual value. The notional leverage effect thus specifically applies to unlisted warrants.
Can I replace my entire salary with warrants?
No. Warrants are intended as an additional lever within a structural remuneration policy, not as a replacement for your full salary. Reducing your salary to zero in favor of warrants is not a defensible strategy.
What changes from 2026 for warrants and stock options?
Warrants and stock options remain a valid instrument, but from 2026, there will be a federal limitation that caps the share of notionally valued benefits (forfaitair gewaardeerde voordelen) in the remuneration package at a maximum of 20%. Attention will further shift towards regularity and proportionality within the broader remuneration policy.