Tax changes mean Belgian workers will see net salaries rise Tax changes mean Belgian workers will see net salaries rise

Tax changes mean Belgian workers will see net salaries rise
26 Jan 2018

Belgian workers will see their net salaries rise from January by an estimated 1.5% to 3% thanks to an ongoing tax shift.

The federal government is in the process of implementing a series of measures to stimulate job creation and reduce wage costs. Some reforms came into effect in early 2017, while the rest will take place in January 2018.

The details

  • From 1 January 2018, the non-indexed, flat rate for business expenses will be 30%, up to a maximum of €2,950 (US$3,498);
  • The 30% tax rate will disappear and the 40% tax band will widen;
  • The income ceiling will be raised to benefit from a higher tax-exempted quota, making more people eligible to benefit from it;
  • In real terms, an employee with no dependents and a gross salary of €2,000 (US$2,371) will earn an extra €45.27 (US$53.67) net per month, bringing their net salary to €1,567.78 (US$1,858.82);
  • For a gross salary of €3,000 (US$3,557), the increase will be €46.20 (US$54.78) per month, providing a net salary of €1,919.67 (US$2,276);
  • For a gross salary of €4,500 (US$5,335), the increase will be €46.85 (US$55.55) per month, giving a net salary of €2,567.97 (US$3,045).

According to The Brussels Times, the increase will be greater for some categories of workers than others due to the indexing and increase in buying power on which the social partners have agreed. This situation varies from sector to sector depending on the decisions of the individual commissions paritaire, which are government bodies that regulate economic activity across the country.

The last phase of the tax shift will occur in 2019, with an increase in the fiscal employment bonus, which will see workers with low salaries paying less in personal social contributions.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Belgian workers will see their net salaries rise from January by an estimated 1.5% to 3% thanks to an ongoing tax shift.

The federal government is in the process of implementing a series of measures to stimulate job creation and reduce wage costs. Some reforms came into effect in early 2017, while the rest will take place in January 2018.

The details

  • From 1 January 2018, the non-indexed, flat rate for business expenses will be 30%, up to a maximum of €2,950 (US$3,498);
  • The 30% tax rate will disappear and the 40% tax band will widen;
  • The income ceiling will be raised to benefit from a higher tax-exempted quota, making more people eligible to benefit from it;
  • In real terms, an employee with no dependents and a gross salary of €2,000 (US$2,371) will earn an extra €45.27 (US$53.67) net per month, bringing their net salary to €1,567.78 (US$1,858.82);
  • For a gross salary of €3,000 (US$3,557), the increase will be €46.20 (US$54.78) per month, providing a net salary of €1,919.67 (US$2,276);
  • For a gross salary of €4,500 (US$5,335), the increase will be €46.85 (US$55.55) per month, giving a net salary of €2,567.97 (US$3,045).

According to The Brussels Times, the increase will be greater for some categories of workers than others due to the indexing and increase in buying power on which the social partners have agreed. This situation varies from sector to sector depending on the decisions of the individual commissions paritaire, which are government bodies that regulate economic activity across the country.

The last phase of the tax shift will occur in 2019, with an increase in the fiscal employment bonus, which will see workers with low salaries paying less in personal social contributions.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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