Belgian workers will see their net salaries go up from January 2018 as a result of the ongoing tax shift. The SD Worx human resources firm puts the increase at 1.5 to 3%. The federal government had begun implementing a series of measures to stimulate job creation and reduce wage costs. A first part of this reform entered into effect in early 2017 and the second part will kick in January 2018.
“From the 1st of January 2018, the non-indexed, flat rate for business expenses will invariably amount to 30%, up to a maximum of 2,950 euros,” SD Worx reported. “Moreover, the 30% tax rate will disappear and the 40% tax band will widen. Finally, the income ceiling will also be raised so as to benefit from the higher tax-exempted quota. In so doing, more people will be eligible.”
In real terms, an employee with no dependents and a gross salary of 2,000 euros will earn an extra 45.27 euros net per month, bring his/her net salary to 1,567.78 euros. For a gross salary of 3,000 euros, the increase will be 46.20 euros per month, giving a net salary of 1919.67 euros, while a worker grossing 4,500 euros monthly will take home 2,567.97 euros, an increase of 46.85 euros.
The increase will be greater for some categories of workers thanks to the indexing and increase in buying power that the social partners have agreed on. The situation varies from sector to sector depending on the paritary committees.
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.