Belgium approves temporary exemption to automatic indexation of remuneration

At a glance

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Most employees in Belgium are covered by a collective bargaining agreement stipulating automatic salary indexation.

The indexation systems vary depending on the sector. Some joint committees index pay every year on a specific date, for instance on 1 January for the national auxiliary joint committee for white-collar employees (n° 200). Other joint committees increase salaries by 2% each time the consumer price index increases by 2%, for instance the joint committees for the chemical industry (n° 111 and n° 207). And some joint committees only index salaries up to a certain cap, for instance the joint committee for insurance companies (n° 306).

At political level, the debate on automatic indexation has been going on for years, notably when the high inflation during 2021 and 2022 resulted in an indexation by more than 10%.

The current coalition government announced it would reform automatic indexation. On 11 March 2026, the commission for social affairs in Parliament approved the articles of a draft Programme Act on temporary exceptions to the automatic indexation.

Key principles

The basic idea is that nothing changes for employees with a monthly fixed remuneration up to EUR4,000. For part-time employees, this threshold applies to the hypothetical full-time remuneration.

If an employee earns more than EUR4,000 gross per month, as of 1 June 2026:

• The first EUR4,000 is in principle only indexed by a maximum of 2%.
• The portion of salary above EUR4,000 will no longer be indexed as of 1 June 2026.
• This will continue until the salary reaches the amount of full remuneration on 1 June 2026. At that point, the current collective bargaining agreements on automatic indexation will apply.

This moment will vary from person to person, as it depends on when the amount of the indexations applied on the remuneration below the threshold will reach the first hypothetical indexation on the part of the remuneration above the threshold.

Rule when normal indexation exceeds 2%

If the normal indexation exceeds 2%, the full remuneration will be indexed by a percentage equal to the difference between the normal indexation and 2%. This comes on top of the indexation by a maximum 2% applied to the first EUR4,000 gross.

For example, if an employee earns EUR10,000 gross per month and the indexation is 2.2%, the indexation equals the sum of EUR20 (0.2% of EUR10,000) and EUR80 (2% of EUR4,000). The difference between the uncapped remuneration would be EUR120 gross per month.

This cap for the indexation will apply as of 1 June 2026. The same rule will apply as of 1 January 2028, but with the remuneration cap at the indexed amount of EUR4,000.

Financial effects and new social security contribution

Not applying the automatic indexation in full has a negative impact for the employee, but also for the Belgian state. Limiting indexation also reduces the calculation basis of the tax withholdings and social security contributions.

The draft act introduces a new social security contribution to counter this effect. This new employer contribution equals 50% of the cost saving for the employer resulting from the fact the remuneration is only partially indexed. In the example above, the employer would pay a social security contribution of EUR60 per month.

This new social security contribution applies both to the cost savings resulting from the 2026 partial indexation and those resulting from the 2028 partial indexation.

The rules concerning the payment modalities for this new contribution are the same as the ones for the normal social security contributions.

While the draft act stipulates a temporary partial automatic indexation in 2026 and 2028, the new social security contribution applies for an undefined duration.

The full assembly of Parliament still has to vote on the draft act. As it concerns a government proposal, we assume Parliament will promulgate it in the coming weeks through a vote split between the government and the opposition parties.