At a glance
- Belgium's Programme Act (Act), which entered into force on 1 June 2026, introduces significant changes to the country's automatic wage indexation system for employees covered by the Belgian social security regime.
- The new rules apply to employees whose reference remuneration exceeds EUR4,000 gross per month and temporarily limit indexation on remuneration above that threshold.
- During designated moderation periods, the first EUR4,000 of monthly remuneration remains eligible for indexation, but generally subject to a maximum increase of 2%, while indexation on remuneration above EUR4,000 is suspended temporarily.
- The Act also introduces new employer social security contributions designed to offset the reduction in tax and social security income resulting from restricted indexation.
- Employers must comply with the statutory indexation restrictions, and future Royal Decrees are expected to clarify the methodology for calculating the new contributions.
Belgium is one of the few countries where nearly all workers are covered by a system of automatic indexation of remuneration, however, there is no generally applicable legislation. Therefore, most joint committees have a collective bargaining agreement on indexation, using a variety of systems.
Certain joint committees apply automatic wage indexation annually on a specified date. For example, salaries under the national auxiliary joint committee for white-collar employees (No. 200) are indexed on 1 January each year. Other joint committees provide for salary increases whenever the consumer price index rises by 2%; this is the case in the chemical industry joint committees (Nos. 111 and 207).
Indexation has an impact on the Belgian state budget for three reasons:
- Higher remuneration because of indexation means a higher calculation basis for the taxes and social security contributions employers pay.
- Remuneration of staff employed by the Belgian state is also subject to an automatic indexation.
- Most social security benefits paid by the Belgian state, notably retirement pensions, are also subject to automatic indexation.
Although the coalition agreement provided that the government would review the automatic indexation system by the end of 2026 at the latest, Parliament approved an Act on 28 May 2026 that has already introduced significant changes to the indexation mechanism. The Act was published in the Official Journal on 1 June 2026 and entered into force on the same date.
From an administrative perspective, indexation has historically been relatively straightforward to apply. However, the new Act fundamentally alters this position and introduces a considerably more complex framework.
The scope of the Act
The Act has a broad scope and applies to all employees in both the public and private sectors who are covered by the Belgian social security system.
However, the new rules do not apply to employees whose reference remuneration does not exceed EUR4,000 gross per month. Reference remuneration is defined as the 'indexed fixed monthly basic remuneration' under the applicable salary scale, or the contractual salary where this is higher.
During the parliamentary debates, the Minister confirmed that this refers to the “structural and unconditional minimum” element of the remuneration package. The parliamentary works further clarify that holiday pay and the 13th-month payment are excluded when assessing whether the threshold is met. Premiums for weekend work are also excluded, as is variable remuneration linked to uncertain factors, such as commission payments for sales representatives.
Benefits in kind, such as a company car, are likewise excluded, as they are not subject to indexation.
For part-time employees, the EUR4,000 threshold is assessed on a full-time equivalent basis. As a result, an employee working half-time and earning EUR3,000 gross per month is deemed to earn EUR6,000 on a full-time equivalent basis and therefore falls within the scope of the new rules.
Key principles
If an employee earns more than EUR4,000 gross per month, as of 1 June 2026:
- The first EUR4,000 is in principle still indexed according to the existing rules, but subject to a maximum of 2% indexation.
- The portion of salary above EUR4,000 is temporarily no longer indexed as of 1 June 2026.
- This temporary suspension of the indexation ends when the amount of the employee’s remuneration reaches the initial amount of the remuneration, indexed by 2% by adding the indexations allowed under the Act. At that moment, the normal indexation mechanism resumes in full.
The timing of the third step will depend on the indexation mechanism concerned and future inflation developments. Consequently, the date on which it will take effect remains uncertain.
The Act contains a comparable provision enabling the temporary suspension of indexation for most social security benefits.
The rule when normal indexation exceeds 2%
Where the standard indexation would exceed 2%, the employee’s full salary is indexed by the amount above that 2% threshold. This is applied in addition to the indexation of up to 2% on the first EUR4,000 gross of monthly remuneration.
For example, where an employee earns EUR10,000 gross per month and the applicable indexation rate is 2.2%, the increase under the Act consists of EUR80 (2% of EUR4,000) plus EUR20 (0.2% of EUR10,000). By contrast, applying the full 2.2% indexation rate to the employee’s entire salary would result in an increase of EUR220. The Programme Act therefore reduces the monthly increase by EUR120.
Two moderation periods
The Act stipulates a first moderation period starting on 1 June 2026 and ending when the 2% cap is reached. As inflation in Belgium currently stands at around 3.4% per year, this first moderation period will generally last less than one year.
The Act also stipulates a second moderation period starting on 1 January 2028.
The same mechanism for a temporary suspension of the indexation will apply during this second moderation period. The remuneration cap of EUR4,000 gross per month would nevertheless be indexed for this second moderation period.
New social security contributions
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 temporary and a new definitive social security contribution to counter this effect. The new temporary employer contribution equals 50% of the cost saving for the employer resulting from the fact that the remuneration is only partially indexed.
The Act further provides that, for employees who commence employment on or after 1 June 2026, the new rules must be applied on the assumption that the employee has received all indexation increases that would have applied at the employer during the relevant moderation period.
For example, where an employee joins an employer covered by the national auxiliary joint committee (No. 200), which applies annual indexation on 1 January, in March 2027, the employer will still be liable for the new social security contribution relating to the portion of the 1 January 2027 indexation that was not applied. This is the case even if the parties negotiated the employee’s salary in February 2027.
The detailed calculation rules for this temporary contribution will be set out in a future Royal Decree.
The temporary contribution applies to the employer savings resulting from the moderation periods in both 2026 and 2028.
The effects of the partial suspension of indexation during those moderation periods may continue for as long as an employee remains employed. As each subsequent indexation increase is calculated on the basis of the salary resulting from previous indexations, the omission of part of an indexation increase has a lasting impact. Consequently, remuneration will remain lower than it would have been had no partial suspension occurred.
Following the second moderation period, employers will be required to pay a consolidated special salary moderation contribution. The Act does not specify an end date for this contribution.
It does, however, provide that the consolidated contribution will only be payable in respect of the portion of remuneration exceeding the threshold of EUR4,000 gross per month, as adjusted from time to time.
The detailed calculation methodology for both the temporary and consolidated contributions will be determined by a future Royal Decree.
Sanctions for infringement
The Act stipulates that all covered employers should respect the restrictions on the indexation stipulated in the Act and that any agreement to the contrary is void.
But it doesn’t stipulate any sanction if an employer disregards the restrictions on the indexation and grants a full indexation.
This employer will then have to pay both the full indexed remuneration and the new social security contributions introduced by the Act. It could also be that by granting a full indexation, the employer infringes the Salary Moderation Act of 26 July 1996, which can lead to administrative fines.
The rules concerning the payment modalities for this new contribution are the same as the ones for normal social security contributions. The non-payment of the new contributions can lead to the usual sanctions for non-payment of social security contributions.
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