If you have been offered an employment contract in Belgium, or plan to move and look for an employment opportunity here, you will obviously be wondering how much of your gross salary you will be able to take home at the end of the month. Belgium is not really famous for being a tax-friendly country for those earning a salary or receiving professional income in general.
Your monthly take-home pay is what remains of your gross salary after payroll taxes, benefits, and social security contributions are deducted. First, it should be mentioned there is an important difference between your monthly take-home pay and your total annual net income, as several deductions and allowances can only be claimed through your annual tax filing.
An employee’s gross salary is subject to two main deductions, namely a 13.07% social security contribution and a payroll tax, whose withholding rate depends on the gross salary level and your family situation. Social contributions cover unemployment benefits, invalidity, child allowances, state pension, etc. The employer is also required to make a 25% social security contribution, but this is paid on top of the gross salary and does not concern the employee.
The payroll tax withheld at source is a prepayment of income tax due for a given tax year, which will be considered afterwards when you submit your annual tax filing. Any amount overpaid will be refunded to you or it is also possible you need to make an additional tax payment.
Every taxpayer is entitled to a personal allowance on which you are not required to pay any taxes. For income year 2023 (tax year 2024), this amounts to €10,160 per taxpayer, but can be increased if you have dependent children, etc. If you work as an employee, you will also be entitled to a lump-sum business expense deduction that amounts to 30% of your taxable salary, with a maximum of €5,520 per taxpayer (tax year 2024).
Any amount left after that is then subject to the standard income tax rates. Here are the tax bands for income year 2023 (tax year 2024):
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Evidently, other allowances, deductions and sources of income will also need to be considered in order to determine your total annual Belgian tax liability.
TAXPATRIA® can provide you with a gross/net or net/gross tax simulation and further advise you on your future Belgian employment and tax situation.