Belgium caps wage indexation as of 1 June 2026

Belgium has introduced a temporary capped indexation measure as from 1 June 2026. The measure limits part of the automatic wage indexation for employees with a gross monthly salary above EUR 4,000. The new rules do not abolish wage indexation or make any permanent change to the indexation mechanism.

Employees with a gross monthly salary up to EUR 4,000 continue to benefit from the normal indexation rules. For employees earning more than EUR 4,000 gross per month, the first 2% of indexation is capped: it is only calculated on the salary up to EUR 4,000. In practice, this means that a 2% indexation gives a maximum increase of EUR 80 for that part of the indexation.

Once the (cumulative, in case it takes multiple indexations to reach 2%) indexation percentage during the capped indexation period exceeds 2%, the full salary is indexed with the part of the index percentage in excess of 2%.

For example, an employee working in Joint Committee 200 has a salary of 4.500 EUR. The indexation in JC 200 takes place in January of every year. If the January 2027 indexation amounts to 2,5%, this employee’s salary will be calculated as follows, according to the legislation:

• Salary until 4.000 EUR is indexed first at 2%. This amounts to 80 EUR (4.000 EUR X 2%);
• The full salary (4.500 EUR) is indexed at 0,5% (2,5% - 2%). This amounts to 22,5 EUR;
• The total indexation amounts to 102,5 EUR, leading to a new salary of 4.602,5 EUR.
• Had the full salary been indexed at 2,5%, the index would have amounted to 112,5 EUR, and the new salary would have been 4.612,5 EUR.

The measure will apply in two phases: first from 1 June 2026, and again, in principle, from 1 January 2028 (at which point the EUR 4,000 threshold will be index-linked). The second phase may be postponed if the first phase has not yet fully produced the intended 2% moderation effect across the relevant indexation mechanisms.
 

Practical impact and payroll complexity

The timing of the impact will differ per sector or company, because Belgian wage indexation does not happen everywhere at the same time. Some employers may see the impact from June 2026, while others may only be affected at a later indexation moment.

The follow-up can be particularly complex for sectors where wages are indexed more than once per year. In those cases, employers may need to track several indexation moments until the 2% cap has been fully reached. This requires careful payroll monitoring, especially where different employee groups are subject to different indexation mechanisms.

Furthermore, the EUR 4,000 threshold is assessed on the fixed monthly base salary on a full-time basis. As such, for part-time employees, the salary must be assessed proportionally, and for employees paid on a daily or hourly basis the employer will need to calculate a monthly reference salary to apply the indexation cap.
 

Linked employer social security contribution

The capped indexation measure is accompanied by a special employer social security contribution. Broadly speaking, employers must pay an additional contribution to the NSSO corresponding to half of the saving resulting from the capped indexation.

This means that the measure does not simply reduce payroll costs. Employers will need to apply the capped indexation correctly and account for the linked employer contribution in payroll processing.
 

How EY can help you

Employers should identify which employees have a fixed full-time equivalent monthly salary above EUR 4,000, check when the next sector or company indexation will occur, and ensure that payroll systems are ready to process both the capped indexation and the linked employer social security contribution.

EY can help you to monitor the application of the capped indexation measure and assess the payroll impact across employee populations and indexation moments.

If you would like to understand how capped indexation may affect your Belgian workforce, payroll budget or remuneration policy, please reach out to your EY contact.