Belgium traditionally adjusts employees’ gross wages for inflation through automatic indexation. Each sector applies its own rules—some index annually, other quarterly or monthly and some trigger indexation when a specific inflation threshold is reached. Depending on the sector, either minimum wages alone or both minimum and actual wages are indexed.
A new measure, the “cent index,” modifies these mechanisms and may affect both Belgian employees and employees seconded to Belgium, meaning in the latter case that foreign businesses operating in Belgium could be affected.
The new measure introduces a cap on wage indexation that will be implemented in two phases:
Under the new rules, any mechanism that links wages to indexation—whether through regulatory and statutory provisions, collective employment agreements or individual contracts—will only apply up to 2% of the “reference wage,” capped at EUR 4,000 gross wages. As a result:
Whether the cap applies is determined based on the reference wage, which is the employee’s full-time gross fixed wage, excluding:
Hourly rate x Full-time weekly working hours x 13 ÷ 3
For part-time employees, the reference wage is prorated.
The law requires only that an effect of 2% must be achieved by the end of the first limitation period. Because sectors use different indexation methods and timings, several outcomes are possible:
The government aims to achieve two objectives with the cent index: support businesses and generate a positive impact on the budget. To achieve these goals, the law introduces a special “wage restraint contribution” payable by employers to the National Social Security Office (NSSO). The contribution equals half of the revenue from wage restraint, plus the employers’ social security contributions. The law includes a detailed formula for calculating the special contribution. The NSSO will collect the contribution together with the social security contributions for the relevant quarters.
In addition, employers must pay a consolidated wage moderation contribution to the NSSO. A provisional consolidated wage moderation contribution becomes due when the effect of the cap is achieved for the first time, and a definitive contribution becomes due when the effect is achieved for the second time. According to the NSSO, the provisional consolidated contribution will first be collected in the third quarter of 2027.
Catherine Wieërs
BDO in Belgium
A new measure, the “cent index,” modifies these mechanisms and may affect both Belgian employees and employees seconded to Belgium, meaning in the latter case that foreign businesses operating in Belgium could be affected.
Overview of the New Measure
The new measure introduces a cap on wage indexation that will be implemented in two phases:
- Phase 1 (as from June 2026): The cap applies to the portion of gross wages above EUR 4,000; and
- Phase 2 (as of January 2028): The capped indexation will apply again and the EUR 4,000 gross wage threshold will itself be indexed.
How the Cap Works
Under the new rules, any mechanism that links wages to indexation—whether through regulatory and statutory provisions, collective employment agreements or individual contracts—will only apply up to 2% of the “reference wage,” capped at EUR 4,000 gross wages. As a result:
- Wages up to EUR 4,000 gross continue to follow the normal indexation rules.
- The portion of wages above EUR 4,000 gross may increase by no more than 2% during each of the limitation period.
What Counts as the Reference Wage?
Whether the cap applies is determined based on the reference wage, which is the employee’s full-time gross fixed wage, excluding:
- Meal vouchers;
- Overtime pay;
- Bonuses (performance, end-of-year, profit-sharing);
- Eco vouchers; and
- Night/weekend premiums.
Hourly rate x Full-time weekly working hours x 13 ÷ 3
For part-time employees, the reference wage is prorated.
Calculation Examples
The law requires only that an effect of 2% must be achieved by the end of the first limitation period. Because sectors use different indexation methods and timings, several outcomes are possible:- Sector indexation exceeds 2%: Only the first 2% applies to wages exceeding EUR 4,000; the remainder applies to the full wage.
| Wage indexation within the sector | Reference wage | Indexation without cap | Indexation with cap |
| 2.2% | €5,000 | €5,000 x 2.2% = €110 Indexed wage = €5,110 |
Step 1 – cap: €4,000 x 2% = €80 Step 2 – Indexation of full reference wage: €5,000 x (2.2% - 2%) = €10 Indexed wage = €5,090 |
- Sector indexation is below 2%: In this case, the cap is applied gradually across multiple indexations until the 2% limit is reached.
| Wage indexation within the sector | Reference wage | Indexation without cap | Indexation with cap |
| 1% in June 2026 | €5,000 | €5,000 x 1% = €50 Indexed wage = €5,050 |
Step 1 – cap: €4,000 x 1% = €40 Step 2 – Indexation of full reference wage: The portion of the reference wage above €4,000 is not indexed since 2% was not reached in June 2026. Indexed wage = €5,040 |
| 1.5% in September 2026 | €5,040 | €5,040 x 1.5% = €75.60 Indexed wage = €5,115.60 |
Step 1 – capping: €4,000 x (2%–1%) = €40 Step 2 – Indexation of full reference wage: €5,040 x (1.5%+1%-2%) = €25.20 Indexed wage = €5,040 + €40 + €25.20 = €5,105.20 |
- Sector indexation is equal to 2%: The full 2% applies only to the first EUR 4,000.
| Wage indexation within the sector | Reference wage | Indexation without cap | Indexation with cap |
| 2 % | €5,000 | €5,000 x 2% = €100 Indexed wage = €5,100 |
€4,000 x 2% = €80 Indexed wage = €5,080 |
Impact of the Cap on Wage Indexation
The government aims to achieve two objectives with the cent index: support businesses and generate a positive impact on the budget. To achieve these goals, the law introduces a special “wage restraint contribution” payable by employers to the National Social Security Office (NSSO). The contribution equals half of the revenue from wage restraint, plus the employers’ social security contributions. The law includes a detailed formula for calculating the special contribution. The NSSO will collect the contribution together with the social security contributions for the relevant quarters.In addition, employers must pay a consolidated wage moderation contribution to the NSSO. A provisional consolidated wage moderation contribution becomes due when the effect of the cap is achieved for the first time, and a definitive contribution becomes due when the effect is achieved for the second time. According to the NSSO, the provisional consolidated contribution will first be collected in the third quarter of 2027.
What This Means for Employers
- Companies with Belgian employees—or employees seconded to Belgium—should review compensation structures to understand the impact of the cap.
- Sectors with frequent indexations may see the cap apply as from 1 June 2026 while others will only see its effect as of 1 January 2027 or even later.
- Budgeting, assignment cost projections and payroll processes may need review and adjustment.
- Employers should prepare for both the wage restraint contribution and the consolidated wage moderation contribution.
Catherine Wieërs
BDO in Belgium