Every January, Belgian’s Joint Industrial Committee 200 (JIC 200) completes a salary review and recommends an adjustment in keeping with the cost of living. That adjustment is referred to as salary indexation and affects employees of companies that are subject to JIC 200 oversight. The JIC 200 group, which is for employers who do not belong to any other committee, currently represents over 450,000 white collar employees and is the largest joint committee in Belgium.
Salary Adjustment Mechanism
The salary adjustment mechanism used by the JIC 200 is specifically linked to the Consumer Price Index (CPI) which tracks the prices for a variety of goods and services in Belgium over time. The JIC takes a number of factors into account when consulting on its adjustment: the CPI contains historic economic information, along with short-term and long-term forecasts, and an economic calendar.
Monthly salaries in Belgium are subject to a specific adjustment mechanism and increased by a percentage equal to the rate of inflation from the previous year.
The indexation percentage for January 2020 has been confirmed as 0.8%.
With the adjustment finalised, employers must ensure that their employees’ gross salaries are increased by 0.8% from 1 January 2020. It is up to employers to decide whether their employees fall under the JIC 200 rules and whether to implement the wage increase.
In addition to the wage increase, the adjustment mechanism also specifies an annual premium that should be paid in June. In 2020, that premium is €265.12.
Employers may choose to replace the annual premium payment with a benefit of equal value.
Preparing Your Payroll
The JIC 200 salary adjustment applies from 1 January 2020 so employers in Belgium must ensure their payroll departments implement the change to reflect that immediately. If you are an international employer with employees working in Belgium, and outsource your payroll to a third-party, talk to your provider to find out what you need to do (if anything) to integrate the gross salary increase.
For more information on Belgium’s tax and payroll landscape, browse activpayroll’s Global Insight Guide to Belgium.