Belgium: Salary Indexation
Forecasted Rates 2024
In Belgium there is an automatic, mandatory enforceable salary increase at the start of every year for all employees working for companies subject to the Joint Industrial Committee 200 (JC 200).
Amazing right? Maybe, for the employee’s but not so much for the employers if budgets are tight.
In January 2023, Belgian employers (subject to JIC 200) increased staff compensation by 11.08%. The rate was a record high and considerably higher than 2022’s increase of 3.58%.
As we enter Q4, finance experts are looking to see the rates expected for 2024 and if we will need to prepare for another big increase.
Current forecasts hint that the increase will be approximately 1.5%.
Although this is significantly lower than the increase in 2023, employers need to prepare and begin budgeting for the new financial year.
So why does this unique thing happen every year?
Belgium’s salary indexation is a system that adjusts salaries to keep pace with the cost of living. This system operates through a series of regularly updated indices that track changes in the prices of a basket of goods and services.
When the index surpasses a predetermined threshold, salaries are adjusted upwards to match the cost-of-living increase. This ensures that workers can maintain their real income levels in comparison to cost of living.
However, the employers might not always like this and after 2023’s increase employers have been calling for a series of measures to safeguard businesses competitiveness and white colour business describe the continuous increases and “untenable”.
These include caps, social cost free bonus values. One thing we know is this will not be passed for 2024.
Inform your finance leads so they can budget for next year and keep an eye on our updates as the rates are confirmed.
We at Agility would love to hear your thoughts on Belgium’s Indexation so please reach out and lets chat.