Tax Calculator Belgium

Tax Calculator Belgium

Tax Calculator Belgium: One Essential Tool for International Contractors

As an international contractor, one of the first questions you must answer is how much income tax you will be paying when working abroad. Naturally, every country has its own income tax code and rates, so this knowledge is the only way to arrive at your monthly net salary.

Belgium is a popular country for expat contractors, but it also has one of the highest income taxes in Europe.

This income tax calculator for Belgium will help you with your taxes before you even begin working.

Tax rates can be valuable information as you negotiate your pay rates with clients in Belgium, as an attractive salary can be reduced by as much as 50% by taxes.

The average worker in Belgium pays 54% in taxes, compared to a global average of 42%. Our income tax calculator can help you get started to arrive at your net salary in Belgium.

How to use the monthly salary calculator in Belgium to determine net salary

To use the Belgium monthly salary calculator, you will only need your pay rate and period.

So if you are paid hourly, weekly, or monthly those are the amounts you use. Belgium accepts the Euro as its currency, so the calculator has that as the default.

But you can also enter an alternate currency, such as USD, if you want that information.

Salary Calculator Disclaimer: The tax calculator for Belgium is for informational purposes only. Tax rates and policies change frequently and must be double-checked to confirm your net salary in Belgium.

Belgium income tax brackets and more

Taxes in Belgium are calculated after deducting social security charges and professional expenses. Belgium uses a progressive tax system, meaning that the rate increases for higher income levels. There are four distinct tax brackets: 25%, 40%, 45%, and 50%. The 25% rate only applies to annual income up to EUR 13,870, and the higher rates apply to any income above that. Income tax rates are the same for self-employed or if you choose to be an employee of your client, but self-employed can deduct more expenses.

Because most contractors will be earning much more than the base rate bracket, you can expect to pay 40-50% of excess income in taxes. While the actual rates are not abnormal for Europe, the low-income thresholds will result in a relatively high tax bill on overall income. This is why the Belgium monthly salary calculator can be valuable for projecting net salary.

Local or communal taxes must also be accounted for when calculating net salary. These rates range from 0-9%, with an average of 7% for residents. For non-residents, a flat 7% surcharge is levied regardless of the region where you work.

Resident status and income tax in Belgium

Unlike many countries, Belgium does not use a minimum number of days threshold to determine tax residency. The general rule is that any expat that intends to stay for 18-24 months will be deemed a resident, but it’s decided on a case-by-case basis.

Both residents and non-residents pay the same income tax rates, but residents will be liable for tax on worldwide income.

Non-residents (which will likely include expat contractors) only pay tax on income earned in Belgium but will not be able to claim the personal exemption unless 75% or more of their income is generated in Belgium.

The social security system in Belgium is extensive, and if you contribute, you will avail all the benefits as an expat. For contractors in the EU, it is likely Belgium has an agreement with your home country that allows you to only pay into the home system. But if you are in Belgium full-time, choosing the Belgium system for contributions may be a good idea.

Contributions can be as high as 20% of actual net revenue, but that revenue may be difficult to project for new contractors. Belgium allows you to contribute on a minimum threshold for the first three years (est. EUR 14,000)

But if you earn more, you should pay the accurate amount. Payments are made quarterly to a social insurance fund, and there is an annual maximum for high earners. If you become an employee of your client, your contribution is approximately 13%.

This is one area where using an umbrella company in Belgium can be a real advantage. The umbrella company will know exactly how to calculate both tax rates and social contributions, and they will do it for you. And you can always refer to our salary tax calculator for Belgium to get started.

The new Belgium expat tax concession scheme

On January 2, 2022, Belgium implemented a new tax expat tax concession scheme for foreign professionals working in Belgium. This was done to promote international business and address the high tax rates in Belgium.

There are a number of criteria, most of which require that you are new to Belgium and make at least EUR 75,000 annually. If you elect the new tax scheme, you will automatically be deemed a tax resident regardless of the length of stay.

The chief benefit of electing the new tax scheme is that 30% of your earnings each year will be exempt from tax.

However, there is a EUR 90,000 cap on the exemption, so if you earn more, the excess will be fully taxed. As a tax resident, you will also pay tax on worldwide income unless there is a tax treaty with your home country.

Belgium income tax brackets and other information

The 25% rate only applies to annual income up to EUR 13,870, and the higher rates apply to any income above that. Income tax rates are the same for self-employed or if you choose to be an employee of your client, but self-employed can deduct more expenses.

How can Contractor Taxation help with tax calculation in Belgium?

If you are new to contracting in Belgium, calculating taxes and any expat benefits can be overwhelming. This is where contracting through an umbrella company can be of real value: from invoicing, receiving payment, and paying taxes.

Contractor Taxation has fully vetted umbrella companies in Belgium that can assist you with understanding the tax rates and computing your net salary. This means that you can know your real income pre-hire and will have an ally throughout your contracting journey in Belgium.

Other benefits of umbrella companies include the following:

Manages all client payments, tax withholding, and any social contributions
Issues you a payslip each month to a local or foreign account
Sponsors work permits
Helps set up the contract with the client
Moderates any disputes with your client
Advises on access to totalization and double taxation treaties

If you have questions about how an umbrella company can help you as an international contractor in Belgium, please contact us at Contractor Taxation.

Taxes in Belgium: FAQ

Is Belgium a high tax country?

Belgium would be considered a high-tax country for those earning more than EUR 50,000 annually, as the majority of income would be taxed at 40-50%. One survey stated that Belgium is the third highest tax country in Europe.

Why is Belgium’s tax so high?

There are many policy reasons, but many point to the broad subsidization of health care, higher education, and welfare programs. An expat won’t benefit much from these, but you still must pay the prevailing tax rate.

How much income tax do you pay in Belgium?

Your income tax rate in Belgium will depend on your annual pay rate and each level of income results in more tax being paid. The monthly salary calculator for Belgium can give you this information. Taxes for contractors can be reduced by maximizing business deductions and electing the expat tax scheme.

What salary should I expect in Belgium?

The average salary in Belgium is around EUR 3700 per month but will vary according to industry and professional experience.

How do you calculate your payroll taxes?

There is no payroll tax per se in Belgium, and self-employed contractors would not pay it in any case. For employees, income taxes and social security are calculated and withheld in payroll prior to issuing a payslip.

Is tax calculated on gross or net income?

Income tax in Belgium is calculated on net income after business expenses, and social security contributions are deducted. There is also a personal exemption (for residents) that is deducted from tax.

How do I file and pay taxes in Belgium?

Step 1: You will receive a tax return form from the Belgian tax authorities in May/June of the ‘tax year,’ which allows you to declare income from the previous year or ‘income year.’

Step 2: All residents and non-residents must file an annual Belgian tax return. This can be done online via the Belgian government’s tax portal or via post to the address listed at the top of your tax return form.

Step 3: Before June 30 in the year following the ‘tax year,’ an assessment notice will be sent to you. Any tax due must be paid to the tax authorities within 2 months of them sending the assessment notice.

What will be the net home salary when I am contracting in Belgium?

First, use the income tax calculator for Belgium to arrive at a net salary in Euros. Then convert that amount into your home currency minus any taxes that may be due in your home country.

Tax Calculator Belgium