Taxshift as from 1 january 2019: a first look ahead

On 1 January 2019 we will reach the third and final phase of the tax shift for the time being. In practice, the employer's cost will hardly decrease.

PROFIT SECTOR (CATEGORY 1 STRUCTURAL REDUCTION)

The basic employer's contribution will not fall further and remains set at 25.00%.

The structural reduction was gradually reduced for the profit sector (category 1) to a reduction for low-wage employees. This group will be expanded and the reduction will be reinforced on 1 January 2019:

It immediately becomes clear that the new wage limit hardly exceeds the previous one: only 8.00 EUR more on a quarterly basis! This is due to the fact that the amount for 2019 was already fixed in April 2016, at the start of the tax shift. Between April 2016 and January 2019, the wage limits of the structural reduction were indexed three times, and the new amount for 2019 at the most absorbs these indexations.

To be effective, we should index the new salary limit of 9,035.00 EUR, which was planned at the time in 2016, by three times 2%. This is not provided for in the regulations - any adjustment can only be made on the basis of a (new) political decision. No plans in this respect are known at the moment.

NON-PROFIT SECTOR (CATEGORY 2 STRUCTURAL REDUCTION)

This group includes the employers of the Social Maribel sectors, with the exception of JC 318 (which follows category 1) and the sheltered workplaces (category 3).

The basic employer’s contribution of these employers was never included in the tax shift, and will be maintained at 32.40% in 2019 as well.

The structural reduction is a lump sum of 49.00 EUR, topped up with a supplement for low and high wages respectively. The low wage limit will be raised on 1 January 2019:

Here too, the expansion of the target group of low wages is insignificant, due to the limited increase of the wage limit compared to the previous indexed limit (only 42.00 EUR increase on a quarterly basis). The conclusion is similar to that for the profit sector.

SHELTERED WORKPLACES (CATEGORY 3 STRUCTURAL REDUCTION)

Disabled employees

Disabled employees are not liable to the wage moderation contribution. As a result of the tax shift, their basic employer’s contribution has fallen to 19.88%, and will not fall further in 2019.

The structural reduction is rising through an increase in the lump sum and in the wage limit for low wages:

The larger structural reduction for 2019 is entirely accounted for by the higher lump sum. The wage limit for low wages is hardly rising, for the same reason as indicated for categories 1 and 2.

Non-disabled employees

The basic employer's contribution will not fall further, and remains set at 25.00%.

The structural reduction is limited to non-disabled employees earning relatively low wages, but the wage limit is higher than for employees of the profit sectors. Here too, the target group will be expanded on 1 January 2019:

The effect of the three indexations between April 2016 and January 2019 is the most significant for this group: the wage limit for 2019 is even lower than the previous wage limit.