Limitation of automatic salary indexation: what does the ‘index in cents’ mean for your organisation?
09 Jun 2026
On 1 June 2026, the programme act that includes the much-debated limitation of automatic indexation of salaries – colloquially called the ‘index in cents’ – was published in the Belgian Official Gazette. This new wage moderation system will twice limit the automatic indexation of salaries exceeding €4,000 gross per month; both times until a 2% moderation target is reached. This means that, while salaries up to €4,000 remain fully indexed, the portion exceeding this threshold will receive limited or no indexation until that moderation target is met. The first moderation period started on 1 June 2026 and the second one is expected to start on 1 January 2028.
Importantly, employers will have to transfer part of the savings they realise because of this wage moderation measure to the National Social Security Office in the form of specific wage moderation contributions.
Note that this limitation of automatic indexation applies both in the public and private sector, however, we’ll only focus on the latter in this newsletter.
Automatic indexation of salaries in Belgium
The Belgian system of automatic indexation of salaries is designed to protect employees' purchasing power against inflation. Under this system, salaries are linked to increases in the health index (a modified version of the consumer price index). There is no one indexation mechanism that applies to the entire private sector. Rather, the automatic indexation takes different forms depending on the sector, with each joint committee applying its own timing and formula. This means that indexation mechanisms vary from e.g. 1% or 2% increases at variable times (when the pivot index is surpassed accordingly) to monthly, quarterly or annual indexation at variable percentages.
The ‘index in cents’: a new approach to wage moderation
The ‘index in cents’ measure imposes a mandatory limitation on automatic salary indexation for employees whose reference salary – i.e. the fixed monthly base salary per the wage scale or contract, expressed on a full-time basis – exceeds €4,000 gross per month. Salaries at or below this threshold remain fully indexed during the moderation periods. The threshold itself is assessed when the indexation mechanism is applied. Importantly, remuneration elements such as bonuses, meal vouchers or overtime pay are excluded from assessing whether the threshold is met.
More specifically, all indexation mechanisms will, for employees whose reference salary exceeds the threshold, be subject to a 2% moderation twice. The first moderation period started on 1 June 2026 and the second one, for which the €4,000 reference salary will be indexed, is expected to start as from 1 January 2028.
In practical terms, this moderation means that – when an indexation cycle occurs after the start of the moderation period – only the salary portion up to €4,000 gross is fully indexed; the excess receives no indexation until the 2% moderation is reached. Depending on the sector’s indexation mechanism (see above), it could take more than one index cycle to reach the 2% moderation. This will typically occur in a sector where the salaries are indexed each month or bi-monthly. In such case, the portion of the salary exceeding €4,000 gross per month will not be indexed until, after adding up the different indexation percentages applicable since the start of the moderation period, the cumulative total 2% moderation is reached.
Conversely, if an index cycle exceeds 2% – as will likely occur in e.g. joint committee no. 200, which indexes annually in January – a two-step method applies: (1) the indexation cycle’s first 2% is applied only to the salary portion up to the €4,000 gross per month threshold; (2) the remainder of the index cycle applies to the entire reference salary.
It’s immediately apparent that, to account for the significant differences in sectoral indexation mechanisms, this wage moderation system has become highly complex.
Specific wage moderation contributions
Adding to the complexity, is the fact that – rather than this system solely being a wage moderation measure to manage companies’ wage costs – it’s equally construed as a governmental budgetary measure.
Indeed, companies must transfer part of their wage moderation savings to the National Social Security Office through specific wage moderation contributions.
During the first and second moderation period, a specific wage moderation contribution will be due on salaries exceeding the threshold, calculated according to a dedicated formula. For a full-time worker, this contribution equals half of the difference between (i) the monthly gross salary after limited indexation, and (ii) the monthly gross salary that would have applied under full indexation, increased with the overall employer social security contribution (25%).
Following these two moderation periods, a single consolidated wage moderation contribution will remain in place to preserve the moderation achieved. The details of this contribution will be determined by Royal Decree.
Key takeaway
While the ‘index in cents’ system partly aims to moderate wage costs, its practical implementation is far from straightforward. The complexity arises from the interplay between the sector-specific indexation mechanisms, the two successive moderation periods and the specific wage moderation contributions that employers must pay to the National Social Security Office. Employers should carefully assess how this measure affects their organisation, considering the applicable sectoral indexation mechanism and the timing of the moderation periods, and ensure they comply with the requirements flowing from this new legislation.
If you have any questions regarding the ‘index in cents’ and its impact in your organisation, don’t hesitate to reach out; we’d love to hear from you!
