Belgium lags behind in take-home pay survey

A Europe-wide income survey carried out by the consultancy firm Deloitte has revealed that particularly those in the higher income bracket in Belgium have lower take-home pay than high-earners elsewhere in Europe. This is due to the highest tax band in Belgium being levied from a relatively low level compared with other European countries. However, as living expenses (especially rents and the cost of buying real estate) are lower here than in many other European countries, Belgians in employment score around the average when it comes to disposable income.

According to the study, only those in Greece, Denmark and Italy take home a lower percentage of their gross salary. The study looked at wage costs, take home pay and disposable income in 19 European countries.

In Belgium, those with a gross income of 70,000 euro/ annum take home less than 40,000 euro/annum (see graph below. Switzerland, the Czech Republic and Malta are the countries with the smallest difference between gross salary and take-home pay.

The reason that Belgium scores well down the list when it comes to take-home pay for higher earners is that here the highest (50%) tax band already kicks in from 38,080 euro/annum. In Sweden, for example, the highest rate of tax is only levied on income above 65,947 euro/annum.

Belgium doing better in survey thanks to tax shift

The tax shift introduced by the current Federal Government has meant that Belgium has fared better in this year’s survey than it did in last year’s.

Employees on lower and average incomes have seen their take-home pay rise. However, the impact of the tax shift has remained limited with Belgium moving up just one place in this year’s survey.

Currently, someone with a gross annual income of 25,000 euro/annum takes home just under 20,000 euro/annum.
Meanwhile, those on very high incomes fare much worse. In Belgium someone with a gross salary of 125,000 euro/annum takes home just under 60,000 euro.

In Switzerland someone on the same gross income would take home more than 90,000 euro/annum. Belgium is 17th when it comes to take-home pay for the highest incomes.

Acceptable level of income

Taking into account the cost of living and the level of child benefits Belgian employees are about average when it comes to disposable income.

Real estate in Belgium is relatively affordable and child benefit is high in comparison with many other European countries. Deloitte’s Patrick Derthoo told VRT News that “Belgians have an average score when it comes to disposable income. We are worse off than the Germans and people in Luxembourg, but better off than the Dutch, the French and the British”.