Budget agreement 2025: social and legal measures impacting employers

“Cents Index”: adjustment of wage indexation

The agreement provides for the introduction of a so-called cents index, whereby:

• wages are fully indexed up to a gross amount of €4,000 per month;

• wages above this threshold receive a fixed (cents-based) increase instead of a percentage-based indexation.

Employees with a gross monthly salary exceeding €4,000 will receive indexation calculated only on the amount up to €4,000. In practical terms, this results in an increase of €80 (2% of €4,000). The salary portion above this threshold will not be indexed.

This measure will be applied in 2026 and again in 2028.

For employers, this leads to a flattened increase in higher wages, while low and medium wages retain their traditional indexation. This enhances predictability of wage costs, but may lead to an internal reassessment of wage structures.

A similar limitation will also be introduced for pensions and social benefits.

Work bonus and minimum wage

The work bonus will be increased, resulting in a €50 rise in the minimum wage as from April 2026. This strengthens purchasing power at the lower end of the labour market, while the net wage increase is not fully passed on to employers’ wage costs. Nevertheless, companies will need to monitor internal wage balances carefully.

Measures concerning long-term incapacity for work

The budget agreement introduces measures aimed at facilitating a faster return to work for employees who are ill. This will require companies to adopt a more proactive and structured absence management policy, with a focus on follow-up, documentation and cooperation with prevention services.

In addition, certain companies will be required to pay a solidarity contribution equal to 30% of the sickness and disability allowance for a period of four months. The proceeds of this contribution are, however, expected to be returned to companies.

Pensions and bonus-malus system

The statutory retirement age remains set at 66 until 2029. As from 2030, it will increase to 67. Early retirement will remain possible, but employees who cannot demonstrate a sufficient number of effectively worked years will receive a lower pension benefit (malus).

This reduction results from the new bonus-malus system, which is intended to encourage employees to remain professionally active for longer. The pension bonus (granted when working beyond the statutory retirement age) is expected to apply as from 1 January 2026, while the malus will only apply from 2027 onwards.

Periods of long-term illness will henceforth be recognised as assimilated periods, just like care leave, maternity leave and temporary unemployment, ensuring protection against the pension malus in the event of early retirement. In this way, employees who temporarily drop out due to circumstances remain protected in terms of pension accrual. Finally, the first year in which an employee starts working after completing their studies will now also be fully counted as a worked year for pension calculation purposes.

Remuneration via copyright

Remuneration of employees through copyright income will become less attractive, as the lump-sum expense deduction is expected to be abolished.

Withholding tax exemption for night and shift work and scientific Research

Companies that make intensive use of night or shift work (for example in production, logistics or the chemical industry), or that employ R&D teams, should take the following provisions into account:

• the tax benefit will remain in place, but will no longer be indexed in the coming years;

• the exemption will therefore be maintained at its 2025 level;

• as the benefit will no longer increase in line with indexation, its relative impact will decrease as wage costs rise.

In practice, this will lead to a gradual erosion of the tax benefit, requiring companies to adjust their long-term planning and cost calculations accordingly. Specific operational choices, such as shift structures or R&D investments, may therefore be affected over time.

The government has announced that further concrete guidelines will follow. Companies should therefore remain alert to additional administrative or technical clarifications.

Additional birth leave

As from next year, families will be entitled to an additional week of birth leave (per family).

Please note: this agreement is subject to the official legal texts that are yet to be published on this subject.