Cent index: a new pay moderation contribution for employers

On 1 June 2026, the cent index entered into force. Alongside it, a new employer social security contribution, the "wage moderation contribution," is introduced. This means you won't keep the full savings on your pay cost; part must be paid to the government.

This AI-generated translation may contain errors and should not be considerd legal advice. For accurate info, refer to the Dutch or French version or consult your Securex Legal Advisor.

Penny index

The penny index is a temporary limitation of the automatic pay indexation in two phases. With this measure, the indexation on the part of wages above €4,000 (pro rata for part-time workers) is temporarily limited twice to a maximum of 2%, first from 1 June 2026 and again from 1 January 2028. Once the 2% cap is reached, the indexation will be applied normally again. For gross wages up to and including €4,000, there is no change and the normal indexation remains applicable.

Because wages above €4,000 gross are only partially indexed, your labour costs will increase less strongly than with classical indexation. On the other hand, there is a wage moderation contribution withheld on this benefit.

The wage moderation contribution

In addition to the temporary limitation of the indexation, as an employer you must pay an additional social security contribution, whereby you give back about half of your saving to the government. This is the wage moderation contribution.

For a gross salary of €6,000, an indexation of 2% would normally lead to a pay rise of €120. Due to the penny index, the indexation on the part above €4,000 is limited. The indexation is not calculated on €6,000 but on €4,000. Your employee therefore receives only €80 indexation instead of €120.
You pay €40 less indexation.
Taking into account an employer's contribution of 25%, this amounts to a saving of €50. Of that saving, as an employer you must give back half again via the wage moderation contribution. You therefore transfer €25 to the government. Net, you only keep a limited saving.

The 3 phases of the wage moderation contribution

There are different contributions depending on the phase in which one finds oneself:

First phase: the special wage moderation contribution, during the first (starting 1 June 2026) and the second moderation period (starting in 2028)
Second phase: the provisional consolidated wage moderation contribution, once the 2% moderation effect has been reached for the first time in all sectors;
Third phase: the definitive consolidated wage moderation contribution, once the 2% moderation effect has been reached for the second time. This still needs to be further developed by Royal Decree.

Calculation of the first temporary wage moderation contribution

This is the contribution you as an employer will pay from the start of the penny index in your sector or company. The calculation of this contribution is done using a complex formula.

[[Monthly salary – (4000 euros x (1+index increase)) x index increase capped at 2% expressed in decimals) + Monthly salary – (4000 euros x (1+index increase)) x index increase capped at 2% expressed in decimals] x Global employer contribution rate, expressed in decimals)] x 50%

An illustrative example

Example in sector X, wages are indexed by 2% in June 2026 and the base contribution is 25%. An employee works full-time and has a salary of €6,000. After the capped indexation, he therefore receives a salary of €6,080. Then the temporary wage moderation contribution is as follows:

[(6080 – 4000*1.02 * 1) *0.02] + [(6080 – 4000*1.02 * 1) *0.02 *0.25]/2
(6080–4080) *2%+ [(6080–4080) *2%*25%]/2
2000*0.02*1.25/2
(40 + 10) /2 = €25 contribution

And what after the first temporary wage moderation contribution

Once the first wage moderation has been fully applied and the 2% is reached everywhere, the indexation will proceed normally again. At that moment, this temporary contribution will be replaced by the provisional consolidated wage moderation contribution. How this contribution will look still needs to be established by Royal Decree.
In 2028, the second temporary wage moderation contribution will follow, and once all sectors have reached the 2%, the definitive consolidated contribution will follow. But beware, the amount of €4,000 in the formula will then be indexed by 2%.
As soon as we have more information about this, you will read it on Lex4You.

To whom and what does this contribution apply?

This contribution applies only to employees who fall under the ordinary social security contributions, and therefore does not apply to students, flexi-jobs. The public sector is also excluded, except for autonomous public enterprises.

The contribution is calculated only on the basic salary and therefore not on bonuses or other extralegal benefits such as the end-of-year bonus or luncheon vouchers.

But beware: This contribution is due on the basic salary part of termination payments.

When is this contribution calculated?

The contribution must be calculated monthly per employee and declared quarterly (sum of the three months).

What does Securex do for you?

Securex will calculate the wage moderation contribution for you and transfer it to the social security.

Are you curious about the concrete impact of the penny index on your labour costs? We have developed a report with which you immediately see what the penny index yields and what this means for your employees' wages. The report explains step by step the impact on your company. Would you like more details or an analysis per employee? Request your analysis via MyHr@securex.be.