Wage indexation: applicable provisions from 2012 to 2014 Tuesday, September 25, 2012

You can also dowload this article in PDF here


Following the measures adopted last January (1) in the context of the financial crisis, the traditional automatic wage indexation mechanism is suspended during the years 2012 to 2014.

During this period, the system of wage indexation is modulated as follows:

• The indexation (which should have taken place in March 2012) is postponed to 1 October 2012 and
• A minimum period of twelve months must elapse between two indexations, postponing future indexations at the earliest to 1 October 2013 and to 1 October 2014.

As a matter of fact, wage indexation will take place once a year during the three years concerned.

The cost of living index will increase by 2.5% to 756.27 points as of 1 October 2012.

As a consequence, the monthly gross salaries will increase by 2.5%. Social parameters such as the minimum and maximum social security ceilings as well as the care insurance deduction will also increase by 2.5%.

(1) Law of 31 January 2012 “adaptant certaines modalités d’application de l’échelle mobile des salaires et traitements et modifiant l’article 11 de la loi modifiée du 22 juin 1963 fixant le régime des traitements des fonctionnaires de l’Etat”.

NEW SOCIAL PARAMETERS
AS OF 1 OCTOBER 2012

INDEX: 756.27

MINIMUM SOCIAL WAGE (MSW)
€244.16 at index 100



SOCIAL SECURITY CONTRIBUTIONS



(1) Occasional allowances and indemnities as well as bonuses and benefits in kind are subject to health insurance contribution at a rate of 2.80% (employer’s part) and 2.80% (employee’s part)
(2) 1.4% of gross earnings after deducting an allowance of a quarter of the MSW for non-qualified employees (€461.63). Full reduction for 150 hours worked per month.

SOCIAL SECURITY CEILINGS




REMUNERATION OF STUDENTS during school holidays



IF Group is not responsible for any errors, omissions or for the results obtained from the use of this information. The information contained in this document is for general guidance on matters of interest only.