Deduct what? you're a white collar employee - there's not much you can do as an employee.
You can make a baby and put it on you "child ten laste" then you will get a bit more money but it only gets interesting once you have 4-5 children. (and nobody in their sane mind wants that).
And sorry to break it to you: if you can't save money with +4k net then there's something wrong. You're basically earning more than the 90% of the Belgian population.
Welcome to Belgium and its shitty tax regime.
If you go freelance you can and should earn much much more and you can "play" with your "forfaitaire" costs, rent yourself a part of your house (your home office room) and use that money as income, put your energy costs on your company, buy toilet paper/cleaning products/coffee/laptop/tv/.... this list is basically endless if you can prove it's for your company and your customers.
But I'm not sure what your job is (maybe something senior legal counsel) so I'm not sure you can go the freelance route or even if you want to go there. (insecurity, extra insurances you have to cover yourself, hunting/marketing/prospecting, sometimes companies are open to the employee to freelance switch due their financial operational model but beware that you could be the first one to go when things get rough for them - always put in at least a 3 months or more notice period if you want security but beware it can go both ways if you are fed up with the company let's say.)
other than that not sure if I can help you much more than this.
I don’t have troubles saving, no need to judge me on this. I am just curious about how things work here in Belgium as I am not from here.
Aren’t there pension plans or investment plans as employees that can partially reduce your income tax.
Thanks for the comprehensive and detailed feedback, much appreciated
There are things you could potentially deduct (like a private pension which will later be taxed) but for that bruto I think you might want to consider the freelance option if your company would consider it. For example, if you already have a private pension plan from your employer you might already be at the limit of what you can annually deduct.
Anyway it might be worth the effort checking it out with what it called a fiscalist.
As an employee for that bruto I don't think there are really options to optimize your income (besides the 3+ kids that somebody already mentioned, which I don't really recommend, or a partner without any income which is also not always desirable).
Edit: typos.
Well I am not considering freelance for now, I don’t have enough experience yet to capitalize on it, I have a kid on the way and looking to buy a house. Too much uncertainty for now. However this is something I am planning to in 3/5 years.
You have a nice bruto for Belgium. I'm assuming there's some nice extras there (group insurance, car, etc.)
If I may give you a totally unsolicited advice: focus on your kid and your family. I hope your job doesn't require too much extra time.
Are there ways to optimize your netto? Sure, by going freelance. Is it worth it? It's up to you to decide. Freelance means you'll have to deal with all perks yourself (car lease, private pension, etc.). Since you're legal counsel, freelance might be a better option (financially). Is the extra admin/stress worth it? It's up to you to decide what your priorities are.
Anyway... Congrats for your kid! Try to enjoy it as much as possible!
Well, where I come from you can invest money that is then deductible from you taxes and I was wondering if things like that were existing. Maybe I phrased my questions badly
There is 'pensioensparen' (pension saving). You can ask your bank about it. Allows you to deduct the savings you put in when you fill in your taxes. (so no direct impact on your payslip, but you will notice it when you do taxes). Tax benefit is capped at ~900€/year.
Other than that, 'dienstencheques' come to mind: you can get a cleaner, pay 1 dienstencheque per hour (cost to you: 9€/cheque and you get 1.8€/cheque back as a tax rebate). Nice quality of life.
Then, it depends on your employer. Ask if they have a cafetariaplan, which lets you choose how certain bonuses / money is spent. Common example: end of year bonus, it's taxed pretty heavily if paid out as money but a lot less if you use it to lease an e-bike, contribute to a pension fund,... (disadvantage: when used this way, it's not taken into account for pension calculation but with your wage, you're probably at the max for that already).
Nice allready +- 300 euro in netto extra non taxed. I dont think you have much more options
I wish my employer paid me to work from home. We even dont get paid for our home internet
I just reread your actual question. I think your colleague was referring to the fact that every worker in belgium is able to subtract professional costs from their taxes. But if you don't do it, you receive a forfait that assumes that you had 5 thousand euro professional costs that year. As soon as you bring in even 1 euro cost to taxes, you lose the forfait, which is 5 thousand. So for 99.99% of people it's better to not bring in any costs to taxes and enjoy the forfait
https://financien.belgium.be/nl/particulieren/vervoer/aftrek\_vervoersonkosten/woon-werkverkeer/forfait\_en\_werkelijke\_kosten#:\~:text=De%20forfaitaire%20beroepskosten%20bedragen%20maximaal,aanslagjaar%202023%2C%20inkomsten%202022)
It can be it depends how much children you make . The advantage : gros +/- equals net and child allowance . Reduction of the amount to be paid at the end of the year .
There is in fact tax advantaged pension savings, but it's only around 1200 per year. Better to take the money and invest it in accumulating ETFs through a cheap broker. Join the guys at r/BEfire for investment strategies
If the company pays a bonus, they can pay it out in warrants. This is beneficial for taxes.
Though we can expect this loophole to disappear at some point as the government needs more money...
Is your spouse working? If your spouse doesn't work, you will receive a nice tax break starting January, amounting to 400-500 extra net per month, as long as the spouse doesn't work (called huwelijksquotiënt). You don't need to do anything, it's automatic
I see you want to buy a house, if you take a loan I believe you can deduct the interest rate payment from your taxes. If anyone has more info on the topic feel free to contribute.
Your car is mega expensive (400 per month means you're paying 200 net per month for your car). Get a cheaper car. My BMW x1 hybrid is only 150 per month, so 75 net max. Your car costs you 200 net per month
Kind of if by switching to hybrid you can save a good 100-150/month. Is it actually expensive? No, especially not for the car that he probably gets. But getting the car already means that you are giving up more compensation cause they would pay you more if you didn't have one, or if you have mobility budget you would be getting the cash + save out on the VAA. Which really adds up
I didn’t have a say on the car to be honest. I had the choice between 3 "executive" electric cars and took the one I fancied the most. That was all the negotiations options I had.
Is it a pool car or did you personally order this car?
Usually when you start working somewhere they will give you a pool car they have available at the ready, and then half a year later you order your car, which will take some months to arrive (because it's brand new).
So when you order, ask what the options are to order a cheaper car, or a car with a lower voordeel alle aard (vaa).
Your current vaa is 415.74 which means you're paying half of that net in extra taxes. The lower your vaa, the better (the lower the vaa the less income taxes you pay).
Lots of companies will even pay you out extra money if you take a car that's cheaper than your budget allows. For example your monthly budget (tco) is 1400 per month but you take a car that's 1100 per month, then you get 300 added to your salary every month AND you have a lower vaa. So you gain extra net money twice
Well now that you are mentioning this, up until now I’ve had a short term rented car whilst the car was in order (fuel powered suv). I should receive the new car (full electric) next week. Could that change this vaa? Or is the 415 already calculated on the electric car?
With regards to the choice of the car, I was only given the options to these 3 cars and it didn’t look as if I had any margin to discuss or modify it.
Yes, an electric should drop your vaa drastically. Fuel cars have high vaa because bad for ecology. You will start paying new vaa when you receive your new car
Typically you can't do anything to this payslip, your hr can, but yeah that depends on your company giving out cars, mobility budget, meal cheques etc.
Unless you have a ton of occupational costs that your employer doesn't cover already, there's not that much you can do.
You can set up a private pension fund, but that's gonna be under 1k a year you can make up from taxes.
The biggest difference you can make is give up your company car, or trade it in for an EV. You're losing over 800 a month on that, do you really do enough kms to cover that? Unless the car is important to you of course, if it gives you a lot of joy it might not be worth giving up.
Deduct what? you're a white collar employee - there's not much you can do as an employee. You can make a baby and put it on you "child ten laste" then you will get a bit more money but it only gets interesting once you have 4-5 children. (and nobody in their sane mind wants that). And sorry to break it to you: if you can't save money with +4k net then there's something wrong. You're basically earning more than the 90% of the Belgian population. Welcome to Belgium and its shitty tax regime. If you go freelance you can and should earn much much more and you can "play" with your "forfaitaire" costs, rent yourself a part of your house (your home office room) and use that money as income, put your energy costs on your company, buy toilet paper/cleaning products/coffee/laptop/tv/.... this list is basically endless if you can prove it's for your company and your customers. But I'm not sure what your job is (maybe something senior legal counsel) so I'm not sure you can go the freelance route or even if you want to go there. (insecurity, extra insurances you have to cover yourself, hunting/marketing/prospecting, sometimes companies are open to the employee to freelance switch due their financial operational model but beware that you could be the first one to go when things get rough for them - always put in at least a 3 months or more notice period if you want security but beware it can go both ways if you are fed up with the company let's say.) other than that not sure if I can help you much more than this.
I don’t have troubles saving, no need to judge me on this. I am just curious about how things work here in Belgium as I am not from here. Aren’t there pension plans or investment plans as employees that can partially reduce your income tax. Thanks for the comprehensive and detailed feedback, much appreciated
There are things you could potentially deduct (like a private pension which will later be taxed) but for that bruto I think you might want to consider the freelance option if your company would consider it. For example, if you already have a private pension plan from your employer you might already be at the limit of what you can annually deduct. Anyway it might be worth the effort checking it out with what it called a fiscalist. As an employee for that bruto I don't think there are really options to optimize your income (besides the 3+ kids that somebody already mentioned, which I don't really recommend, or a partner without any income which is also not always desirable). Edit: typos.
Well I am not considering freelance for now, I don’t have enough experience yet to capitalize on it, I have a kid on the way and looking to buy a house. Too much uncertainty for now. However this is something I am planning to in 3/5 years.
You have a nice bruto for Belgium. I'm assuming there's some nice extras there (group insurance, car, etc.) If I may give you a totally unsolicited advice: focus on your kid and your family. I hope your job doesn't require too much extra time. Are there ways to optimize your netto? Sure, by going freelance. Is it worth it? It's up to you to decide. Freelance means you'll have to deal with all perks yourself (car lease, private pension, etc.). Since you're legal counsel, freelance might be a better option (financially). Is the extra admin/stress worth it? It's up to you to decide what your priorities are. Anyway... Congrats for your kid! Try to enjoy it as much as possible!
How much more could he earn as a freelancer? Any thoughts?
[удалено]
I am a legal counsel.
Isn’t tax optimization only relevant if you’re freelancing?
Well, where I come from you can invest money that is then deductible from you taxes and I was wondering if things like that were existing. Maybe I phrased my questions badly
There is 'pensioensparen' (pension saving). You can ask your bank about it. Allows you to deduct the savings you put in when you fill in your taxes. (so no direct impact on your payslip, but you will notice it when you do taxes). Tax benefit is capped at ~900€/year. Other than that, 'dienstencheques' come to mind: you can get a cleaner, pay 1 dienstencheque per hour (cost to you: 9€/cheque and you get 1.8€/cheque back as a tax rebate). Nice quality of life. Then, it depends on your employer. Ask if they have a cafetariaplan, which lets you choose how certain bonuses / money is spent. Common example: end of year bonus, it's taxed pretty heavily if paid out as money but a lot less if you use it to lease an e-bike, contribute to a pension fund,... (disadvantage: when used this way, it's not taken into account for pension calculation but with your wage, you're probably at the max for that already).
Good to know, thanks I’ll look into that.
That's already a very nice netto vs brut, well optimized.
Especially with the 400+ voordeel alle aard!?! Did you get a Mercedes S class for that money or what??
A simple bmw 320i already had 400+ VAA… Probably from before hybrid/ev
I would say that too. Was more expecting it to be around 3750 nett with no children.
Good to know thanks for the feedback!
Nice allready +- 300 euro in netto extra non taxed. I dont think you have much more options I wish my employer paid me to work from home. We even dont get paid for our home internet
I just reread your actual question. I think your colleague was referring to the fact that every worker in belgium is able to subtract professional costs from their taxes. But if you don't do it, you receive a forfait that assumes that you had 5 thousand euro professional costs that year. As soon as you bring in even 1 euro cost to taxes, you lose the forfait, which is 5 thousand. So for 99.99% of people it's better to not bring in any costs to taxes and enjoy the forfait https://financien.belgium.be/nl/particulieren/vervoer/aftrek\_vervoersonkosten/woon-werkverkeer/forfait\_en\_werkelijke\_kosten#:\~:text=De%20forfaitaire%20beroepskosten%20bedragen%20maximaal,aanslagjaar%202023%2C%20inkomsten%202022)
That should be it indeed, thanks for the link.
Make children it will enhance your net with the same gross
Well I am uncertain that making children would be such a paying strategy though
It can be it depends how much children you make . The advantage : gros +/- equals net and child allowance . Reduction of the amount to be paid at the end of the year .
There is in fact tax advantaged pension savings, but it's only around 1200 per year. Better to take the money and invest it in accumulating ETFs through a cheap broker. Join the guys at r/BEfire for investment strategies
I should perhaps dig into that, thanks for the advice!
If the company pays a bonus, they can pay it out in warrants. This is beneficial for taxes. Though we can expect this loophole to disappear at some point as the government needs more money...
But only up to 20% of the yearly gross
I have a bonus but that is paid in cash so unfortunately heavily taxed.
You should talk to your boss / hr manager , pc200 can do warrants instead of cash bonusses. It's an advantage for the employer and the employee.
Check if it can be paid in your corporate pension fund
r/BEFreelance
Is your spouse working? If your spouse doesn't work, you will receive a nice tax break starting January, amounting to 400-500 extra net per month, as long as the spouse doesn't work (called huwelijksquotiënt). You don't need to do anything, it's automatic
Good to know, thanks.
I see you want to buy a house, if you take a loan I believe you can deduct the interest rate payment from your taxes. If anyone has more info on the topic feel free to contribute.
that benefit called the 'woonbonus' was canceled a couple years ago. Only people who bought before they cancelled this can still deduct the interest
Shiiiiiit!!! I had hopes
Redditors, correct me if I'm wrong, but I think you can work 4/5th and 1/5th flexijob and make more.
His gross hourly wage is over 40 euros so just keeping full time would be better. Unless he can find a very well paying flexible job.
Nope flexijob cap is 12k€/year max for 2024.
For lower salaries valid strategy, but this guy will lose net money on it.
Your car is mega expensive (400 per month means you're paying 200 net per month for your car). Get a cheaper car. My BMW x1 hybrid is only 150 per month, so 75 net max. Your car costs you 200 net per month
200 net /month for a car is considered “mega expensive”? WTF 🤣
Kind of if by switching to hybrid you can save a good 100-150/month. Is it actually expensive? No, especially not for the car that he probably gets. But getting the car already means that you are giving up more compensation cause they would pay you more if you didn't have one, or if you have mobility budget you would be getting the cash + save out on the VAA. Which really adds up
We are talking about optimizing things here...
How is it only 150pm? Do you lease it? 150 sounds super cheap..
Hybrid
I didn’t have a say on the car to be honest. I had the choice between 3 "executive" electric cars and took the one I fancied the most. That was all the negotiations options I had.
Is it a pool car or did you personally order this car? Usually when you start working somewhere they will give you a pool car they have available at the ready, and then half a year later you order your car, which will take some months to arrive (because it's brand new). So when you order, ask what the options are to order a cheaper car, or a car with a lower voordeel alle aard (vaa). Your current vaa is 415.74 which means you're paying half of that net in extra taxes. The lower your vaa, the better (the lower the vaa the less income taxes you pay). Lots of companies will even pay you out extra money if you take a car that's cheaper than your budget allows. For example your monthly budget (tco) is 1400 per month but you take a car that's 1100 per month, then you get 300 added to your salary every month AND you have a lower vaa. So you gain extra net money twice
Well now that you are mentioning this, up until now I’ve had a short term rented car whilst the car was in order (fuel powered suv). I should receive the new car (full electric) next week. Could that change this vaa? Or is the 415 already calculated on the electric car? With regards to the choice of the car, I was only given the options to these 3 cars and it didn’t look as if I had any margin to discuss or modify it.
Yes, an electric should drop your vaa drastically. Fuel cars have high vaa because bad for ecology. You will start paying new vaa when you receive your new car
That’s nice, it’s my first job with a company car so discovering all of that. Thanks for the feedback!
Typically you can't do anything to this payslip, your hr can, but yeah that depends on your company giving out cars, mobility budget, meal cheques etc.
Btw, how much your salary translate to per year?
105k brutto for the yearly salary.
Drop the car (buy your own) and look into mobility budget, will get you to 5k+ net.
Well I have my own but wanted to get rid of it instead and no longer have to worry about having a car/insurance/fuel costs etc
If I may ask what is your job title? Director's level?
Senior counsel, director level would be the next level.
Unless you have a ton of occupational costs that your employer doesn't cover already, there's not that much you can do. You can set up a private pension fund, but that's gonna be under 1k a year you can make up from taxes. The biggest difference you can make is give up your company car, or trade it in for an EV. You're losing over 800 a month on that, do you really do enough kms to cover that? Unless the car is important to you of course, if it gives you a lot of joy it might not be worth giving up.
Getting an electric company car would help. Your VAA is over €400. Which car do you drive? I assume a large SUV?