Expat tax regime in Belgium after 2025: the 35% allowance and €70,000 threshold

Belgium’s special tax regime for inbound taxpayers lets an employer pay a recruited or seconded employee from abroad a tax-free allowance for “costs proper to the employer”, on top of the taxable salary. Since the 2025 reform, that allowance can reach 35% of gross pay, with no upper cap, for employees earning at least €70,000 a year.

The regime in its current form has applied since 1 January 2022. Its logic is that an employer recruiting from abroad bears extra costs linked to the move, and the law lets it treat a fixed share of the employee’s pay as reimbursement of those costs, free of income tax, instead of itemising each one.

The allowance is paid by the employer and handled through payroll, so it is the employer’s tool rather than something the employee arranges alone. That is why a company hiring a senior person from abroad needs to know about it before the salary is agreed.

The value depends on the employee’s marginal rate. Income tax for 2026 runs from 25% to 50%, with the top rate applying above €51,070 of taxable income, plus a communal surcharge set by each commune. For a senior hire well into the top band, each euro paid as allowance rather than taxable salary can save up to 50 cents of federal tax before the communal surcharge, which is why the structure of the package matters as much as the headline figure.

The Act of 18 December 2025, published on 30 December 2025, rewrote three of the regime’s numbers and made the changes retroactive to 1 January 2025. A circular of 1 April 2026, number 2026/C/51, confirmed the retroactive application.

• Salary threshold: lowered from €75,000 to €70,000 gross a year. Researchers have no salary threshold.
• Tax-free allowance: raised from 30% to 35% of gross pay.
• Cap: the €90,000 annual ceiling on the allowance has been abolished.

Any guide, calculator or offer template that still uses 30% and €75,000 is out of date. The old figures may still appear in guides and templates written before the reform, so it is worth checking the date of any source before using it in an offer.

Because the reform reaches back to the start of 2025, employers that applied the old figures during 2025 may have room to correct the treatment for that year. Whether a correction is worthwhile depends on the employee’s situation and on what was declared, and it should be reviewed with a tax adviser rather than assumed.

The reform changed the tax rules but not the social security rules, so the two now diverge. For income tax, up to 35% of gross pay can be paid as a tax-free allowance. For social security, only 30% is free of contributions; the extra 5% is tax-free but subject to ONSS (RSZ).

In practice that means the last five percentage points of the allowance carry the usual contributions: 25.00% employer ONSS and 13.07% employee ONSS in 2026, with no ceiling. Payroll has to split the allowance into two parts, and the payslip has to show which part is exempt from what.

The split also matters for budgeting. An employer that expected the whole allowance to be free of contributions, as it was under the 30% rule, will find a slightly higher employer cost on the extra 5%. It is a modest amount on most packages but it should be in the model from the start.

Two numbers therefore have to be tracked for every employee under the regime: the allowance as a share of gross pay for tax purposes, and the same allowance for social security purposes. Getting either wrong produces a payslip that looks plausible but declares the wrong base to the ONSS or to the FPS Finance, and both are reported, the first in the quarterly DmfA and the second through withholding tax and the annual salary slip.

The employee side moves in the same direction. The 13.07% deduction on the extra 5% reduces the net benefit of the higher allowance a little, though the income tax saving is normally much larger than the contribution, because the marginal tax rate on a salary at this level is well above 13.07%.

Take an employee recruited from abroad on €100,000 of gross pay in 2026, and assume the full allowance is used. The figures below show the structure; the final tax depends on the person’s household, commune and other income.

• Tax-free allowance at 35%: up to €35,000.
• Part of it also free of ONSS, at 30%: €30,000.
• Part that is tax-free but subject to ONSS: €5,000.
• Employer ONSS on that €5,000 at 25.00%: €1,250.
• Employee ONSS on the same €5,000 at 13.07%: €653.50.

For a higher earner, the abolished cap matters more. On €300,000 of gross pay, the old rules allowed 30% up to €90,000, which happened to be exactly the cap. Under the new rules, 35% gives an allowance of €105,000, so €15,000 more can be paid free of income tax. Above that salary, the gain from removing the cap grows with every euro of pay.

A salary at the threshold shows the other end of the scale. At €70,000, the allowance can reach €24,500, of which €3,500 is subject to ONSS. Below €70,000, the regime does not apply at all, except for researchers, so the threshold is worth checking against the package before a figure is offered.

These examples assume the allowance is calculated on gross pay as defined for the regime. Whether the year-end bonus, holiday pay and benefits in kind count towards that base should be confirmed for each case, because it changes both the threshold test and the size of the allowance.

How the offer is presented matters as much as the arithmetic. A candidate shown a single gross figure of €100,000 may not realise that €35,000 of it is paid as a tax-free allowance, and will underestimate the net pay. A candidate shown only the net figure may not realise that the allowance depends on the regime continuing to apply. A short table in the offer, with gross salary, allowance, the ONSS treatment of each part and an indicative net, avoids both misunderstandings.

The regime is aimed at people recruited from abroad who meet the salary threshold of €70,000 a year, or who work as researchers, for whom there is no threshold. Further conditions apply, and they should be checked against the current guidance from the FPS Finance before an offer relies on the regime.

That makes the regime part of the hiring process rather than something to sort out after the move. The decision to use it, the split of the package between taxable salary and allowance, and any formalities all need to be planned before the start date, not discovered after the first payslip.

Whatever the structure, the employee should receive a clear written breakdown of taxable salary, allowance and the part subject to ONSS, because the net figure they compare with other offers depends on it.

The regime is also worth raising early with candidates. Senior people moving to Belgium often know that a special regime exists but not that its figures changed in 2025, and a clear explanation can make an offer easier to accept.

For a candidate from outside the EU, the tax regime is the second question; the first is the single permit (permis unique / gecombineerde vergunning), which combines the right to work and to reside. Two decisions sit inside it: the region of the workplace approves the employment, and the federal Immigration Office (DOFI / DVZ) approves the residence.

Each region sets salary floors, and they are measured differently from the €70,000 tax threshold. Walloon floors for 2026 are €53,220 a year on the highly qualified route and €68,815 if the permit sought is a Blue Card. Brussels works in monthly amounts: €3,703.44 on the highly qualified route and €4,748.00 on the Blue Card route. Flanders sets €48,912 a year for highly skilled workers from the age of 30, while its Blue Card floor is €63,586.

A package that meets the tax threshold usually clears these permit floors too, but the two tests are separate and should both be checked. Our guides for US employers building Belgian teams and for UK companies hiring in Belgium cover the permit process in more detail.

Timing links the two as well. Processing times for single permits are not guaranteed, and nobody, an employer of record included, can promise a positive decision, so the start date, and with it the first month in which the allowance is paid, depends on the permit decision. Build that uncertainty into the offer rather than fixing a start date that the permit may not allow.

With Employer of Record Belgium as the employer on the Belgian contract, the regime is applied for and administered through our payroll. You agree the package with the candidate; we structure the payslip so that the allowance, the 30% exempt from ONSS and the extra 5% subject to it are shown correctly.

• Tell us early that the candidate is moving from abroad and may qualify.
• Agree the total package first, then decide how much is paid as the allowance.
• Check the €70,000 threshold, or researcher status, before the offer is signed.
• Allow for employer ONSS on the 5% band in the cost model.

The rest of the employer cost follows the usual Belgian pattern, set out in our guide to employer cost. If you are still comparing providers, ask each one how they handle the regime and whether their templates already use the 2025 figures; what to ask a Belgian EOR before signing has other questions worth asking. The current federal tax bands are on the FPS Finance page on income tax rates.