Withholding Tax

In Belgium, taxes are automatically deducted at the source, meaning they are taken directly from your salary. This deduction is known as the "professional withholding tax." It acts as an advance payment on income tax that all workers are required to pay. Each pay period, a percentage of your taxable gross salary (which is your gross salary minus social security contributions) is withheld by your employer and included in your tax return.

At Amplo, freelancers, artists, and temporary workers have the flexibility to choose this withholding percentage themselves. The minimum rate is 11.11%, while the maximum that Amplo can apply is 30%.

How to Choose the Right Withholding Percentage?

The professional withholding tax is closely tied to your personal tax situation, with your salary playing a crucial role. The income tax you may owe increases with the tax bracket that corresponds to your taxable salary. Therefore, the higher your taxable income, the more advisable it is to set your withholding rate at a higher level. Factors such as your marital status, family composition, and other familial obligations are also considered. Any potential deductions from your taxable income (like mortgage interest deductions) are accounted for in your annual tax return, but they do not affect your withholding tax.

Every individual’s situation is unique. However, it's important to note that opting for a lower withholding tax percentage may result in a higher net salary, which might seem attractive at first. Still, this could lead to an unpleasant surprise when it comes time to calculate your income tax, potentially resulting in a tax bill for the difference.

For this reason, Amplo generally recommends not setting a withholding percentage that is too low. Our standard recommendation is 18%. You can also choose from other options: 11.11%, 22.8%, or 30%. Don’t worry; an Amplo consultant will be more than happy to assist you in estimating an appropriate percentage. Additionally, consider your income from sources outside of Amplo, as that will also play a role in your annual tax calculation.

There’s also a final option available, referred to as "legal scales," which entails a separate estimate of the amount you should theoretically pay on each statement. In this calculation, your salary is projected as if you were working a full year at that rate. The corresponding percentage is then applied. This method is particularly useful if you work full-time or if your income is distributed consistently and regularly throughout the year.

Feel free to discuss your options with your Amplo consultant!