Calculating your taxable net income is a crucial step in preparing your tax return. Understanding the intricacies of this calculation will allow you to optimize your tax situation and avoid costly mistakes. In this text, we will dissect the key elements of your taxable net income and guide you through the steps to determine it accurately.
What is your taxable net income?
Your taxable net income represents the fraction of your remuneration subject to income tax. It differs from the net salary to be paid that you receive in your bank account. This distinction is essential to understanding your tax situation.
Your taxable net income includes:
- Your basic salary
- Bonuses and bonuses
- Certain benefits in kind
- Non-deductible social security contributions
However, it excludes certain elements such as deductible social security contributions and part of the CSG. This amount is used as the basis for calculating your income tax and generally appears on your pay slip under the name “taxable accumulation” or “taxable net”.
It is vital to note that since 2019, pay slips mention the net to pay before tax and the net to pay after tax, the latter taking into account the withholding tax.
How to calculate the taxable net salary from the gross salary?
Calculating the taxable net salary from the gross salary involves several steps and requires taking into account various elements. Here is the general formula:
Taxable net salary = Gross salary + Other remuneration elements – Deductible social security contributions – Deductible CSG (6.80%) + Non-deductible employer contributions
Let’s detail each component:
- Gross salary : This is the starting point, including your base salary and any overtime.
- Other remuneration elements : Bonuses, commissions, and benefits in kind (company vehicle, company housing).
- Deductible social contributions : They include contributions for social security, retirement (basic and supplementary), welfare, and the employee portion of supplementary health insurance.
- Deductible CSG : 6.80% of your gross remuneration.
- Non-deductible employer contributions : Certain employer contributions are reintegrated into the taxable net.
It is vital to note that the tax deductibility limits for supplementary insurance and supplementary pensions are set at specific percentages of the Annual Social Security Ceiling (PASS) and remuneration.
| Element | Deductible | Not deductible |
|---|---|---|
| Social contributions | Yes | No |
| CSG | 6.80% | 2.40% |
| CRDS | No | 0.50% |
| Supplementary health | Employee share | Employer share |
From net payable to net taxable: the key steps
If you start from the net salary to be paid, calculating the taxable net requires the addition of certain elements and the subtraction of others. Here is the method to follow:
Net taxable salary = Net salary to pay + non-deductible CSG (2.4%) + CRDS (0.5%) + Supplementary health insurance (employer share) + Additional non-deductible retirement and welfare contributions + Benefits in kind – Exempt remuneration
Let’s explain these additions and subtractions:
- Non-deductible CSG and CRDS : These contributions are reinstated because they are not deductible from income tax.
- Supplementary health insurance (employer share) : The employer’s participation in your mutual insurance is considered a taxable benefit.
- Additional non-deductible contributions : This concerns the portion of contributions exceeding the deductibility ceilings.
- Benefits in kind : The value of benefits such as a vehicle or company accommodation is added to the taxable net.
- Exempt remuneration : Certain elements such as overtime (within the ceilings) or certain compensation must be subtracted.
It is important to emphasize that the net taxable is generally used as a basis for calculating the withholding tax, with a few exceptions such as daily social security allowances (IJSS) or short fixed-term contracts.
Tax optimization: professional expenses and exempt income
Once the taxable net has been calculated, there are legal means to optimize your tax situation. Two aspects deserve particular attention:
1. Professional expenses
Employees have the choice between two options for deducting professional expenses:
- The standard deduction of 10% : This is the default option, automatically applied by the tax administration.
- Actual costs : If your business expenses exceed 10% of your income, this option may be advantageous.
Deductible professional expenses include:
- Home-work transportation costs
- Meals taken at the workplace
- Professional training costs
- Purchasing professional equipment
- Costs related to teleworking
2. Exempt income
Certain incomes benefit from a partial or total tax exemption. For example :
- Apprentices: exemption of up to €18,760 in 2021
- Trainees: exemption up to the annual minimum wage
- Certain bonuses and specific allowances
It is important to clearly identify this exempt income so as not to include it by mistake in your net taxable amount.
Finally, calculating the taxable net is a complex but essential step in your tax return. A good understanding of this calculation will allow you to optimize your tax situation legally. Do not hesitate to consult an accountant or tax advisor to ensure you benefit from all the deductions to which you are entitled.