Net salary vs allowance

Hi all,

my current employer sending my salary in two parts , net salary ( gross minus the taxes  ) and allowance , my question is does the allowance Subject to taxes  , if so then how much and how this should be deducted ? because my employer telling me that is tax exempted?

thanks

Hello,

It depends on what premiums / benefits / allowances you are talking about. Because they can be taxed in different ways depending on how they are used.

https://finances.belgium.be/fr/entrepri … es_fiscaux

phipiemar :

Hello,

It depends on what premiums / benefits / allowances you are talking about. Because they can be taxed in different ways depending on how they are used.

https://finances.belgium.be/fr/entrepri … es_fiscaux

Hi Phipiemar

thanks for your feedback,

Actually the allowance and benefit i mean are like ( laptop expenses , Car expenses , Accommodation expenses .... )

are those subjected to taxes and how to calculate this.

thanks

Hi,

Everything is cleared in my hyperlink. It is in french because english is not recognized as official language in Belgium.

Use of the company car for private purposes
https://finances.belgium.be/sites/defau … 190611.pdf

Use for personal purposes of a PC or a free internet connection, accomodations, ...
https://finances.belgium.be/fr/entrepri … _avantages

Hi Msanad,

There are many types of allowances offered in Belgium. few commonly observed practices are

Representation allowances - they are net and not taxed

Car allowances - taxed. But they are under different tax brackets. If you take company car , then tax applicable on benefits in kind

Laptop - there will be a small deduction in your net as it is benefits in kind

Mobile - same as laptop

pravinkumr84 :

Hi Msanad,

There are many types of allowances offered in Belgium. few commonly observed practices are

Representation allowances - they are net and not taxed

Car allowances - taxed. But they are under different tax brackets. If you take company car , then tax applicable on benefits in kind

Laptop - there will be a small deduction in your net as it is benefits in kind

Mobile - same as laptop

Thanks Pravinkumar ,

I wounder if there is any different if i'm using company car or get allowance to rent car , what if I don't use this allowance to rent a car ?

thanks

Using company car - the benefits in kind are calculated using complex ways. Some information in here.. https://news.pwc.be/company-car-benefit … lculation/
Over that BIK, the tax rate is applied

Using car allowance - Mostly, this is included in your gross and typical tax rates applies. So, your tax rate could be higher compared to BIK. (again, this varies b/w companies and very complex calculations. No one can say 100%. )

i think it is personal preference to use car allowance to rent a car or not. I know few not using. No compulsion.

pravinkumr84 :

Using company car - the benefits in kind are calculated using complex ways. Some information in here.. https://news.pwc.be/company-car-benefit … lculation/
Over that BIK, the tax rate is applied

Using car allowance - Mostly, this is included in your gross and typical tax rates applies. So, your tax rate could be higher compared to BIK. (again, this varies b/w companies and very complex calculations. No one can say 100%. )

i think it is personal preference to use car allowance to rent a car or not. I know few not using. No compulsion.

Actually the point in the car allowance and other is my company is not including this into the gross salary and they send it into my bank account separately , and not even mentioned into the pay slip , does this will make any issue for me in term of tax declaration later? , do I have to pay any taxes for this or its tax exempted ?

It is better to check with the accounting department of the employer. If ever the company or you undergo an audit by the Belgian finance departments, and they see that there are allowances/benefits in nature that have not been declared, it will hurt a lot ...

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