2019 has plenty of legislative changes in store that may impact global businesses—particularly companies that already or are planning to operate in EU countries. And between the Brexit-strained UK-EU relationship and other EU countries’ economic concerns, employers have much to consider when continuing or modifying their European expansion plans.
Spanish Government Announces Base Social Security Contribution Increase
In August of 2018, the Spanish government established now-defunct maximum monthly social security (base de cotización) contributions. In its place, the government has now set new monthly contribution amounts for both employees and employers.
Beginning January 1, 2019, anyone earning a salary of €4,070.10 or higher will be exempt from paying into Spain’s social security program, including both employees and employers. The maximum contribution base will increase from €3,803.70 to €4,070.10.
Belgian Net Monthly Salaries to Increase in 2019
The Belgian government has enacted a large tax reform, aimed at reducing high-cost labor and reducing its budgetary deficit. Since January 1, 2019, many Belgians have seen a €36 increase in their salaries, a move the Belgian government hopes will make certain jobs more attractive—and increase overall employment. The tax update began in 2016—with positive results in terms of cost of living noted in 2017—and saw a second phase completed in 2018, with the third (and final) phase put into place at the first of this year. On average, net salaries increase by €36, but lower salaries will receive proportionally higher increases.
Non-taxable salary is now the same for all taxpayers, with the total amount increased to €8,680. The larger portion of income between €8,120 and €14,330 will be taxed at 40%, expanding on the already-existing 40% bracket. Workers earning roughly €3,000 will see a €23 increase, €4,500 will go up by €29, and those earning over €5,5000 can expect an additional €30.
Expanding into Europe? Break into Your New Market with an Experienced Partner
Whether you’re expanding into Spain, breaking into Belgium, or considering Berlin, establish your European presence with a partner who’s been there—and in over 180 other countries. Velocity Global’s International PEO (Professional Employer Organization) solution can have you up and running in the European market (or wherever your global expansion takes you) in as few as 48 hours, and saving you up to 60% when compared to entity setup. Ready to move into Europe? Let’s make it happen.