Dutch Workers to Receive Varying Rates of Holiday Pay in 2024: What You Need to Know

It’s almost May so holiday pay is coming again for many working Dutch people. For people with an income that is lower than the average, the amount is higher than last year.

Workers with average or higher incomes will receive less holiday pay this year. The ADP payroll processor has calculated this.

For example, average earners will receive around 19 euros less net holiday pay. Someone who earns a little less than that gets a lot more, up to hundreds of euros.

On the other hand, a worker who earns three times the average gets more than 600 euros less. And someone who works part-time will receive 578 euros more compared to 2023, according to ADP calculations.

The differences must be related to income tax and annual income. It is not easy to explain why one group of workers is improving and another group is not, says Dik van Leeuwerden, an expert in legislation and regulations at ADP.

It all relates to two allowances that apply to income tax: the general tax credit and the income tax credit. Van Leeuwerden: the amount of the discount depends on your personal situation. Not only what you earn, but also whether you have Wajong benefit or AOW, for example.

On the May payslip, people who are entitled to at least 8 per cent of their gross annual salary will receive extra holiday pay. That amount is calculated over the past year – from May to May. Tax is withheld from your holiday pay, just like your salary.

From the start of this year, employers are legally obliged to pay workers the minimum hourly wage. This starts at around four euros at the age of 15, and rises to over thirteen euros an hour for those over 21. And including the hourly wage will affect pay. ​holidays of people who earn the minimum wage, the payment processor sees.

For example, someone who works 36 hours a week gets 15 euros less, but people who work more hours get up to a few tens of euros more in holiday pay . The most important explanation for this is that the latter group works more hours over which holiday pay is accrued.

The holiday pay system is not very transparent. Van Leeuwerden has been in the business for decades so he understands the complexities, but understands that not everyone understands how it works.

“I think it could be easier, but that initiative has to come from the government. You should be able to easily explain how to go from net to net and how holiday pay is working.”