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What Is Holiday Allowance?
Holiday allowance, known in Dutch as vakantiegeld, is a statutory payment equal to at least 8% of an employee's gross annual salary. Established under the Minimum Wage and Minimum Holiday Allowance Act, it is a mandatory part of Dutch employment compensation, separate from base salary and paid vacation days.
Holiday allowance is not a discretionary bonus. It's a legal entitlement that applies to nearly every employee in the Netherlands, including part-time and zero-hour workers.
Holiday Allowance at a Glance
| Attribute | Description |
|---|---|
| Statutory Minimum | 8% of gross annual salary |
| Legal Basis | Wet minimumloon en minimumvakantiebijslag |
| Payment Timing | Usually paid as a lump sum in May or June |
| Applies To | Full-time, part-time, and zero-hour employees |
| CAO Variations | Some CAOs set a higher rate, such as 8.33% |
| Tax Treatment | Taxed at a special withholding rate (bijzonder tarief) |
Why Does It Matter?
Holiday allowance functions as a near-mandatory 13th-month payment in Dutch payroll and is a cost that employers must plan for annually. Getting the calculation wrong, such as excluding bonuses or overtime that should count toward the base, is a common and costly employer error.
When Is It Used?
Holiday allowance is relevant whenever a company:
- Runs payroll for employees in the Netherlands.
- Structures a salary offer and needs to disclose whether the figure includes or excludes holiday allowance.
- Calculates final pay upon an employee's termination, since accrued holiday allowance must be settled immediately.
A French logistics company hires a Dutch operations coordinator at €3,500 gross per month. In addition to the monthly salary, the company must set aside 8% annually, paid out as a lump sum of roughly €3,360 in May, on top of the employee's regular pay.
Common Misconceptions
No. It is a fixed statutory entitlement, unrelated to performance or company results.
No. Part-time and zero-hour contract workers are also entitled to holiday allowance, calculated proportionally on hours actually worked.
No. Unless explicitly and separately agreed in writing, holiday allowance is paid on top of the stated salary.
No. Any accrued but unpaid holiday allowance must be paid out with the employee's final salary.
Holiday allowance is a mandatory Dutch payment of at least 8% of gross annual salary, paid separately from base pay. Employers hiring in the Netherlands need to budget for it explicitly and clarify in offers whether stated salaries include or exclude this amount.
Budgeting Dutch holiday allowance?
We'll make sure your salary offers and payroll correctly account for the 8% holiday allowance.
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