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Vakantiegeld (holiday allowance in the Netherlands)

autor: Maciej Wawrzyniak18 August 2023
Vakantiegeld (holiday allowance in the Netherlands)

 

Did you know that every employee in the Netherlands is entitled to holiday pay (Vakatiengeld)? You can get holiday pay - find out if you need to claim it and how much. Read on - we will try to tell you everything about holiday pay.

Vakantiegeld - what is it?

Vakatiengeld, also known as holiday pay or holiday compensation in the Netherlands, is an additional payment that every employer is obliged to pay. It amounts to 8% of gross salary and is usually paid in full at the end of May or beginning of June. It is calculated on the basis of earnings from 1 June of the previous year to 1 June of the current year.

This applies to both permanent and temporary workers employed through employment agencies. The money we receive is intended to cover the cost of our holiday pay; we are not actually obliged to use it for this purpose.

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Holiday pay in the Netherlands - how much does it cost?

You already know that you are entitled to Vakantiegeld when you work in the Netherlands, now you are probably wondering how much you will get for it. As mentioned above, it is 8% of your gross salary for one year of work. However, this does not tell you exactly how much you can expect to receive. So how is holiday pay calculated in the Netherlands?

The gross amount should not be a problem - take your monthly salary for June last year and multiply it by 12 months (if it has not changed), and then deduct 8% of the resulting amount.

Example

You earn €1,500 per month in the Netherlands - €1,500 × 12 = €18,000.

8% of this amount is €1,440, and this is the total amount of holiday pay you will receive after taxes.

The situation becomes more complicated when it comes to calculating the amount you receive, as the complex Dutch tax system comes into play. In fact, there are several factors to consider.

Dutch holiday allowance 2022 and tax rate

In the Netherlands, you can also benefit from tax credits: the general tax credit and the employment tax credit. They are paid monthly on a certain income and allow you to reduce your tax. Since holiday pay is added to your basic salary, you may receive a tax deduction at the end of the year. To prevent this, an additional estimated rate is added to your holiday pay.

Holiday pay is added to your salary and can therefore increase our tax rate - currently there are two in the Dutch system. The first applies to income not exceeding €68,508 per year. If we exceed this threshold, the amount of the excess is already taxed at the higher rate of 49.50 per cent.

Holiday pay in the Netherlands - when you get it

As these are holiday allowances and are intended to be used during the holiday, they are usually paid by the employer just before the holiday. As such, you will most likely receive your holiday entitlement at the end of May or the beginning of June. If it is stipulated in your contract, it may be added to your hourly rate and paid out of your regular salary.

If your relationship with your employer ends, your accumulated Vakantiegeld funds will be paidto you with your last salary. Regardless of the date, this amount should be shown as a separate line on your payslip.

If you are working in the Netherlands through an employment agency, be prepared to pay your holiday pay proportionally to each salary. This is usually due to the fact that seasonal workers rarely work for the same employer for at least a year, and the system of paying these benefits on a regular basis is more convenient for the employer. Often, the employee himself benefits from this, as his weekly salary is several euros higher.

How many days of holiday in the Netherlands?

Every full-time employee is entitled to at least 20 days of holiday. However, depending on the sector and the provisions of the agreement between the employer and the trade unions (CAO), there are some differences, so in some companies this period can be 24 or 25 days. Other provisions apply to employees who work under an employment contract. In this case, sixteen hours of leave are granted for each full month of work. Thus, if you work full-time, you can take 25 days of leave per year.

Regardless of the number of vacation days granted, they cannot be exchanged for a higher salary at the end of the year. Unused vacation days in the Netherlands are cancelled, so it is advisable to plan your vacation wisely so as not to lose your earned hours.

The employer is obliged to provide each employee with a total of three weeks of holiday or three separate weeks of holiday.

Pay the Vakantiegeld - Belastingdienst is waiting for your tax return

In addition to paying holiday pay, everyone working in the Netherlands has obligations to the tax authorities. At the end of the tax year, you need to prove your income by submitting a tax return to the Belastingdienst. The fastest way to do this is to use the Dutch tax return app Aangifte. This innovative tool will help you organise all the formalities and choose the right form of payment. Use our services to get a great tax refund in the Netherlands and enjoy an even better holiday.

Curious about the size of your tax refund from the Netherlands? Consider using our Dutch tax refund calculator 2023/2024 online! It's a tool that employs cutting-edge algorithms and up-to-date tax legislation to provide a precise estimation of the refund you might receive from the Belastingdienst. With our app, you will handle your tax affairs very quickly and efficiently without leaving your home. We focus on your convenience and efficiency!