NOS News•today, 03:15
It is almost May and therefore holiday pay payments are coming again for many employed Dutch people. For people with an income that is lower than average, the amount is higher than last year.
Employees with an average income or higher will receive less holiday pay this year. Payroll processor ADP has calculated this.
For example, average income earners receive about 19 euros less net holiday pay. Someone who earns slightly less than that gets considerably more, up to hundreds of euros.
An employee earning three times the average, on the other hand, receives more than 600 euros less. And someone who works part-time will receive an extra 578 euros compared to 2023, according to ADP’s calculations.
The differences have to do with income tax and annual income. It is not easy to explain exactly why one group of workers improves while another does not, says Dik van Leeuwerden, legislation and regulations expert at ADP.
It all has to do with two discounts that apply to income tax: the general tax credit and the employment tax credit. Van Leeuwerden: the amount of the discount depends on your personal situation. Not only how much you earn, but also whether you have a Wajong benefit or AOW, for example.
On the May salary slip, people who are entitled to it will receive at least 8 percent of their gross annual salary extra as holiday pay. That amount is calculated over the past year – from May to May. Tax is withheld from your holiday pay, just like from your wages.
A few bucks more holiday pay
Since the beginning of this year, employers have been legally obliged to pay employees the minimum hourly wage. This starts at around four euros at the age of 15, and rises to more than thirteen euros per hour for those over 21. And the introduction of that hourly wage will affect the holiday pay of people who earn the minimum wage, the payroll 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 holiday pay. The most important explanation for this is that the latter group works more hours over which holiday pay is accrued.
The system surrounding holiday pay is not very transparent. Van Leeuwerden has been in the business for decades and therefore understands the intricacies, but realizes that not everyone understands how it works.
“I think it could be easier, but that initiative must come from the government. You should be able to easily explain how you go from gross to net and how holiday pay works.”
