The term ‘holiday pay’ covers two meanings: the ‘single’ holiday pay is in fact nothing more than the continued payment of your wages during holidays, and the ‘double’ holiday pay, a bonus that the employee receives, officially to cover holiday expenses.
Who gets holiday pay?
Every employee receives holiday pay for the holiday days he is entitled to this year and has worked for in the past year. If you were working full-time as an employee in 2023 in a five-day system, you are entitled to 20 statutory vacation days in 2024 and you will therefore be paid for those 20 days. If you worked part-time, you get half.
Because holiday pay is calculated on the basis of the previous year’s performance, recent graduates only receive holiday pay in proportion to the number of months worked. If they only started working this year, they won’t see a cent. Although there is room for improvement with the ‘paid youth holiday’ system.
Is there a difference between blue-collar and white-collar workers?
“Workers receive their holiday pay through a holiday fund into which their employer pays contributions. They receive their single and double holiday pay at once, but are not paid if they actually take a holiday,” says Marijke Beelen, expert at Acerta.
Employees receive their holiday pay from their employer. “They only receive holiday pay when they actually take holiday: so it is as if their normal salary continues during the holiday. In addition, they receive an extra wage, or approximately, as double holiday pay.”
Workers receive their single and double holiday pay at once, but are not paid if they actually take holiday. Employees are paid when they actually take vacation and receive extra pay as double vacation pay
When is the holiday pay paid?
“The payment of holiday pay for workers started on May 2 and that process should be completed by the end of June,” says Marijke Beelen. “The time for payment of double holiday pay for white-collar workers depends from company to company. But in most cases this happens in May and June.”
How is it calculated?
For an employee, holiday pay is the only salary that continues to be paid. “The double holiday pay amounts to 92 percent of the gross salary for the month in which the calculation takes place, including any fixed premiums for services and fixed amounts for benefits in kind. That amount is multiplied by a fraction, with 12 as the denominator – the number of months in a year – and the numerator the number of months actually performed last year.”
“Anyone who is already looking forward to an extra monthly wage will be disappointed,” says Acerta. — © Shutterstock
For the workers it is a bit more complicated. “They receive 15.38 percent of the previous year’s salary. This will first be increased by 8 percent. A solidarity contribution of 1 percent is levied on this. After that deduction, 6.8 percent is still obtained from that 15.38 percent. That’s double the holiday pay. That part, and only that, is subject to a deduction of 13.07 percent. After these two social security contributions, the balance is subject to withholding tax,” says the expert.
What is left net?
“Anyone who is already looking forward to an extra monthly wage will be disappointed,” says Acerta. Holiday pay is indeed taxed even more heavily than the gross salary. Now take a married or legally cohabiting employee: from 3,000 euros gross salary he has 2,153 euros net left over, and from 3,000 euros gross holiday pay only 1,471 euros net is left over. Of 5,000 euros gross, 3,011 euros (salary) and 2,126 euros (holiday pay) remain respectively.
There is even less left for workers: they have only 641 euros in holiday pay left over from 5,000 euros gross, and barely 385 euros from 3,000 euros gross.
Can I have the holiday pay paid out in a ‘tax-friendly’ way?
Unlike the regular salary, for which there is an option in many companies to exchange wages for, say, a bicycle or mobile phone via a flex or cafeteria plan, this ticket does not apply to holiday pay. “Workers receive holiday pay from a fund and no deviation is possible. White-collar workers are entitled to 92 percent of their monthly wages and this may not be reduced in any way,” emphasizes Marijke Beelen.
Do illness or unemployment have an impact?
Sick days constitute an equivalent period: you also accrue holiday rights in the event of illness. “In case of unemployment, you must make a distinction between full and temporary unemployment,” says the Acerta expert. “If you are completely unemployed, you no longer have a job and you do not build up any holiday entitlements. In case of temporary unemployment you still have an employment contract, but it has been suspended. Temporary unemployment due to bad weather – such as construction – or a technical malfunction does not give rise to the accrual of holiday rights, but temporary unemployment for economic reasons does.”
Do I have to spend holiday pay on vacation?
You don’t necessarily have to spend your holiday money on holiday. There are other ways to spend this extra wisely. Nibud, a Dutch independent foundation that advises families on financial matters, lists a few.
Are you not going on holiday or only later? Then put the money aside, for example in a savings account. This makes it less easy to spend it on other things.
Check whether you have sufficient financial buffer to pay unexpected costs (illness, broken car) and supplement it if necessary. Experts recommend three to six net monthly wages.
Are you expecting a significant expense, such as maintenance of the home? Then it may be smart to put the money aside for this.
Or invest it in the energy efficiency of your home, such as insulation or solar panels. This will reduce the energy bill in the long term.
Do you have debts or payment arrears? Then use (part of) the money to get rid of it.
Do you have a variable income (freelancer, temporary worker, etc.)? Then it may be wise to set aside the holiday pay for months with less income.
Tags: Yay holiday pay coming extra monthly wage disappointed
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