As the summer approaches, employees in the Netherlands are gearing up for the annual anticipation of vakantiegeld, or holiday pay. However, the 2025 payouts are shaping up to be a mixed bag, with some workers seeing increases while others face disappointments.
According to calculations by ADP, a payroll processing company, a small group of employees will receive more vakantiegeld this year compared to 2024. Specifically, those earning between 2,000 and 2,750 euros gross per month can expect a higher amount than last year. For instance, full-time workers earning the minimum wage, approximately 2,202 euros gross for a 36-hour workweek, will enjoy a significant increase of 236 euros in their vakantiegeld.
"Full-timers who earn the minimum wage can expect a windfall: their vakantiegeld will increase by 236 euros this year," ADP noted. Conversely, those with a gross income of 3,588 euros per month will see their vakantiegeld drop by 8 euros, while employees making around 5,382 euros will experience an 11-euro decrease. For those at 7,176 euros or more, the vakantiegeld remains unchanged.
Part-time workers, particularly those earning lower wages, are feeling the pinch. For instance, part-timers with a gross monthly salary of 1,000 euros will see their net vakantiegeld plummet to 693 euros, which is 213 euros less than last year. This is due to new tax regulations that have already led to reduced net salaries earlier in the year. The situation is similarly bleak for part-timers earning between 1,000 and 2,000 euros gross per month, who will also receive slightly less.
Labor economist Ronald Dekker from TNO commented, "The loss of vakantiegeld for part-timers is serious. This group does not earn much already. Then a difference of tens or hundreds of euros counts heavily." He further noted that while not every part-timer is financially dependent on the extra income, the impact of reduced vakantiegeld can be significant, especially with rising costs of living.
The new tax rules, which came into effect at the beginning of 2025, have caused confusion among employees regarding their vakantiegeld. The way the government applies tax credits and corrections can lead to varying amounts of tax owed on holiday pay. For example, those earning between modal and one-and-a-half times the modal income pay 50.33 percent tax on their vakantiegeld, while those earning between two and two-and-a-half times modal see that rate increase to 56.01 percent. Interestingly, for individuals earning over 139,405 euros per year, the tax rate drops back to 49.50 percent, meaning they do not qualify for tax credits.
Despite the disappointing news for many part-time workers, some employees will see a boost in their vakantiegeld. Full-time employees earning between 2,000 and 2,750 euros gross per month will receive more this year, and part-timers with salaries starting at 2,000 euros will also benefit slightly. However, the advantages begin to diminish for those earning around 3,000 euros or more.
Employers are legally obligated to pay vakantiegeld, which is at least 8% of the gross annual salary, as per the Wet Minimumloon en Minimumvakantiebijslag (WMM). Most employers disburse this holiday pay in May or June, with a legal deadline of July 1 for payment. Some companies opt to spread the payments over the year, but this must be documented and clearly indicated on pay slips.
As part of practical advice for employers, it is crucial to calculate vakantiegeld accurately, including regular wages, bonuses, and overtime. Additionally, employers should communicate clearly about the tax implications, as vakantiegeld is taxed more heavily than regular income, which can affect the net amount employees receive.
In light of the varied impacts of the 2025 vakantiegeld changes, many employees are left wondering what the future holds. While some will enjoy increased payouts, others will struggle with the financial consequences of reduced holiday pay. The overall sentiment is one of disappointment, particularly among part-time workers who already face economic challenges.
In conclusion, the upcoming summer will bring mixed feelings for Dutch employees regarding their vakantiegeld. While full-timers at minimum wage will see increases, part-timers and those with lower incomes will feel the impact of new tax rules, leading to lower payouts than expected. As the government continues to adjust fiscal policies, the hope is that future changes will consider the financial realities facing all workers.
