As May approaches, many employees in the Netherlands are bracing for a disappointing surprise when it comes to their vacation pay. The latest calculations from payroll processor ADP reveal that numerous workers will receive less vacation pay this year compared to 2024, with only a select group seeing an increase.
For part-time workers earning around 1000 euros gross per month, the news is particularly grim. They will receive 693 euros in net vacation pay, which is a staggering 213 euros less than what they received last year. This reduction highlights the ongoing struggles faced by those in low-income brackets, as noted by Dik van Leeuwerden, an expert in legislation and regulations at ADP. "This unexpected effect of the tax rules has been observed earlier in payslips and now also affects vacation pay," he explained. "These are individuals who often have to work part-time due to health issues. They are the lowest earners who will see a decline this year."
In contrast, employees earning between 2000 and 2750 euros gross per month will see a rise in their vacation pay. For full-time minimum wage workers, this translates to an extra 188 euros in vacation pay, while those working 36 hours per week at the minimum wage of 2202 euros will receive 236 euros more. With a 38-hour work week, the increase is 146 euros, and those working 40 hours at the minimum wage will see an increase of 188 euros.
Meanwhile, workers earning above this threshold face a mixed bag. Those with a gross monthly income of 3000 euros will receive 12 euros less in vacation pay this year, while those earning 1.5 times the modal income, which is 5382 euros, will see a decrease of 11 euros. Individuals earning the modal income of 3588 euros will also receive 8 euros less than last year. Notably, higher earners, specifically those making two times the modal income or more, will see no change in their vacation pay, receiving the same amount as in 2024.
The stark contrast in vacation pay highlights the impact of new tax regulations introduced for 2025. The government has implemented several changes intended to benefit middle-income workers, but these adjustments have inadvertently hit the lowest earners the hardest. The introduction of a new tax bracket and changes to the labor tax credit have left many part-time workers with less take-home pay.
As the government aims to lift the fortunes of working middle-class families, the implications for low-income earners are severe. The general tax credit will decrease from 3362 euros in 2024 to 3068 euros in 2025, and the first tax bracket's rate has been reduced from 36.97% to 35.82% for incomes up to 38,441 euros. However, a second bracket with a rate of 37.48% has been added for incomes between 38,441 euros and 76,817 euros, while the top rate remains at 49.5% for those earning over 76,817 euros.
The changes are designed to provide relief for middle-income earners, but they have also resulted in a painful reality for the most vulnerable groups. Part-time workers earning less than 1000 euros gross per month will see their vacation pay remain the same as last year, but those earning slightly more will experience a reduction in their benefits. "Despite a reduction in the tax rate in the first bracket, this group receives less labor discount and therefore ends up worse off overall," van Leeuwerden explained.
For many low-income workers, vacation pay is not just a bonus; it serves as a crucial financial buffer against unexpected expenses. With the reduction in vacation pay, these individuals may find themselves in an even tighter financial situation. This highlights the need for vulnerable groups to explore available allowances and benefits they may qualify for, especially as they navigate the challenges posed by rising living costs.
As the vacation pay is traditionally disbursed in May, employees are left wondering how to manage their finances with less in their accounts. Workers who earn 2000 euros gross monthly will receive approximately 145 euros more in vacation pay, but this increase is overshadowed by the fact that their net salary is already lower by 32 euros per month compared to last year. This situation illustrates the broader patterns of shifting purchasing power that have emerged over recent years.
In summary, the vacation pay landscape for 2025 reveals a clear divide between winners and losers in the tax system. While middle-income earners may see an improvement, low-income workers continue to struggle, bearing the brunt of the financial changes. As they prepare for the upcoming vacation pay disbursement, many will have to adjust their expectations and spending habits, as the financial challenges continue to mount.
As the government looks to support working families, it remains crucial to ensure that the lowest earners are not left behind. The disparities in vacation pay serve as a reminder of the ongoing economic pressures faced by many, particularly those who are already vulnerable. With the right measures in place, it is possible to create a more equitable system that benefits all workers, regardless of their income level.
