Holiday Allowance (Vakantiegeld)

Key Takeaways

Every employee in the Netherlands is legally entitled to 8% holiday allowance (vakantiegeld) on top of their gross salary.
It accrues monthly but is typically paid as a lump sum in May or June.
Holiday allowance is fully taxable — it is subject to loonheffing just like regular salary.
When you leave a job, your employer must pay out any accrued but unpaid holiday allowance.
Some employers include holiday allowance in the monthly salary — always check your contract.

What Is Vakantiegeld?

Vakantiegeld (also called vakantietoeslag) is a legally mandated bonus that every Dutch employee receives. It was introduced in 1968 to ensure workers could afford a holiday — and it has remained a cornerstone of Dutch employment ever since.

The legal basis is the Wet minimumloon en minimumvakantiebijslag (Minimum Wage and Minimum Holiday Allowance Act). Regardless of what your contract says, you are entitled to a minimum of 8% of your gross salary as holiday allowance.

Good to know

Holiday allowance is not a "gift" or a "bonus" — it is a legal entitlement. Your employer cannot decide not to pay it. It is part of your total compensation, and failing to pay it is a violation of labor law.

How Is It Calculated?

The Basic Calculation

Holiday allowance = 8% of your gross annual salary (excluding the holiday allowance itself).

Monthly Gross Salary	Annual Gross (12 months)	Holiday Allowance (8%)
€3,000	€36,000	€2,880
€4,000	€48,000	€3,840
€5,000	€60,000	€4,800
€6,000	€72,000	€5,760

What Counts as "Gross Salary" for Vakantiegeld?

The 8% is calculated on your base gross salary. Typically included:

Regular monthly salary
Fixed allowances that are part of your contract
Shift premiums (in many CAOs)

Typically not included:

Overtime pay (unless your CAO specifies otherwise)
One-time bonuses
Profit sharing
Travel allowances
Pension contributions

Tip

Check your CAO (collective labor agreement) or employment contract. Some CAOs calculate holiday allowance on a broader base (including overtime or shift premiums), and some offer more than 8%. The legal 8% is a minimum — your employer can pay more.

The Accrual Period

Holiday allowance is typically calculated over the period June 1 to May 31 (not the calendar year). This is why it is paid in May or June — it represents the full year of accrual.

If you start work on October 1, your first holiday allowance payment (the following May) will cover only 8 months of accrual.

When Is It Paid?

The Standard: May/June Lump Sum

Most employers pay the full accumulated holiday allowance in May, covering the period June through May. Some employers pay in June. The exact month depends on the employer or CAO.

This lump sum is often the largest single payment you receive all year — and many Dutch people use it for actual holidays, home improvements, or paying off debts.

Alternative: Monthly Payment

Some employers offer the option to receive holiday allowance spread across 12 monthly payments instead of a lump sum. This means:

Your monthly gross salary increases by approximately 8%
You do not receive a separate May payment
Your annual net income is the same either way

This arrangement must be agreed upon in writing and is more common with higher salaries (where the 8% on its own would be substantial monthly).

Warning

If you choose monthly payment, be aware that you lose the "forced savings" effect of the lump sum. Many people find the May payment useful precisely because it is a large amount they can use for a specific purpose. With monthly payment, the extra money may simply get absorbed into regular spending.

How Is Vakantiegeld Taxed?

Holiday allowance is taxed as regular employment income. When paid as a lump sum in May, your employer applies the bijzonder tarief (special rate) for one-off payments.

The May Tax Shock

Many employees are disappointed by their net holiday allowance. Here's why:

Example — €4,000 gross monthly salary, €3,840 gross holiday allowance:

The €3,840 is taxed at the special rate, which for a €48,000 annual salary is approximately 40–44%
Net holiday allowance: approximately €2,200–€2,300
That is about 57–60% of the gross amount

The special rate often results in slightly higher withholding than your regular rate. If so, the overpayment is corrected in your annual tax return.

Good to know

The special rate (bijzonder tarief) is designed to approximate your annual marginal tax rate. For many employees, this means the holiday allowance is taxed at a higher rate than regular monthly income — because the lump sum pushes you into the higher tax bracket for that period. Any over-withholding is refunded when you file your tax return.

What Happens When You Leave a Job?

When your employment ends (resignation, dismissal, or contract expiry), your employer must pay out all accrued but unpaid holiday allowance in your final paycheck.

Example — You leave on September 30:

Accrual period: June 1 to September 30 = 4 months
Monthly gross: €4,500
Accrued holiday allowance: €4,500 × 4 × 8% = €1,440 (gross)

This is paid on top of your final salary, any remaining holiday days, and any applicable notice period pay.

Starting a New Job

When you start a new job, your holiday allowance accrual resets. You will receive a prorated payment the following May, covering only the months since you started.

Holiday Allowance and Salary Negotiations

When discussing salary with a Dutch employer, always clarify whether the offered amount includes or excludes holiday allowance:

What They Say	What It Means
"€48,000 per year including holiday allowance"	Monthly gross: €48,000 / 12.96 = €3,704 + €3,556 holiday allowance in May
"€48,000 per year excluding holiday allowance"	Monthly gross: €48,000 / 12 = €4,000 + €3,840 holiday allowance in May. Total annual: €51,840

The difference is significant — nearly €4,000 per year. Always ask: "Is the stated salary inclusive or exclusive of vakantiegeld?"

Tip

In the Netherlands, most salary figures are quoted inclusive of holiday allowance. When a job posting says "€50,000–€60,000," it almost always means including the 8%. But always confirm — some international companies and the public sector may quote differently.

Holiday Allowance vs Holiday Days

These are separate entitlements:

Entitlement	What It Is	Legal Minimum
Vakantiegeld (holiday allowance)	8% salary bonus	8% of gross salary
Vakantiedagen (holiday days)	Paid time off	4 × weekly working hours (e.g., 20 days for full-time)

You receive both. The holiday allowance is a cash payment. Holiday days are paid leave. They are not connected — you receive the 8% regardless of whether you take your holiday days.

Common Mistakes

Thinking the May payment is a "bonus" — It is your legally owed salary, accrued over the year. It is not discretionary and cannot be withheld.
Not checking if salary is inclusive or exclusive — This misunderstanding can lead to a €3,000–5,000 gap between expected and actual annual income.
Forgetting accrued vakantiegeld when leaving a job — Check your final payslip to ensure the accrued amount is included. If it is missing, contact your employer — they are legally required to pay it.
Not understanding the May tax rate — The special withholding rate makes the net amount lower than expected. Any over-withholding is refunded in your annual tax return, but you must file to get it back.
Assuming holiday allowance is calculated on total compensation — It is typically 8% of base salary only. Bonuses, overtime, and allowances are usually excluded (unless your CAO says otherwise).