Holiday Allowance Calculator 2026

What Is Holiday Allowance (Vakantiegeld)?

If you have recently started working in the Netherlands or are considering a job offer here, one of the most pleasant surprises in the Dutch compensation system is holiday allowance, known in Dutch as vakantiegeld or vakantiebijslag. This is a legally mandated annual bonus that every employer must pay to every employee, regardless of industry, contract type, or whether you actually take a vacation.

The holiday allowance equals at least 8% of your gross annual salary. On a salary of €50,000 per year, that means an extra €4,000 gross before taxes. For most employees, this is paid as a single lump sum in May or June, creating what many Dutch workers affectionately call their “vacation money.” It is one of the defining features of Dutch employment law and something that catches many international workers off guard -- in a very good way.

The concept of holiday allowance is rooted in the idea that workers should have extra financial resources to enjoy their vacation time. The Netherlands takes work-life balance seriously, and this mandatory bonus reflects that cultural priority. While many countries leave bonuses entirely to employer discretion, the Netherlands enshrines this 8% minimum in law.

The Legal Basis: Wet Minimumloon en Minimumvakantiebijslag

Holiday allowance is regulated by the Minimum Wage and Minimum Holiday Allowance Act (Wet minimumloon en minimumvakantiebijslag, or WML). This law establishes that every employee is entitled to a minimum of 8% of their gross wages as holiday allowance. Key provisions include:

• The 8% is calculated on the gross salary, including regular bonuses and overtime pay that are part of your standard compensation.
• The allowance accrues over the period from June 1 to May 31 of the following year (the “vakantiegeldjaar”).
• Payment must occur no later than June of each year, unless the employment contract or collective labor agreement (CAO) specifies a different arrangement.
• For employees earning more than three times the minimum wage (approximately €72,000 gross per year in 2026), the 8% minimum can be contractually reduced, though this is rare in practice.
• When employment ends, the accrued but unpaid holiday allowance must be paid as part of the final settlement.

Many collective labor agreements (CAOs) provide even more generous holiday allowance provisions. Some industries pay 8.33% (which equals one month's salary), and a few offer additional holiday bonuses on top of the standard 8%. Always check your specific CAO for details.

When Is Holiday Allowance Paid?

The timing of your holiday allowance payment depends on your employer's policy, but the most common scenarios are:

Annual Lump Sum (Most Common)

The vast majority of Dutch employers pay holiday allowance as a lump sum in May or June. The accrual period typically runs from June 1 to May 31, so you receive approximately 12 months' worth of accrued holiday allowance in a single payment. For someone earning €50,000 gross per year, this means a payment of about €4,000 gross (before tax) in May. After tax, you might receive approximately €2,400–€2,800, depending on your overall income level.

This lump sum creates a distinctive financial rhythm in the Netherlands. Many Dutch people use this money for summer vacations, home improvements, or paying off debts. It is common to hear colleagues discussing their “vakantiegeld” plans in spring. As an expat, this can be a great opportunity to visit family abroad or build up savings.

Monthly Payment

Some employers, particularly international companies and certain sectors, offer the option to include holiday allowance in your monthly salary. Instead of receiving one large annual payment, you receive 1/12th of the holiday allowance each month (effectively increasing your monthly gross by about 0.67%). This spreads the income evenly but means you do not get the May bonus.

There are pros and cons to each approach. Monthly payment provides a more stable cash flow and can be easier for budgeting. However, the lump sum creates a natural “forced savings” effect that many people appreciate. From a tax perspective, the annual amount is identical; only the timing of tax withholding differs.

How Is Holiday Allowance Taxed?

This is one of the aspects that most surprises expats. Holiday allowance is fully taxable. When paid as a lump sum, it is treated as a “special payment” (bijzondere beloning) for payroll tax purposes. This means the tax rate applied might be higher than what you see on your regular monthly payslip. Here is why:

Your employer uses wage tax tables to determine the withholding on regular monthly salary. These tables assume a smooth, even distribution of income throughout the year. When a lump sum like holiday allowance is added, the tax system applies the “special rate” (bijzonder tarief) to the extra amount. This rate is based on your estimated annual income and corresponds to the marginal bracket rate that applies to your income at that level.

For example, if your regular salary places you in the 37.56% bracket, the special rate on your holiday allowance payment will likely be around 37.56% or higher. This can feel like a shock when you expected 8% of your salary but only receive about 5% after tax. However, it is important to understand that this is not extra taxation -- it is simply the correct amount of tax being withheld at the right time. Over the full year, the total tax paid on your income (including holiday allowance) is the same whether it is paid monthly or as a lump sum.

Note: tax amounts are approximations. The actual amount depends on your complete annual income, tax credits, and personal circumstances.

Holiday Allowance vs. Other Countries

The Dutch holiday allowance system is relatively unique in Europe and even more unusual from a global perspective. Here is how it compares:

The Netherlands strikes a middle ground: the 8% rate is generous without being as high as Spain's two extra months. What makes the Dutch system distinctive is its simplicity and universality. Every employee receives it, regardless of industry or seniority, making it a reliable part of financial planning.

How Holiday Allowance Affects Your Total Compensation

Understanding the total compensation impact of holiday allowance is essential when comparing Dutch job offers with positions in other countries. Consider this example:

An employer offers you a gross annual salary of €55,000. In many countries, this would be your total guaranteed cash compensation. In the Netherlands, however, your total guaranteed cash compensation is actually €59,400 (the €55,000 salary plus €4,400 in holiday allowance). If the employer also offers a 13th month, your total becomes €64,400 -- more than 17% above the stated base salary.

This distinction is critical when comparing offers. A Dutch salary of €55,000 is not directly comparable to a €55,000 salary in the UK or US, where no additional statutory bonus exists. When negotiating, always ask whether the quoted salary is including or excluding holiday allowance. Most Dutch employers quote salaries excluding the 8%, but some (especially international firms) may include it.

Holiday Allowance During Special Circumstances

Several situations affect how holiday allowance is calculated or paid:

• Starting mid-year: If you begin working in September, you will accrue holiday allowance from September through May. In your first May payout, you receive only the months you actually worked, not a full year's worth.
• Leaving your job: Accrued holiday allowance is paid out in your final settlement. If you resign in January and the last payout was in May, you receive 8% of the salary earned from the previous June through January.
• Sick leave: During the first two years of illness, your employer must continue paying at least 70% of your salary (and 100% in the first year under most CAOs). Holiday allowance continues to accrue during sick leave, calculated on the salary actually received.
• Maternity/paternity leave: During maternity leave (16 weeks) and paternity leave (up to 9 weeks at 70% pay), holiday allowance continues to accrue normally.
• Temporary contracts: Employees on fixed-term contracts have the same right to holiday allowance as permanent employees. The 8% accrues from day one.

Practical Tips for Expats

Here are actionable suggestions for international workers to make the most of the Dutch holiday allowance system:

1. Budget as if you have 12 months of income, not 13. If you receive the lump sum in May, treat it as a bonus rather than income you rely on monthly. This prevents cash flow problems during the other 11 months.
2. Consider monthly payment if you prefer stability. If your employer offers the choice, monthly inclusion of holiday allowance can simplify your budgeting, especially during your first year in the Netherlands when unexpected expenses are common.
3. Check your employment contract carefully. The contract should clearly state whether holiday allowance is included in or excluded from your quoted salary. This can represent an 8% difference in total compensation.
4. Use it strategically for savings or investments. Many expats use the May lump sum to make a mortgage prepayment (extra aflossing), contribute to savings, or invest. Since you have survived 11 months without it, the entire amount can go toward financial goals.
5. Remember it when filing your tax return. Holiday allowance is already included in your annual income as reported by your employer. You do not need to report it separately, but be aware that the total annual income shown on your jaaropgave (annual income statement) includes it.

Calculating Holiday Allowance: A Worked Example

Let us walk through a complete example to illustrate how holiday allowance works in practice:

Scenario: Sarah is a software engineer from Canada who started working in Amsterdam on September 1, 2025, with a gross annual salary of €65,000.

• Monthly gross salary: €65,000 / 12 = €5,417
• Monthly holiday allowance accrual: €5,417 × 8% = €433
• Accrual period for first payout: September through May = 9 months
• Holiday allowance paid in May: 9 × €433 = €3,900 gross
• Estimated tax on the lump sum: ~€1,465 (at the special rate)
• Net holiday allowance received: ~€2,435

In Sarah's second year, she would receive a full 12 months of accrual: 12 × €433 = €5,200 gross, approximately €3,250 net.

Frequently Asked Questions

Sources and Further Reading

The information on this page is based on:

• Rijksoverheid: Minimum Wage and Holiday Allowance
• Belastingdienst (Dutch Tax Authority)
• Government.nl: Minimum Wage

For questions specific to your employment contract or collective labor agreement, consult your employer's HR department or a Dutch employment lawyer.