Vakantiegeld, formally vakantiebijslag, is a statutory holiday allowance paid to almost every employee in the Netherlands. The legal minimum is 8% of gross annual salary, and it is normally paid as a single amount in May, occasionally in June.
It is not a bonus and it is not discretionary. It is a legal entitlement under the Wet minimumloon en minimumvakantiebijslag, accrued month by month from June to May, and it is payable on leaving even if the May date has not arrived.
The question that actually matters
Whether vakantiegeld is extra money depends on how the contract is worded, and the two phrasings look almost identical.
- "€45,000 per year excluding holiday allowance" means 45,000 in twelve monthly instalments plus 3,600 in May. Total 48,600.
- "€45,000 per year including holiday allowance" means roughly 41,667 across twelve months plus 3,333 in May. Total 45,000.
The difference is 3,600 euros a year, which is not a detail. Dutch job adverts frequently omit the qualifier entirely, and asking directly is the only reliable way to find out. Anyone comparing a Dutch offer with a foreign one should establish this before running any of the arithmetic in the guide to comparing offers.
Why the tax looks wrong in May
Dutch payroll applies a separate rate table to irregular payments, the bijzonder tarief. It is calculated from your projected annual income and applied to the whole of the holiday allowance, without any of the monthly tax credits.
The result is a deduction that frequently exceeds 45% and sometimes approaches 56%, against a monthly payslip that might be showing an effective rate near 25%. Employees see the May payslip, conclude they have been over-taxed, and are usually half right.
The special rate is designed to approximate your marginal rate, which for most Dutch employees is genuinely 49.5% plus the withdrawal of the labour tax credit at 6.51%, giving 56%. So the withholding is often correct. Where it is not, the annual tax return reconciles it and the difference is refunded, typically the following year.
Approximations using the general marginal position for a single employee. The exact special rate applied depends on your previous year's income and is set by the tax authority.
The interaction with the 30% ruling
Holders of the 30% ruling receive their exemption on holiday allowance as well as on monthly salary, since the ruling applies to the taxable base rather than to a particular payment type. That makes the May payment noticeably better for ruling holders than for their colleagues.
The ruling now steps down through 30%, 20% and 10% across sixty months, so the advantage narrows over time in exactly the way it does for the rest of the salary, as the guide to the ruling after the reform sets out.
Three practical points
It accrues from June to May. Someone starting in September receives a proportionate amount the following May, covering nine months rather than twelve. This catches new arrivals who budget for a full payment.
It is paid out on leaving. Accrued but unpaid holiday allowance must be settled in the final payslip, along with untaken holiday days. The final payment from a Dutch employer is frequently larger than expected for this reason.
Some employers pay it monthly. Permitted with agreement, and increasingly common. It smooths cash flow and removes the May surprise entirely, at the cost of the annual lump sum that many households have built plans around.
How it fits the wider European pattern
The Dutch arrangement is a variation on a theme that runs across the continent. Austria and Spain pay fourteen instalments, Italy pays thirteen or fourteen, Switzerland pays thirteen, and Belgium pays double holiday pay plus a year-end bonus.
What differs is the tax treatment. Austria taxes its two extra payments at a flat 6%, which is the most generous arrangement anywhere, examined in the guide to the Austrian 13th and 14th salaries. The Netherlands and Belgium both apply heavier special rates instead. The full map is in the thirteenth month guide.
Work out the annual position, including holiday allowance, with the Netherlands Salary Calculator. Enter the total annual gross rather than twelve times the monthly figure.