Holiday allowance under Dutch employment law
Every employee in the Netherlands is entitled to a holiday allowance (vakantiegeld or vakantiebijslag) of at least 8% of gross annual salary. This right is established in the Minimum Wage and Minimum Holiday Allowance Act (Wet minimumloon en minimumvakantiebijslag). The holiday allowance accrues throughout the year and is typically paid out in May or June as a lump sum.
The 8% rate is calculated over the employee's gross salary, including regular wage components. It does not include overtime pay, profit distributions or expense reimbursements. Higher earners may have a different arrangement: for employees earning more than three times the minimum wage, the employer and employee can agree in writing that no holiday allowance is payable on the portion above that threshold. The statutory basis is Article 15 AMW, which caps the calculation base at three times the minimum wage. Any clause purporting to subsume the holiday allowance into the regular monthly salary without clear separate specification is void under Article 18 AMW.
When is holiday allowance paid in the Netherlands?
The law prescribes that holiday allowance must be paid at least once per year, no later than June. Most employers pay it in May together with the regular salary. The accrual period typically runs from 1 June of the previous year to 31 May of the current year, though some employers use the calendar year.
Upon termination of the employment contract, any accrued but unpaid holiday allowance must be settled as part of the final settlement payment. This applies regardless of whether the employee resigns, is dismissed, or the contract expires.
Holiday allowance and the employment contract under Dutch law
While the statutory minimum is 8%, many collective labour agreements (CAO) provide for a higher holiday allowance. Some employers also offer the option to have the holiday allowance paid monthly rather than as a lump sum, though this must be explicitly agreed upon. An employee cannot waive the right to holiday allowance - any clause in an employment contract that purports to include holiday allowance in the regular salary without a clear separate specification is void under Article 18 of the WML. The holiday allowance constitutes wages for most purposes under the Dutch Civil Code; upon termination, all accrued but unpaid holiday allowance must be settled immediately. Claims for unpaid holiday allowance are subject to the five-year limitation period under Article 3:308 of the Dutch Civil Code.