Most employees will receive holiday pay again in May. For employees with an average income or higher, the amount will be lower or equal to 2023. This is evident from calculations by HR and payroll service provider ADP Netherlands.
However, employees who earn just below average, € 3,000 gross per month, receive a net holiday allowance of 242 euros more. A part-time employee who receives €1,750 gross per month will collect an additional €578 compared to 2023.
Employees with an average income (€ 3,395 gross per month) receive a net € 19 less than last year. If you earn three times the average salary (€ 10,185 gross per month), the net holiday pay is € 637 lower.
Settlement percentage of tax credits
The differences arise from the settlement percentage on the standard tax rate. This settlement percentage must ensure that the tax credits are calculated correctly. The tax credits are income-related. Every year the limits at which the increase and decrease of tax credits begin are shifted. This affects the amount of payroll tax that is withheld from the holiday pay.
For an employee who earns € 1,750 gross per month, a rate of 5.54% is charged this year. Last year this was still 39.94%. For employees with a gross salary of € 3,000, the rate drops from 49.54% to 41.13%. This explains why the holiday pay will be higher in 2024.
However, if the employee earns three times the average gross salary, the top rate of 49.5% will be corrected this year with a settlement percentage of +6.51%. This year the phasing out of the employment tax credit will continue for longer. 56.01% payroll tax is now withheld from the holiday allowance, compared to 49.5% last year.
Introduction of minimum hourly wage
The introduction of the statutory minimum hourly wage as of January 1, 2024 also affects the amount of holiday pay. An employee with the minimum wage based on a 36-hour working week will receive €15 less holiday pay compared to 2023. Minimum wage earners with a 38-hour or 40-hour working week will receive a net of €12 and €40 more respectively.
The main reason is that due to the introduction of a statutory minimum hourly wage, holiday pay is also accrued on a higher salary (more hours) for a 38-hour and 40-hour working week.