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8% Holiday pay

We experience with most foreign companies issues about the 8% holiday pay.

By Dutch law it is stated that every employee is obliged to receive 8% holiday pay in the month of May or June over the previous 12 months regular gross salary earned. In general the holiday pay is paid in May, sometimes in June.

If you agree a gross monthly or annual salary with an employee that is subject to Dutch legislation, then on top of this gross salary comes 8% holiday pay. This is only different when in the employment agreement it is explicitly stated that the gross monthly salary is already including 8% holiday pay. Without this stated, the employee is still entitled to holiday pay, despite possible agreements.

Please note that 8% holiday pay is different than holidays. In the Netherlands employees are entitled to at least 2 holidays per month. Holidays can be build up by the employee during the calendar year, however, when the years finishes, the employee should have used these holidays or will soon use the holidays, otherwise the holidays can expire.

How to calculate the Dutch salary taking into account holiday pay? If you have a EUR 80.000 annual gross salary and you do not want to pay 8% holiday pay on top, then you part EUR 80.000 by 12,96 and you have the gross monthly salary of EUR 6.178,84. In the month of May 8% holiday pay can be paid and the EUR 80.000 annual gross salary will not be exceeded.

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