Minimum Holiday Allowance in Amsterdam
Minimum holiday allowance forms the legal minimum for the holiday pay that employers in the Netherlands, including in Amsterdam, must provide to employees. This percentage of the salary helps make vacations accessible for city residents. Standardly, it amounts to 8% of the gross annual salary, with a protective floor based on the national minimum wage, which is particularly relevant for many Amsterdam residents in sectors like retail and hospitality.
What Does Minimum Holiday Allowance Mean for Amsterdam?
Minimum holiday allowance, or minimum holiday pay, is a mandatory addition to salary that employers must offer to help employees finance vacations. It is a core provision in Dutch employment law and applies to anyone with a contract in Amsterdam, whether you work in the Zuidas business district or a shop along the canal belt. This safety net ensures that even on modest incomes, money is available for outings, such as a day in Vondelpark or a weekend getaway.
In Amsterdam, holiday allowance through collective labor agreements (CAOs) can be higher than the minimum, especially in creative or service industries. The payout often occurs in May or June, depending on the employer. For more insights, check our article on Holiday Allowance - When and How Much in Amsterdam?. If in doubt, you can seek free advice from the Legal Aid Office Amsterdam.
Legal Basis
The rules for minimum holiday allowance are outlined in the Minimum Wage and Minimum Holiday Allowance Act (WML). Article 12 of the WML states that the allowance must be at least 8% of the salary from the previous year, with a floor based on the minimum wage. This law, in effect since 1969 and periodically updated for inflation, is crucial for Amsterdam residents in flexible jobs.
The minimum wage is adjusted annually; for 2023, it was €1,934.40 gross per month for those aged 21 and over (from 1 July), leading to a minimum holiday allowance of 8% over 12 months. Employers in Amsterdam who deviate from this risk sanctions from the Labour Inspectorate. Adjusted rates apply for those under 21 or part-time workers. The WML works alongside the Employment Contracts Act and local CAOs, which are often more favorable in the city.
How to Calculate Minimum Holiday Allowance?
The calculation is straightforward and based on the earned salary. The minimum is 8% of the gross annual income, but not less than 8% of a full minimum annual salary. For those who did not work the full year, a pro rata adjustment applies, which is useful for seasonal work in Amsterdam's tourism sector.
Step-by-step guide:
- Taking the gross annual salary from the previous year (including holiday allowance and bonuses, minus overtime).
- Add everything up and calculate 8%.
- Compare with the legal minimum (8% of 12 times the monthly minimum wage).
- For part-timers: base it on actual hours, such as for a 24-hour job in the Jordaan neighborhood.
Example: If you earn €2,000 gross per month and work full-time in Amsterdam, your annual salary is €24,000. Minimum holiday allowance: 8% = €1,920. At minimum wage, the fixed minimum is approximately €1,547 (for 2023).
Practical Examples for Amsterdam
To make it tangible, let's look at typical situations in the city.
Example 1: Full-time in retail. Lisa works in an Amsterdam boutique earning €2,200 gross per month. For 2022: €26,400 gross. Her minimum holiday allowance for 2023 is 8% = €2,112, paid in May alongside her salary.
Example 2: Part-time in hospitality on minimum wage. Ahmed works 20 hours per week in a café on the Prinsengracht, with a full-time equivalent of €1,934.40. His part-time salary: €967.20 per month, annually €11,606.40. Minimum: 8% = €928.51, exactly the legal amount.
Example 3: New starter. Sophie starts in July 2023 at an Amsterdam tech company and works until December: €12,000 gross. Pro rata minimum for 2024: 8% = €960, for half a year.
These scenarios illustrate how the minimum provides flexible protection, ideal for Amsterdam's dynamic job market.
Rights and Obligations Regarding Minimum Holiday Allowance
Employees in Amsterdam are entitled to at least the minimum, paid in cash or as compensation for vacation days. Employers may not deduct it from other payments without agreement. If it's not paid, you can file a complaint with the Amsterdam District Court or the Labour Inspectorate, and seek advice from the Legal Aid Office Amsterdam on Ferdinand Bolstraat.
Guidance for employers:
- Calculate and pay annually, by the end of June at the latest.
- Maintain records for audits.
- Notify the amount via payslips.
Employees: check your payslips and act within 5 years (statute of limitations). Upon termination, you receive a pro rata payout in the final settlement.
| Situation | Employee Right | Employer Obligation |
|---|---|---|
| Full-time above minimum | 8% of annual salary | At least €1,547 (2023) |
| Part-time | Pro rata 8% | Based on hours |
| Termination | Pro rata payout | In final settlement |
Frequently Asked Questions
Must minimum holiday allowance always be paid in May?
No, the law does not specify an exact date, but employers in Amsterdam often pay it in May or June. Consult your CAO or the Legal Aid Office Amsterdam for specific cases.