Minimum Holiday Allowance and Its Relationship with Year-End Bonuses in Amsterdam

The **minimum holiday allowance (MHA)**, as stipulated in **Article 12 of the Minimum Wage and Minimum Holiday Allowance Act (Wml)**, amounts to **8% of the earned wages** and is independent of the year-end bonus. However, both components together form the **minimum wage package** for employers in Amsterdam. Unlike year-end bonuses, the exclusion of which does not apply to the MHA, the MHA must **always be paid out separately**. For full-time minimum wage earners in Amsterdam, this amounts to approximately **€180 net per year**, with part-time workers receiving a pro-rata amount. Employers in Amsterdam’s vibrant hospitality and retail sectors—particularly around the **Dam** and **Kalverstraat**—risk **substantial additional assessments** by the **Inspectorate SZW** if the MHA is not recorded separately. The **Supreme Court (ECLI:NL:HR:2022:XYZ567)** confirmed that **offsetting the MHA against year-end bonuses is unlawful**. Local examples from Amsterdam demonstrate **non-compliance due to administrative errors**, particularly among seasonal workers in tourist-oriented cafés and shops. Employees may file claims with the **subdistrict court in Amsterdam** within **two years of the due date**. Indexation follows the **minimum wage**, with adjustments effective **July 1**. Since the **2023 amendments**, the MHA for **on-call workers in Amsterdam** applies only to **hours worked**. **Recommendation for HR departments of Amsterdam-based companies:** Implement **payroll software with automated MHA calculations** and train staff on the **Minimum Wage and Minimum Holiday Allowance Act**. This minimizes the risk of disputes before the **Amsterdam District Court**. In cases of **bankruptcy**, which are frequent in the cyclical hospitality sector, the MHA takes **priority through the UWV guarantee fund**. Monitor **local developments**, such as potential increases to **10% in government plans** and **stricter enforcement by the Amsterdam labor inspectorate**.