According to payroll administrator ADP, many people working in the Netherlands and receiving holiday pay will get less this year than they did last year. This is due to higher taxes on holiday pay for those earning above 34.000 euros per year.
Many with jobs in the Netherlands will only lose out on a few euros, so it’s not the end of the world. Employees on an average salary of 36.000 euros per year will pay just three euros extra to the taxman. And those earning 54.000 per year will pay only five euros more in taxes.
It’s only if you earn between 68.500 euros and 98.000 annually that the higher tax rate might start to sting. Because of this rate, those earning twice the average salary of 36.000 euros will have to pay 117 euros more in taxes on their holiday pay.
Employees earning minimum wage or those with an annual salary of over 98.000 euros will benefit from the new tax rates and receive more holiday pay this year. This is because they don’t have to pay as much to the Tax Authorities.
The new taxes on holiday pay are due to the accelerated reduction of employee tax credit. Conversely, wage taxes have been reduced, meaning that pretty much every employee in the Netherlands pays less tax on their regular salary.