Information correct as of May 2023
A 13th-month salary in The Netherlands is an extra paycheck that is paid in addition to an employee's annual salary that is usually equivalent to one month's pay. This pay tradition started in the Philippines in the 1970s and has since spread to many other countries including The Netherlands. Also known as 13th-month pay, in the Netherlands it is very common for businesses to take part in paying a 13th-month salary annually but it is not mandatory, unlike in other countries. Typically 13th-month salary is paid either at the end of the calendar year in around December or in May, where it is also known as Vakantiegeld (holiday pay).
The amount of 13th-month salary paid to each employee in a company is based on their base yearly salary. Usually, it is equal to around 8.3% of their salary which translates to an extra month's wage hence the name 13th-month pay. Some businesses work out 13th-month salary pay by dividing an employee's salary by twelve. For employees who receive a set yearly salary, 13th-month pay can be a deferred instalment of their contracted salary Just like a normal salary, 13th-month pay is subject to tax. A special tax rate applies to additional pay, but how much it will be is still dependent on the size of your overall salary.
Although it can be paid at the end of the year, 13th-month salary is not to be confused with a Christmas bonus. This is a separate financial reward that is not considered a bonus because bonuses are typically tied to the performance of either the individual or the company. Some companies use 13th-month pay as a form of holiday pay and is paid in May. This acts as an incentive for employees to go on vacation and means they can plan their summer leave for the months between June and September.
Is 13th-Month Pay Mandatory in The Netherlands?
Unlike countries like Greece, Spain and Portugal, 13th-month pay is not mandatory in The Netherlands. Although not mandatory, 13th-month salary is considered customary pay for Dutch companies meaning it is a bonus type that employees within the Dutch economy expect annually. It is not classed as discretionary pay for this exact reason, as employees anticipate receiving 13th-month salary and it can cause unrest if not paid. Positions where individuals are paid on a per-task basis rather than a set salary or employees with no formal employment contract, may not receive 13th-month salary.
Frequently Asked Questions
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Is 13th-month pay mandatory in The Netherlands?
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How much money do you get from 13th-month's salary in The Netherlands?
13th-month pay is not mandatory in The Netherlands. Although, it is considered customary pay for Dutch companies meaning it is a bonus that employees within the Dutch economy expect annually.
The amount of 13th-month salary paid to each employee in a company is based on their base yearly salary. Usually, it is equal to around 8.3% of their salary which translates to an extra month's wage hence the name 13th-month pay.