Navigating Holiday Allowance and Time-Off Policies in the Netherlands

Summer is here in the Netherlands, which means everybody is preparing their out-of-office messages for their holidays! It is also the time of year businesses really review their time-off policies in the Netherlands. Although employers in the Netherlands are required to offer their employees a minimum of 20 days holidays per year, it is standard practice to offer even more. As a result, the average Dutch worker generally tends to take an average of three weeks of holidays throughout the year – sometimes all at once!
Want to know what to expect when it comes to summer holidays, paid time-off, and even the illustrious ‘Holiday allowance’ this summer? In this article we are going to cover everything you need to know to begin to make a compliant time-off policy in the Netherlands.

Amount of paid time off allowed in the Netherlands

Every employed person is entitled to paid leave (in Dutch: wettelijke vakantiedagen) per year. As of 2024, the amount of required paid leave an employer must allow is at least four times the number of hours they work per week. A full-time employed person working 40 hours per week would be entitled to 160 hours of leave per year, or 20 days if the employee works a typical 8 hour workday. However, most companies offer more paid leave than the legally required amount.
Does the business comply with a specific collective labour agreement (CAO)? In which case, it’s important to check what the rules are regarding paid time-off with the CAO. More often than not, the CAO will require the business offer more than the statutory amount.

How paid time-off is accrued

Generally speaking, every employee accrues holiday time while they are working, or if they are on another type of paid leave (for example, on sick leave). If an employee is on unpaid leave, then they do not accrue paid time-off. The only exceptions to this rule are long-term care leave (zorgverlof) and maternity leave for partners (Geboorteverlof voor partners).

How to take paid-time off

Firstly, most businesses have their own policy and requirements for employees to request leave. In terms of the law, there are not any specific requirements for this policy other than the business must make the process transparent to employees, and reasonably possible to follow.
The most important aspect for a business regarding paid time-off is tracking it for every employee – which can be complicated. For example, there are different “types” of paid leave besides statutory paid leave and each type of leave will expire at different times. We have written several articles about how to calculate and track employee leave in the Netherlands. However, it is often necessary to employ or partner with somebody who understands employment law very well.

About the ‘Holiday allowance’ (vakantiegeld)

Unique to the Netherlands is the concept of the “Holiday allowance” (in Dutch: vakantiegeld). This is an additional statutory allowance paid to employees who work in the Netherlands – it must be at least 8% of the employee’s gross wages from the previous year. Because it is meant to be used to fund the employee’s Summer holiday, it is typically paid out as a lump sum in May or June. However, some companies choose to pay it throughout the year instead.
If you’d like to learn more about the holiday allowance (for example, how it’s calculated and details about it) we’ve written a detailed guide about it on our blog.

Track your employees’ paid time-off with ease

In conclusion, understanding and navigating holiday allowance and time-off policies in the Netherlands can be complex, but it is essential for ensuring compliance and maintaining employee satisfaction. By staying informed and implementing clear policies, you can effectively manage your workforce’s vacation days and promote a healthy work-life balance.
If you need help drafting a fair, compliant, and attractive paid time-off policy for your business, do not hesitate to contact us. Whether your business needs support with just one policy, or with all the policies in your employee handbook, our team of expert HR specialists can help. Get in touch with us today to learn how we can support your business needs.