Thursday, May 7, 2015 - 10:51
Holiday pay declines for first time in years
For the first time in years holiday pay is declining in the Netherlands. The new tax rules are taking a big bite out o the annual bonuses of people earning one and a half to two times the average income. According to the calculations of pay slip processor ADP, people earning higher incomes will feel the change the most, AD reports. People earning a salary that is one and a half times the average income - 3,993 euros gross per month - will get 242 euros net less on the holiday pay. With an income of twice the average, holiday pay will be about 204 euros less. People on average incomes will have about 59 euros less to spend on holiday and there will be no change for people earning minimum wage. The cuts on holiday pay is intended to level out the tax burden caused by, among other things, the fact that earned income tax and general tax is now income dependent. "This basically means that the more you earn, the more tax you pay and the latter is partly due to fewer people receiving credit on paid tax", Marco Hennekam of ADP explained to AD. With 2014's tax returns many employees were already faced with the phasing out of tax credits. They received a lower refund, or even had to pay more money in. The higher taxation of holiday pay is intended to stop this situation repeating itself next year. "For this reason, ulike last year, the reduction in tax credits is taken into account with special payments such as holiday pay, thirteenth checks and bonuses.", said Hennekam.