More vacation money for low-income earners this year

Low-income households will get a bit more holiday allowance this year due to changes in the tax system, according to calculations by payroll processor ADP. Households who earn more will get a little less vacation money, NOS reports.

The cut-off is a salary of approximately 3,000 euros gross per month. People who earn that wage will get an extra 259 euros net on their holiday allowance than last year. Those who make more will get less. For example, employees who earn 3,086 euros per month gross will get 18 euros less than in 2022.

“That is because you fall into a different tax rate with an income in between,” Dik van Leeuwerden of ADP said, according to the broadcaster. “In terms of holiday pay, people who earn more than average are therefore getting slightly less.”

According to ADP, the change in holiday pay is due to government measures to protect purchasing power. “Last year’s Budget Day was a lot of work. Everything was bout restoring purchasing power due to the high inflation,” Van Leeuwerden said. As a result, households with a below-average income, in particular, have more net left over.

Most people receive their holiday allowance in May. The allowance is intended to ensure that employees have enough money to go on vacation in the summer. But various studies in recent years showed that most people don’t actually spend their holiday allowance on vacation. Many save that money, use it for renovations, or simply use it to keep their heads above water financially.