Double Vacation Pay: What Should You Consider as an Employer?
July 2026 - For many companies, spring is not only the time when employees start planning their vacations, but also when double vacation pay is paid out. This is an annual obligation that can have a significant impact on your payroll costs and cash flow. But when exactly do you have to pay it, and what about workers and employees who are leaving the company?
Single and double vacation pay: what’s the difference?
Vacation pay consists of two components. Single vacation pay is the regular wages your employee receives during their vacation days. For office workers, you simply continue to pay those wages when they take vacation.
In addition, there is double vacation pay. This is an extra payment on top of the normal salary. In principle, it amounts to 92 percent of the gross monthly salary and is intended to compensate employees for the expenses they incur during their vacation.
When do you pay the double vacation pay?
By law, you pay the double vacation pay when an employee takes his or her main vacation. In practice, most employers choose to pay all employees at the same time in May or June. This keeps payroll administration organized and ensures that employees know when to expect the payment.
If an employee did not work the full year or full-time during the previous calendar year, both vacation entitlement and vacation pay are calculated on a pro-rata basis.
Why don’t you pay vacation pay to blue-collar workers?
A different system applies to manual workers. They do not receive their single and double vacation pay from their employer, but through the National Office for Annual Vacation (RJV) or the relevant vacation fund. As an employer, you pay contributions to the RSZ for this purpose. Payment to the employee usually takes place between early May and late June.
Important Information Regarding Termination of Employment
If an employee leaves your company, you are required to pay out severance vacation pay. This includes both the vacation days the employee has not yet taken and the days already accrued for the following vacation year.
If the employee later begins working for a new employer, the severance vacation pay previously paid out will be offset. This ensures the employee does not receive vacation pay twice for the same vacation entitlement.
Consider the impact on your cash flow
For many companies, the payment of double vacation pay is one of the largest payroll expenses of the year. Proper financial planning helps avoid surprises. If you’re unsure about the calculation or are dealing with a complex situation, such as variable pay or an employee’s resignation, your payroll service can help you calculate and pay the vacation pay correctly.
