Knowledge base
Vacation allowance in payroll — wage tax and AOV
In payroll, a vacation allowance is not treated as ordinary wage. It is its own wage component with its own wage tax and AOV calculation — and it gets its own group in the annual statement.
Its own wage component, not ordinary wage
In Wage Payroll the vacation allowance is a separate component (Vakantiegeld). It therefore sits apart from the monthly wage, so it stays visible which part of a payment is vacation allowance.
The accrual factor is configurable per company, so the reservation can match the arrangements in your organisation or collective agreement.
Its own wage tax and AOV
Wage tax on the vacation allowance is withheld through its own component (Loonbelasting vakantiegeld), and the AOV contribution is calculated over it separately as well (AOV vakantiegeld).
That matters functionally: the vacation allowance usually falls in a different payment period from the ordinary wage, but the levies stay traceable per component. You can see exactly which part of the withholding belongs to the vacation allowance.
Reported separately as article 14
In the annual statement the vacation allowance is reported in its own group: article 14 vacation allowance. It is not added to ordinary wage but shown as a separate item.
That makes reconciliation easier: you can compare the vacation allowance in the annual statement one-to-one against the reservation and the payment.
Frequently asked questions
- Is the AOV on a vacation allowance the same percentage as on ordinary wage?
- Yes, the AOV rule is the same, but the vacation allowance is its own component with its own amount. The contribution is therefore calculated and shown separately.
- Can I change how the vacation allowance accrues?
- Yes. The accrual factor is configurable per company, so the reservation can match your arrangements or collective agreement.
Indicative information based on the rates Wage Payroll applies — not tax, legal or payroll advice.