What is a 13th month or year-end bonus?
A 13th month is an extra month’s wages. An year-end bonus is an amount that you determine yourself. This is often a percentage of the gross annual salary.
These are extra rewards that you pay your employees once per year.
Calculating a 13th month or year-end bonus
A 13th month is a one-off extra payment equal to the gross monthly salary, without holiday allowance.
The end-of-year bonus is not fixed. You determine the amount or percentage of the gross annual salary yourself. The year-end bonus often depends on the company's profit. You can also agree on a 'base' with your staff. This is a fixed minimum amount that you pay your employees as a year-end bonus.
Is a year-end bonus or 13th month compulsory?
A year-end bonus or 13th month is not regulated by law. But the CAO may state that you must pay your employee a 13th month or year-end bonus, and may also specify the amount. Is this not included in the CAO and do you want to offer this employment condition to your staff? Then include the agreement about this in the employment contract.
Who is entitled to it?
Do you pay a 13th month or year-end bonus to your staff? Then you may not exclude any employees. This is due to the rules for equal treatment at work. So you may not only pay the bonus to employees with a permanent contract. Employees with a temporary contract or on-call contract are also entitled to a 13th month or year-end bonus.
Employees who have resigned are entitled to part of the 13th month or year-end bonus in the year of resignation.
Calculating payroll taxes
You must withhold wage tax and national insurance contributions over the 13th month or year-end bonus. You calculate these payroll taxes using the rates from a payroll tax table for special rewards (bijzondere beloningen). You choose that table with the tool for Payroll tax tables (in Dutch).
Payment of 13th month or year-end bonus
Most employees receive their bonus in December. When an employee is dismissed, you can pay out the bonus at another time. You then include the 13th month or year-end bonus in the final settlement.