NewsCase StudiesEvents

Italian payroll round-up for January 2016

Also in the news...

The Advantages Of A UK Subsidiary

The UK is one of the best places on Earth to have a business. This makes many overseas companies seek to enter the UK market.

Registration of Title to Land at Abuja Geographic Information System, Nigeria

The Federal Capital Territory (FCT) Abuja, Nigeria’s capital is gradually becoming a renowned city in Africa. In recent times, there has been an influx of people into the city and its real estate development and construction sectors are developing at a tremendous pace.

FREE VISA FOR LIFE WITH COMPANY SETUP STARTING AT AED 14,500

Looking to set up your UAE company? How about a visa for life? It might sound too good to be true, but it’s a reality. And the offer ends October 31st.

4 Red Flags You Should Watch Out for When Hiring a Web Design Team

If you want to build traction for your startup, you need to invest in a high-quality website. You also can't afford to make too many mistakes, because a good website costs money.

UK showcases green dozen at Global Investment Summit

The Government reveals the 12 businesses from across the UK who will showcase their green technology and innovations at the Global Investment Summit.

Italian payroll round-up for January 2016

Back to News

Following is a summary of recent payroll changes in Italy

Contribution exemption

The rules and contribution exemptions for employees hired on open-ended contracts have changed – reducing the contribution bonus and length of time the benefit is applicable.

An employer who hires an employee between 1 January – 31 December 2016, on an open-ended contract with the same conditions as the previous year, is exempt from paying 40% of total social security contributions. This excludes INAIL bonuses, at an annual capped amount of EUR 3,250. For employees hired in 2015, the thresholds set by the previous law will apply for the entire three-year period. The longest period contribution benefits apply for is 24 months.

This cannot be combined with other exemptions or reductions of financing rates provided for by current law.

Tax relief on productivity bonus

After a year of suspension, the de-taxation link to wages and productivity bonuses has been reintroduced. The existing regulatory framework still applies.

This applies to private sector employees with income derived from subordinated employment that did not exceed EUR 50,000 in the prior year.

This condition is certifiable by the beneficiary in writing, in case the withholding agent required to apply the substitute tax is not the same that issued the Certificazione Unica (Certification on income) in the previous year.

The government announced that the productivity bonuses of a variable entity, where payment is linked to increases in productivity, profitability, quality, efficiency and innovation, is measurable and verifiable on defined criteria by a Decree to be issued within 60 days from 1 January 2016. These amounts are subject to substitute additional regional and local taxes as well as IRPEF (Personal Income Tax), amounting to 10% but no more than EUR 2,000.

Productivity bonuses must be paid in compliance with territorial or business contracts.

The maximum de-taxable amount cannot exceed EUR 2,500 for companies that involve employees in work, in accordance with the terms defined by the Ministerial Decree.

Corporate welfare

Services or works voluntarily offered to all employees, categories or to relatives, for recreational, educational, social and health purposes will not count as part of the income tax base of employees.

Paternity leave

Paternity leave for employed fathers was trialed in 2015. It will be extended in 2016, and needs to be used within five months of the child’s birth. The same applies to optional paternity leave.

Part-time pre-retirement

The application of part-time pre-retirement is now ruled. However, it raises several concerns and requires further clarification.

Employees hired with full-time open-ended contracts, who will accrue the right to receive age pension (must meet the minimum requirements to be eligible) up until 31 December 2018, can agree with the employer a transformation of their contract from full-time to part-time.

When an employee moves to a part-time contract from a full time one, the employee will accrue the right to figurative pension coverage related to the activity performed. The employer does not pay the lost contribution, but will pay the employee directly. The reduction of working hours could be between 40-60% of full-time working hours.

Additional financing of social safety nets in derogation

In 2016, the government will increase the funds allocation for social safety nets, with a budget of Euro 250 million.

The treatment of wage integration in derogation, from 1 January – 31 December 2016, is granted for a period no longer than three months in a year. The mobility treatment in derogation to current legislation cannot be granted to employees who, on the starting date of the treatment, have already received benefits of mobility schemes for at least three years (continuous or non-continuous).

Got questions? Get in touch with our experts in Italy.


You are not logged in!

Please login or register to ask our experts a question.

Login now or register.