Among the priorities is the confirmation of the reduction of the tax burden and the tax exemption of the thirteenth salaries.
The 2024 Budget Law labor package is expected to extend the facilitative measures already provided for workers with dependent children to workers without children as well
In anticipation of the upcoming maneuver, declarations followed by denials, proposals, and then rectifications, perspectives, and downsizing are taking place. However, it is possible to identify some key points while waiting for the Budget Law.
Key points:
- Reduction of contributions and reduction of the tax burden: the government intends to continue the path it attempted to take in the previous year, positively impacting the reduction of contributions for workers earning up to 35,000 euros.
- Promoting hiring: among the objectives of the 2024 Budget Law is to promote hiring those under 36 and women, providing for the extension of incentives. Employers who hire these individuals on a permanent basis will thus benefit from a total reduction of welfare and pension contributions.
- Productivity bonuses: in order to reduce the tax burden on workers’ pay slips, the introduction of a cut in the taxation affecting bonuses received by the worker is foreseen, with a reduction of the rate from 10% to 5% on productivity bonuses. The measure would include performance bonuses and sums paid based on profit sharing (up to the limit of 3,000 euros).
- Increased threshold for fringe benefits: the 2024 Budget Law’s labor package is expected to extend the facilitative measures already provided for workers with dependent children to workers without children. In this sense, the tax-free threshold for fringe benefits (up to 3,000 euros) for goods provided and services rendered to employees would be extended.
The Tax Exemption of Thirteenth Salaries
Even before the Budget Law comes into effect, according to some rumors, the tax exemption of thirteenth salaries could see the light, as announced a few months ago by the Deputy Minister of Economy, Maurizio Leo. Currently, the thirteenth salary is considered taxable income and is subject to both personal income tax (IRPEF) and social security contributions. In terms of thirteenth salaries, the proposal includes applying a cut on IRPEF at a 15% rate, which currently, depending on income, ranges from 23% to 43%.
