Bonus for incomes of less than 20 thousand euros
Article 1, paragraph 4 of Law number 207/2024 recognizes a IRPEF bonus additional to how many:
- are holders of income from employment, referred to in article 49 of the TUIR (Consolidated Law on Income Taxes, approved by Decree of the President of the Republic of 22 December 1986, number 917, with the exception of pensions of all kinds and allowances equivalent to them referred to in paragraph 2, letter a);
- have a total income not exceeding 20 thousand euros.
The measurement is equal to the following percentages to be applied to the beneficiary’s employment income:
- 7.1% if the employee income does not exceed 8,500.00 euros;
- 5.3% if the employee income is greater than 8,500.00 euros but not 15 thousand euros;
- 4.8% if the employee income is greater than 15 thousand euros.
For the sole purpose of identifying the applicable percentage “employee income is related to the entire year” (article 1, paragraph 5, Law number 207/2024).
Additional deduction for incomes up to 40 thousand euros
Law number 207/2024, article 1, paragraph 6, contemplates a additional deduction from gross IRPEF for those who are holders of employee income referred to in article 49 of the TUIR, with the exception of pensions of all kinds and allowances equivalent to them referred to in the aforementioned paragraph 2, letter a), in possession of a total income exceeding 20 thousand euros, as such excluded from the additional bonus contemplated by the previous article 1, paragraph 4 of the Maneuver.
The further deductioncompared to the beneficiary’s working period, is equal to:
- 1,000.00 euros if the total income is greater than 20 thousand euros but not 32 thousand euros;
- to the result of the following operation 1,000.00 * (40,000.00 – total income / 8,000.00) if the total income is greater than 32 thousand euros but not 40 thousand euros.
Fringe benefits: increased tax relief threshold until 2027
Article 51, paragraph 3, of the TUIR provides that it does not contribute to income the value of the goods sold and services provided by the employer to employees (remuneration in kind or fringe benefits) if the overall amount in the tax period does not exceed €258.23.
If the described value exceeds the threshold of 258.23 euros the same contributes entirely to forming the taxable income for tax and contribution purposes.
Article 1, paragraph 390, Law number 207/2024 introduces a increased tax exemption threshold equal to 1,000.00 euros (in derogation from the ordinary one of 258.23 euros) exceptionally operational for the tax periods 2025, 2026 and 2027.
In particular, they do not contribute to incomeby overall limit of 1,000.00 euros:
- the value of the goods sold and the services provided to employees;
- the sums paid or reimbursed to employees by employers for the payment of domestic utilities for the integrated water service, electricity and natural gas, expenses for renting the main home or for interest on the mortgage relating to the home principal.
There tax relief threshold goes from 1,000.00 to 2,000.00 euros for employed workers with children, including recognized children born out of wedlock and adopted, affiliated or entrusted children, considered fiscally dependent (this means children with a personal income, gross of deductible expenses, not exceeding 2,840.51 euro, limit raised to 4,000.00 euros for children aged up to 24 years).
In order to benefit from tax exemption with threshold increased to 2,000.00 euros the employee is required to submit a specific declaration to the employer reporting the tax code of the children.
Performance bonuses: three years at a rate of 5%
The 2025 Budget (article 1, paragraph 385) reduces from 10 to 5% the rate of the IRPEF substitute tax and regional and municipal surcharges for performance bonuses and the sums paid as profit sharing in the 2025, 2026 and 2027 tax periods.
THE’substitute tax works for the benefit of:
- performance bonuses, paid in execution of company or territorial contracts, in relation to increases in productivity, profitability, efficiency and innovation;
- sums paid as profit sharing;
within the overall amount limit (performance bonuses and profits) of 3,000.00 euros, raised to 4,000.00 euros for companies that involve workers equally.
The 5-10% rate is aimed at those who have, in the previous year, an employee income of an amount not exceeding 80 thousand euros.
