Last Updated on January 13, 2026
Publication of Law no. 199 of 30 December 2025 governing the “State budget for the financial year 2026 and multiannual budget for the three-year period 2026-2028″.
Below is a summary of the main measures to support businesses and workers.
Social Security Contribution Exemptions
New tax break (paragraphs 153 to 155)
In order to promote youth employment, guarantee equal opportunities and support work in Southern Italy, resources have been allocated for the next three-year period to finance a partial exemption from social security contributions paid by private employers, excluding premiums and contributions due to INAIL.
This relief is granted for a maximum period of 24 months and is applicable to hirings from 1 January to 31 December 2026 of non-executive employees with an open-ended employment contract, as well as to transformations of fixed-term to open-ended employment contracts during the same period.
The requirements and conditions to access such relief will be defined by an upcoming interministerial decree.
Working mothers (paragraphs 210 to 213)
Private employers who, as of 1 January 2026, hire mothers with at least 3 children under the age of 18, who have not held a regularly paid job for at least six months are totally exempt from contributions. This exemption is capped at 8,000 euros per year (adjusted and applied on a monthly basis), for a period of:
- 12 months for fixed-term contracts (also including temporary agency work);
- 18 months should the fixed-term contract be transformed into an open-ended contract;
- 24 months for open-ended contracts.
Tax Measures
Pay increases (paragraph 7)
In order to allow the adjustment of salaries to inflation and to strengthen the link between productivity and pay, the Bill introduced, unless expressly waived by the worker, a tax rate of 5% on the salary increases paid to employees in the private sector in the year 2026 as a result of the renewals of collective agreements signed from 1 January 2024 to 31 December 2026. This tax regime only applies to workers who, in 2025, received an employment income not exceeding 33,000 euros.
Bonuses and participation (paragraphs 8, 9 and 13)
For 2026 and 2027, the tax rate applicable to the sums paid as productivity bonuses or participation in company profits, as per Italian Law no. 208/2015, has been reduced from 5% to 1%. At the same time, the maximum limit to which such tax rate is applicable has been increased from 3,000 to 5,000 euros.
The provision of Law no. 76/2025, providing for the exemption from income tax, of up to 50%, of the dividends paid to workers, deriving from shares allocated to them in lieu of productivity bonuses, capped at 1,500 euros per year, has been extended throughout 2026.
Meal vouchers (paragraph 14)
The non-taxable value of digital meal vouchers issued by employers to their employees has been increased from 8 to 10 euros.
Overtime, night, holiday and shift work (paragraphs 10 and 11 and 18 to 21)
For the 2026 tax year, unless expressly waived by the worker, the sums paid to employees in the private sector, excluding the tourism and hotel sectors, are subject to a tax rate of 15%, capped at 1,500 euros, when paid as bonuses or allowances for work:
- at night;
- on public holidays;
- on days off;
- organised in shifts.
This applies as long as the employment income received in 2025 did not exceed 40,000 euros.
Workers in the tourism, hospitality and spa sectors who, during the 2025 tax year, received an employment income not exceeding 40,000 euros, shall, also for the period from 1 January to 30 September 2026, receive a special supplementary benefit that does not count as part of their income for tax purposes, equal to 15% of their gross salaries paid for:
- night work;
- overtime on public holidays.
Workers must apply for this benefit and certify they have the necessary income requirements, and it is paid by the employer, who may recover the relevant amounts through tax compensation.
Income Support Measures (paragraphs 164 to 172)
Additional resources have been allocated for 2026 from the Social Fund for Employment and Training to finance:
- income support measures for employees of companies in the call centre and sea fishing sectors;
- CIGS (furlough) and mobility in derogation in favour of companies operating in the areas of complex industrial crisis, pursuant to Art. 44, paragraph 11-bis of Legislative Decree 148/2015. Again for 2026, these same companies are exempt from the payment of the additional contribution due for the use of the related government funds;
- CIGS (furlough) for corporate crisis, subject to the signing of a specific government agreement, for companies that have ceased or will cease production activity pursuant to Art. 44 of Decree Law 109/2018.
Companies of national strategic interest, with 1,000 or more employees and with ongoing corporate reorganisation plans not yet completed due to their complexity, may benefit from an additional period of CIGS (furlough) until 31 December 2026, notwithstanding the deadlines and procedures set forth in Legislative Decree 148/2015.
Measures Regarding Parents
Mothers’ Bonus (paragraphs 206 and 207)
The partial contribution exemption provided for by the 2025 Finance Bill in favour of mothers with two or more children is postponed to 2027. The measure concerns employed and self-employed women who receive income from self-employment, business or participation and who have not opted for the flat-rate scheme.
On a transitional basis, for the year 2026, however, working mothers can benefit, on request, from economic aid provided by INPS, provided that their annual work income does not exceed 40,000 euros. In detail:
- mothers with two children are entitled to 60 euros a month until their second child turns ten;
- mothers with more than two children are entitled to 60 euros a month until their youngest child turns eighteen.
Part-time work (paragraphs 214 to 218)
As of 1 January 2026, working mothers or fathers with at least three children living with them, must be prioritised for:
- transformation of their contract from full-time to part-time work (horizontal or vertical), or
- rescheduling of their working hours for those who already work part-time,
provided that the change results in a reduction in working hours of at least 40%. They are eligible for this priority until their youngest child turns ten or without any age limit in the case of children with disabilities.
Any employer accepting the request for conversion without reducing the total company timetable is entitled, for a maximum period of 24 months, to total exemption of the social security contributions (excluding bonuses and INAIL contributions), up to a maximum of 3,000 euros per year (adjusted monthly). Implementation methods for the measure will be defined by an interministerial decree, to be adopted within 180 days of the entry into force of this Finance Bill.
Leave (paragraphs from 219 to 221)
Parents can now take paid parental leave up to their child turning 14 (no longer 12), according to the situations and methods already provided for by current legislation.
Duration of unpaid leave for a sick child has also been doubled, from 5 to 10 days per year, which can be used alternatively by each parent, for children aged between 3 and 14 years (instead of the previous limit of 8 years).
Finally, employers now have the right to extend the fixed-term contract stipulated for replacement of the working mother on leave in order to allow a further period of coaching, in any case no later than the child’s first birthday.
Social Security Measures
Flexible retirement (paragraphs 162 and 163)
The state-funded bridge to retirement (APE sociale) is also extended for the year 2026, namely the benefits paid until old-age pension requisites are awarded to individuals who, during 2026, reach 63 years and 5 months of age and come into one of the brackets provided for by law, such as caregiver, disabled, unemployed or perform heavy or arduous work.
Retention in service (paragraph 194)
The incentive to postpone retirement, already introduced by the 2023 Finance Bill, is also extended for the year 2026. In particular, employees who, by 31 December 2026, meet the requisites for early retirement can decide to remain in service. In this case, workers may request that their employers’ social security contribution be paid directly to them with their payslip, instead of to the social security institution. The sum is not counted as part of their taxable income.
TFR (statutory termination payment) and supplementary pension (paragraphs 203 to 205)
As of 2026, the obligation to pay the TFR to the INPS Treasury Fund is extended also to employers who have reached or reach the limit of 50 employees also in the years following the start of the business and no longer only at the time of its foundation. The average number of employees of the previous calendar year shall be checked annually to see if this limit has been exceeded.
On a transitional basis, for 2026 and 2027, the obligation applies to employers with 60 or more employees; as of 1 January 2032, this limit shall drop to 40 employees.
From 1 July 2026, the mechanism that regulates allocation of the TFR for employees in the private sector also changes radically: the current system of tacit-assent (i.e. TFR is allocated to a form of supplementary pension in the absence of the worker’s express decision within 6 months of their hiring) will be replaced by automatic participation, which will mean they are automatically registered for the supplementary pension provided for by the collective agreements when they are hired. Workers have, however, the right to waive this automatic registration within 60 days from their hiring and opt for another form of supplementary pension or for their TFR accruals to remain within the company. In light of these new rules, employers are required to comply with specific disclosure obligations towards employees when they are hired.
Toffoletto De Luca Tamajo is at your disposal should you need any further clarification and/or details.
