The battle for the last Budget Law of the legislature is already underway. Although the decisive time will be played when there is a clear picture of the available resources, as always in a process that requires a direct line with Brussels. After the words of the Prime Minister, Giorgia Meloni, and the Minister of Labor, Marina Calderone, the labor package promises to be quite important. With the dual objective of supporting wages and businesses. But let’s look in detail at the measures under study by the technicians, different from the Irpef reduction with a 33% rate up to 60,000 euros of income, also a priority of the Meloni government.
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Tax exemption for CCNL renewals
A major point is the extension of the tax exemption for CCNL renewals in order to promote wage adjustment to the cost of living and to strengthen the link between productivity and wages. With the last maneuver, wage increases paid to private sector employees in 2026, in implementation of contract renewals signed from January 1, 2024, to December 31, 2026, are subject to a substitute tax of Irpef and regional and municipal surcharges equal to 5%. The measure applies to private sector employees with employment income – in 2025 – not exceeding 33,000 euros. According to the technical report on the 2026 maneuver, about 3.8 million workers are potential beneficiaries of the 5% substitute tax on wage increases paid to private sector employees in 2026, in implementation of contract renewals signed from January 1, 2024, to December 31, 2026. Both the Prime Minister, Giorgia Meloni, and the Minister of Labor, Marina Calderone, have expressed the intention to renew the measure in the next Budget Law as part of a broader range of measures to support paychecks and productivity.
Performance bonuses
In view of the 2027 maneuver, the government is also studying a further strengthening of performance bonuses, given the progress made thanks also to favorable tax rules. With the 2026 maneuver, the substitute tax on production bonuses (and on employee profit-sharing shares) was reduced from 5% to 1%. It applies to amounts rising from 3,000 to 5,000 euros. The technical report on the last budget law estimated a potential pool of about 250,000 involved subjects. The maneuver then extended to 2026 the rule that provides, for dividends paid to employees and deriving from shares assigned by companies in place of performance bonuses, the inclusion in the taxable base of income taxes at 50% (excluding the portion of such dividends exceeding the limit of 1,500 euros, for which full inclusion in the taxable base remains). Bonuses linked to contracts that provide for performance bonuses and profit-sharing had already benefited from a rate reduction from 10% to 5% with the 2023 budget law; the measure was then confirmed in the 2024 maneuver and extended by the 2025 budget law. According to the latest data, updated to July 15, from the Ministry of Labor, the number of employees benefiting from this additional pay linked to company performance has risen to over 4.2 million, exactly 4,241,031: the average annual bonus recognized to these workers exceeded 1,800 euros, standing at 1,815.43 euros, with an increase of 210.19 euros compared to December 2025.
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Night shifts and overtime
Still on the topic of wage support, the government is also studying the confirmation, for next year, of the 15% taxation on allowances and wage increases. With the last maneuver, it was provided that for the 2026 tax period, amounts paid, up to an annual limit of 1,500 euros, to private sector employees as: allowances and premiums for night work (article 1, paragraph 2, of Legislative Decree 66/2003 and CCNL); allowances and premiums for work performed on holidays and weekly rest days (as identified by CCNL); shift allowances and additional remuneration related to shift work (provided by CCNL) are subject to a substitute tax of Irpef and regional and municipal surcharges equal to 15%. The measure operates unless expressly waived in writing by the employee. The interventions are applied by private sector withholding agents to employees with employment income not exceeding 40,000 euros in 2025. The technical report on the last maneuver estimates the number of workers affected by this measure at 2.3 million. Also with the 2026 Budget Law, the 15% integrative treatment on gross wages for night and holiday overtime work performed from January 1 to September 30, 2026, was reintroduced. The benefit is intended for workers in food and beverage service establishments and workers in the tourism and hotel sector, including thermal establishments, with employment income not exceeding 40,000 euros (2025 tax period). In this case too, an extension is being considered.
Stable employment
Another central issue is stable employment, starting with young people and women, who are more disadvantaged today despite the strong increase in employment (which is driven by over-50s). With the May 1 decree, the government rewrote incentives to support stable employment for young people and women. Overall, the provision allocated 934 million euros over the 2026-2028 three-year period: 497.5 million for the under-35 bonus; 175 million for the conversion of fixed-term contracts (up to 12 months) into permanent contracts also for young people; 141.5 million for the women’s bonus and the remaining 120 million for the stable employment incentive for unemployed over-35s in the Single ZES for the South. With this set of interventions, the government estimates to incentivize an additional 110,700 stable contracts. The government is considering extending them also in 2027, and, resources permitting, further strengthening them.
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