This year, employers can benefit from tax reductions when hiring workers in Italy from certain designated groups. The 2023 Budget Law includes provisions aimed at making it easier for employers to hire young individuals, disadvantaged women, and recipients of citizenship income in Italy. Additionally, there are incentives available for employing unemployed individuals, along with deductions for contributions in the Southern regions of Italy. What are the fundamental criteria and prerequisites that must be satisfied to qualify for these contribution reductions? When is the deadline for utilizing these benefits set to expire?
Who can benefit from this help?
The contribution concession for hiring is designed for employers, including cooperatives and professionals, with public administration bodies generally excluded. Employers seeking to avail themselves of these contribution benefits must adhere to the general usage principles outlined in Article 31 of Legislative Decree no. 150/2015 or follow these guidelines when recruiting:
- ensure compliance with all legal and collective bargaining obligations, and respect any re-employment priority rights.
- avoid implementing work suspensions due to a crisis or company reorganization.
- maintain a valid DURC (Documento Unico di Regolarità Contributiva - a certificate confirming social security contribution regularity).
- abide by labour regulations, encompassing national, regional, territorial, or company agreements and any collective agreements that may be in effect, as well as workplace safety provisions.
What is meant by "facilitated hiring"?
Facilitated hiring refers to the creation of an employment arrangement where the employer has the chance to benefit from one or more reductions in contributions and/or insurance fees, as stipulated by the law, for a specified duration. These advantages apply solely to the employer's portion of the contributions.
How is the employment of individuals aged 50 and above implemented?
Current regulations, which have been in effect for the past few months (as per Article 4, paragraph 8, Law no. 92/2012), offer a partial reduction, amounting to 50%, for the hiring of workers aged 50 or older.
To avail of this benefit, the employer must initiate the mandatory electronic notification of the hiring, extension, or conversion of the employment contract. This involves electronically submitting the 92-2012 form to INPS, which can be accessed through the Facilitation Portal on the official institutional website.
During the INAIL self-assessment process, a 50% reduction in the gross taxable salary used for calculating the annual premium is applied. The remaining 50% is categorized as "exempt remuneration".
How to request assistance for hiring disadvantaged women?
The 2023 Budget Law (Law no. 197/2022, Article 1, paragraph 298) offers substantial support for the recruitment of women, subject to a yearly limit of 8,000 euros. This support is available for women who are either at least 50 years old and have been unemployed for over 12 months or meet other specified criteria:
- women residing in regions eligible for European Union Structural Funds, who have not had consistent paid employment for at least six months.
- women engaged in professions or economic sectors characterized by significant gender imbalances, with a male-female disparity rate at least 25% higher than the average, and who have not held a regular job for at least six months.
- women residing anywhere without consistent employment for at least 24 months.
To apply for this support, individuals or organizations interested in hiring disadvantaged women should follow the guidelines outlined in the 2023 Budget Law, specifically under Article 1, paragraph 298.
How to avail of hiring incentives for young individuals?
In 2023, hiring a worker under the age of 36 provides employers with full contribution relief for a duration of 36 months, or up to 4 years if the workplace is situated in one of the disadvantaged regions of the Mezzogiorno (South of Italy).
As per the Labour Decree (Legislative Decree no. 48/2023, converted into Law no. 85/2023), from June 1, 2023, until December 31, employers can hire a young person under the age of 30 who is not engaged in formal education or permanent employment. They can benefit from an incentive lasting 12 months, covering 60% of the gross monthly salary subject to social security contributions.
To take advantage of this incentive, the employer must follow these steps:
- electronically apply for incentive utilization to INPS.
- within seven days of receiving the booking confirmation, establish the employment contract that qualifies for the incentive.
- within the subsequent seven days, inform INPS, using the electronic procedure, about the contract that qualifies for the incentive.
In the communication with INPS, provide the following information:
- details about the worker for whom the permanent or apprenticeship contract has been established or could potentially be recruited.
- the Region or Autonomous Province where the work will be performed.
- the projected average monthly salary, inclusive of the accruals for the thirteenth and fourteenth months.
- indicate the nature of the employment relationship (full-time or part-time) and the applicable hourly percentage.
- specify whether you intend to leverage other incentives for the recruitment.
How to verify work periods for youth hiring incentives?
To qualify for contribution relief when hiring individuals under the age of 36, the prospective employee must never have been previously employed on a permanent basis. Currently, there is no established method for certifying this requirement as mandated by law to ensure the legitimate application of the relief. Even a substitute declaration or notarized document provided by the worker is insufficient. Therefore, it is advisable to gather all available evidence and certification documentation, such as the Professional Card (SAP) issued by Employment Centers, Unilav models maintained by the worker, and the contribution account statement.
How to request benefits for hiring recipients of citizenship income?
Employers who hire individuals benefiting from basic income, under a full-time and open-ended employment contract, including apprenticeships, are eligible for an incentive outlined in Article 8 of Decree Law no. 4/2019.
This incentive grants exemption from both the employer's and the employee's social security and welfare contributions (excluding INAIL premiums and contributions). The exemption is capped at the monthly amount of citizenship income the worker is entitled to at the time of recruitment, with a monthly maximum limit of 780 euros for a full-time contract.
If the hiring of a citizenship income beneficiary aligns with their training course, as per the Training Agreement between training institutions and Employment Centers or employment agencies, the incentive is awarded in the form of contribution relief. It is divided equally between the accredited training body that facilitated the worker's training or professional retraining course, up to a monthly ceiling of 390 euros, and the hiring employer. The minimum usage period is determined by subtracting the monthly payments already received by the RdC beneficiary up to the recruitment date from 18 monthly payments, with a minimum of 5 months.
To determine the specific amount and duration of the incentive, employers must first submit an electronic request to INPS. INPS will calculate the benefit based on available information regarding the Citizenship Income and the social security and welfare contributions declared in the request.
To formally request this benefit, employers must then submit an application to INPS using the online application form, "SRDC – Slievo Reddito di Cittadinanza," accessible on the Benefits Portal (formerly DiResCo).
The 2023 Budget Law (Law no. 197/2022, Article 1, paragraph 294) introduced an alternative relief for hiring the same category of workers, with operational instructions expected.
According to the Labor Decree, starting from January 1, 2024, a new exemption from social security contributions is granted for employment contracts with recipients of the new Inclusion Allowance (Article 10, Decree Law no. 48/2023). This exemption applies to various types of contracts, including full-time, part-time, apprenticeships, conversions to indefinite contracts, and fixed-term or seasonal contracts, whether full or part-time.
For permanent contract hirings, employers are fully exempt from paying their social security contributions, up to a maximum of 8,000 euros per year.
In the case of fixed-term or seasonal contract hirings, employers are exempt from 50% of contributions for one year, within a limit of 4,000 euros.
How does the Facilitation Portal operate?
The Facilitation Portal (formerly known as DiResCo) provides the capability to electronically sign the primary declarations of responsibility related to compliance with the relevant legal prerequisites for utilizing contribution reductions and incentives. Users can receive immediate confirmation of their submissions in real-time.
Access to the Portal is open to companies, consultants, and professionals.
What is the process for applying for the Southern tax reduction?
The Southern contribution relief involves a partial exemption from contributions that private employers can access for all existing employment arrangements (as per Decree Law no. 104/2020, Article 27).
The geographical scope of this incentive is determined by the location of the workplace, which must be situated in regions classified as less developed, transitional, or regions with a gross domestic product per capita in 2018 lower than 75% of the EU27 average, or within the range of 75% to 90%, combined with a lower employment rate compared to the national average.
The contribution relief applies to employees with both full-time and part-time employment contracts, whether they are permanent or fixed-term, as well as those under apprenticeship contracts. The incentive, which has been confirmed by the EU for the entire year of 2023, is equivalent to 30% of the total social security contributions owed by employers, excluding premiums and contributions to the National Institute for Insurance against Accidents at Work (INAIL).
How to access benefits for unemployed workers?
Individuals, regardless of their age, currently receiving NASpI or DIS-COLL benefits, can be engaged through a retraining apprenticeship employment contract. This type of employment agreement is initially established for an indefinite period, and the employer's contribution rate is as follows:
- 10% for the duration of the apprenticeship.
- 1.50% in the first year and 3% in the second year, if the workforce consists of fewer than 10 employees.
Depending on the collective agreements in place, the compensation may be adjusted or set at one or two levels below the qualification level. Importantly, when applying the facilitated contribution scheme for hiring NASpI recipients, there is no need to submit any prior applications to the Institute.
What regions are considered disadvantaged for facilitated recruitment?
Disadvantaged areas, eligible for funding from EU structural funds as per Article 2(4)(f) of Regulation (EU) no. 651/2014 by the European Commission, are identified annually through a specific Decree issued by the Ministry of Labour and Social Policies in coordination with the Ministry of Economy and Finance. As of now, these regions include Abruzzo, Basilicata, Campania, Calabria, Molise, Puglia, Sardinia, and Sicily.
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