Corporate welfare, the importance of being up-to-date

Lately, moreover, through transitional provisions contained mostly in budget laws, 'temporary' exemptions have been made to the quantitative and qualitative limit for a particular type of welfare benefit: fringe benefits.

The last of these exemptions, in order of time, is contained in the Budget Law for 2024. In particular, this legislative measure has provided, transitorily for the current tax year only, for a new derogation to the threshold of 258.23 euro indicated in Article 51, paragraph 3, of the Tuir for emoluments in kind paid by the employer to its employees (fringe benefits). This threshold is increased - in 2024 - to EUR 2,000 for employees with dependent children and to EUR 1,000 for all others.

As already provided for in the past by a series of measures (Aid bis Decree, Aid quater Decree, Labour Law Decree, Budget Law for 2023), also for 2024 and as a result of the provision under comment these amounts may be disbursed for the payment (or reimbursement of costs incurred for payment) of electricity, gas and water utilities. For the first time, on the other hand, the same amounts may also be used to cover the costs incurred by workers for the payment of rent or the interest on the mortgage relating to the purchase of their first home..

The frequency of welfare interventions, especially when of a transitional nature, has made continuous training of those who, in various capacities, are involved in managing welfare plans within companies or on their behalf essential. In some cases, welfare benefits - e.g. supplementary pension or supplementary health care contributions, as well as payments in kind or fuel bonuses - must be correctly included in the Single Tax Certificate (CU) issued by employers to their employees.

In the CU, corporate welfare items are reported in dedicated sections, separate from employee income: for example, in the 2024 form fringe benefits are entered in the 'other data' section in fields 474 or 475. This allows employees to have a clear and transparent view of the benefits received and their non-monetary nature. In fact, these benefits, if they comply with the regulations in force, do not contribute (or contribute partially) to taxable income and are therefore exempt from taxation.

It is important to be able to deal with or identify this information within the document, also in order to later verify its correct inclusion within the tax return. On this subject, some doubt arises in relation to welfare items arising from performance bonuses.

The performance bonus is not technically a welfare measure, but it is often linked to the setting up by employers of welfare plans or platforms. In fact, the legislation provides that the performance bonus, at the employee's choice and provided that the agreement establishing it allows it, may be converted in whole or in part into welfare benefits, including contributions paid to health or pension funds. In this case it should be remembered that the premium will flow into the pension fund tax-free - without entering the deductibility ceiling - and will not be taxed at the time of leaving. Conversely, any welfare credit allocated to supplementary pensions will be deductible within the ceiling.

The performance bonus, within the CU, has a dedicated section, in which the items paid in this capacity and subsidised for tax purposes according to sectoral regulations are entered. The subsidised performance bonus must be reported in that section both if it was received in the pay packet and if it was converted into welfare.

Corporate welfare certainly represents an opportunity for companies and workers, and its great development in recent years suggests that the world of work is moving to grasp its full potential. In order to make the most of the possibilities offered by this system, it is important to be familiar with it: from regulatory provisions and practices to tools; from planning and monitoring models to tax compliance. Next 16 September will see the start of the Mefop course "Welfare in the company: planning, management and control", the aim of which is to provide all the skills and information needed to compose and manage, in the best possible way, an integrated company welfare system.

Increasingly important is the detailed knowledge of tax and statutory mechanisms in order to be able to better govern corporate welfare opportunities. This knowledge is of interest to everyone: personnel and human resources departments, consultants working for companies, trade union representatives, welfare product distribution networks and workers themselves. All are called upon to contribute to structuring a well-designed corporate welfare; all are called upon to make the right decisions to improve their well-being in the workplace.

(*) Mefop