Foundation of Labour Consultant Studies

Fringe benefits, from exemption thresholds to employer requirements: what's new in 2024

Report of the Fondazione Studi Consulenti del Lavoro

by Andrea Carli

23 February 2024

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The subject of special attention in recent years by legislators, the fringe benefits have 'returned to the limelight' with the Manoeuvre 2024 . The main change was, 'limited to the fiscal year 2024 only', the raising of the non-taxable threshold for employee fringe benefits to EUR 1,000, with an increase to EUR 2,000 if there are dependent children.

This and other novelties on welfare tools have been analysed by the Fondazione Studi Consulenti del Lavoro, in a report entitled 'Fringe benefits: le novità 2024': the document analyses the additional 'benefits' provided by employers to employees in the form of goods and services in the light of the latest Budget Law.

What they are

Fringe benefits are those additional 'advantages' provided by employers to employees in the form of goods or services (remuneration in kind). The manoeuvre 2024 introduced novelties for the 2024 tax year. In recent years, fringe benefits have been an important component of the overall remuneration package, with significant implications for both the employee and the company.

Common examples of fringe benefits are the mixed-use allocation of the company car, the allocation of housing, the provision of electronic devices such as smartphones or computers, soft loans, insurance policies, grants for vocational training, public transport subscriptions, etc.

The exemption thresholds for 2024 only

The latest manoeuvre has provided that, for the 2024 tax year only, the value of goods sold and services rendered to employees, as well as the sums paid or reimbursed to the same employees by their employers for the payment of domestic water, electricity and natural gas bills, the cost of renting their first home or the interest on a mortgage on their first home, will not contribute to forming income up to the overall limit of EUR 1,000 (instead of EUR 258.23). For employees with dependent children, the €1,000 threshold is raised to €2,000 (including recognised children born out of wedlock and adopted or foster children).

Workers who fall into the largest exemption bracket, in order to benefit from the tax relief, must submit to their employer a self-certification in which they certify that they have one or more children who are tax dependent, and also indicate their tax codes. They are then required to communicate any changes in the conditions that may occur during the year.

The exceeding of the thresholds, for the year 2024 of EUR 1,000.00 or EUR 2,000.00, results in the total taxability of the values of the recognised sums; the same conclusion also applies in the event that the prerequisites for the extension of the threshold to EUR 2,000.00 in the case of dependent children are no longer met.

The Revenue Clarification

The Agenzia delle Entrate (Circular 23/2023) then clarified that, in the case of a child over the age of 21, for whom the parents have agreed that it is the holder of the highest income who receives the 100% tax deduction, the other parent may also benefit from the allowance provided that the child is a dependent of both.

What the employer must do

The employer is obliged to report in the single labour book the corresponding value in the relevant period. If the sum of the values of the fringe benefits recognised to the employee does not exceed the thresholds in the 2024 tax period, depending on the characteristics of the beneficiary, this value is exempt from taxation and also from contributions, by virtue of the principle of harmonisation of social security and tax bases.

In the event that the thresholds are exceeded, the Fondazione Studi dei Consulenti del Lavoro further clarifies, the employer must carry out the congruction operations by the end of the tax period.

The last burden on the employer at the end of the tax year is the reporting of the amounts relating to fringe benefits granted to employees. This communication must be made through the 2025 Single Tax Certificate for the 2024 tax year, which is due to be submitted in March 2025, in accordance with the ministerial model and the provisions that will be made available.

Andrea CarliRedattore
- @AncarliCarli
Luogo: Roma
Lingue parlate: Italiano, inglese e francese
Argomenti: Politica estera e geopolitica
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