Manoeuvre, government aims at a flat tax for night work, overtime, holidays or thirteenth month work
On the model of the 5% flat rate tax on productivity contracts, in view of the manoeuvre, the government is studying the extension of preferential tax treatment to other contractual institutions as well, to the benefit of workers' payroll and greater flexibility for companies
3' min read
Key points
3' min read
Extending favourable taxation to night work, holiday work, overtime, and 13th month bonuses. The extension of favourable tax treatment for productivity bonuses, which enjoy a flat tax of 5 per cent, is being studied by the government in view of the next Budget Law. The idea is to apply a flat tax, subtracting other contractual institutes from the ordinary Irpef taxation, to the benefit of workers who will find themselves with a higher net in their pay envelope and of companies that will be able to count on greater flexibility in performance outside ordinary working hours, with a positive boost on productivity growth as well. The quantum of the tax 'discount' has yet to be defined, but the parties of the government majority, from Fdi to Fi to Lega, agree on the basic principle.
The reference model to be extended: the performance bonus
The model, therefore, is that of performance bonuses paid to private sector workers, which are subject to a substitute tax rate that was halved to 5% from the previous 10% by the Budget Law of 2023. The tax relief was confirmed at 5% in the two subsequent Budget Manoeuvres that extended the validity to the three-year period 2025-2027.
The beneficiaries are employees in the private sector with a fixed-term or open-ended employment relationship, whose income from work does not exceed EUR 80,000 in the previous year, for an amount of the performance bonus up to a limit of EUR 3,000 gross, which can be increased to EUR 4,000 in companies that involve workers equally in the organisation of work.
The tax benefit for over 4 million workers
.According to the latest report, as of mid-July 2025, more than 4 million workers (4,225,193 to be exact) have benefited from the performance bonus linked to collective agreements concluded by the social partners at company or territorial level. The average value of the bonus is EUR 1,601.51 per year, of which EUR 1,801.35 refers to company agreements and EUR 822.12 to territorial agreements
The tool, with its tax advantage, is becoming increasingly popular among workers and the number of contracts deposited and active in mid-July is also growing. The Ministry of Labour has recorded a steady increase in deposits, which amount to 95,976 contracts since the beginning of the year, 6% more than in January-mid-July 2024.
