Wages, room for flat taxes to boost renewals and productivity
The Budget Bill envisages a 5 per cent tax on increases in the private sector resulting from the renewal of collective bargaining agreements, a 15 per cent levy on amounts paid for night work and holidays, and a 1 per cent substitute tax on productivity bonuses
More room for flat taxes (or flat tax) in employment, to support productivity, 'extra' work and contractual renewals. This is the path taken by the Budget Bill 2026 (A. S. 1689), approved by the government on Friday 17 October, which began its parliamentary process in the Senate.
Out of ordinary Irpef
The substitute levy for personal income tax and regional and municipal surtaxes on productivity bonuses paid in 2026 and 2027 is further reduced from 5 per cent to 1 per cent, with a maximum threshold of the subsidisable amounts rising from EUR 3,000 to EUR 5,000 per year.
It debuts - for the time being for 2026 only - a subsidised levy of 15 per cent on sums of up to EUR 1,500 paid to workers with incomes of up to EUR 40,000, for shift allowances or for surcharges and allowances related to night work and work on holidays and rest days. Here the direction is similar to the one already in force (and maintained by the Budget Bill) for tourism workers, recipients of a special tax-free supplementary allowance of 15 per cent of gross pay, for night work and overtime worked on holidays.
A subsidised rate of 15% will also apply to the accessory salary of civil servants (non-executives), with a ceiling of EUR 800 and when the gross annual payroll does not exceed EUR 50,000.
Finally, there is a third way of levying a levy in lieu of Irpef, and it is the one linked to contract renewals (long demanded by some trade unions). It is a 5% tax on the salary increases that will be paid to private sector employees in 2026, in implementation of the renewals of the Ccnl signed in 2025 and 2026. The facilitation will only be triggered for those with an employee income of up to 28,000 euro. As stated in the Budget Bill, in Article 4, it is a provision introduced to 'encourage salary adjustment to the cost of living and strengthen the link between productivity and salary'.
