NewsletterAPPROVED THE 2026 BUDGET LAW 

APPROVED THE 2026 BUDGET LAW 

On December 30, 2025, the Italian Parliament approved the 2026 Budget Law.

The law includes many changes impacting labor law, such as:  

1. The introduction of new tax relief on various elements of remuneration, in particular: increases provided for in the 2024, 2025, and 2026 NCBAs renewals will be subject to a reduced tax rate of 5%; bonuses and indemnities for night work, shift work, work on public holidays or rest days up to a limit of EUR 1,500 per year will be subject to a tax rate of 15%; performance bonuses and profit sharing within the limit of EUR 5,000 per year will be subject to a tax rate of 1%; dividends paid in lieu of performance bonuses will be calculated at 50% of the taxable base within the limit of EUR 1,500 per year.
2. The increase in the exempt amount for electronic meal vouchers, which rises from EUR 8 to EUR 10. 
3. The introduction of new contribution exemptions for up to 24 months for the hiring of non-executive staff on permanent contracts or for the conversion of fixed-term contracts for workers belonging to disadvantaged categories (young people, women, residents of the Special Economic Zone for Southern Italy). 
4. The extension to 2026 of multiple forms of social safety nets. 
5. Adjustment of retirement eligibility requirements: from January 1, 2027, the requirements for access to the pension system will be increased by one month. 
6. The strengthening of supplementary pension funds. 
7. New measures to promote parenthood in the workplace: extension of the “mothers' bonus” until 2026; 100% exemption from social security contributions (up to a maximum of EUR 8,000 per year) for employers who hire working mothers with at least three children; priority given to the conversion of full-time contracts to part-time contracts for workers with at least three minor children living at home, with a 100% exemption from social security contributions (up to a maximum of EUR 3,000 per year); the age limit of the child within which parental leave can be taken is raised from 12 to 14 years and extension of the duration of sick leave for children between the ages of 3 and 14 from 5 to 10 days per year;