State budget forecast for the financial year 2025 and multi-year budget for the three-year period 2025-2027 ,” was presented in the Official Journal no. 305 SO no. 43 of 31 December 2024.
The Budget for 2025 includes several new features for workers, businesses and families, both at the fiscal level, with the revision of the IRPEF brackets and the tax wedge, and at the welfare level, through job placement paths, support for female employment and the transfer of skills.
Let's try to clearly summarize what will change for workers from 2025 and how this can and must also affect the choices of Corporate Welfare.
Budget law 2025
Among the key points of the new Budget for 2025 are Fringe Benefit, IRPEF rates, Tax wedge, leave, deductions, reduction of environmentally harmful subsidies, traceability of expenses, production bonuses, cross-border workers, public employment, fund to combat food poverty at school, National Labor Inspectorate, medical personnel, retention in service, pensions, support for women and families and healthcare.
We therefore analyze specifically only the main topics of interest to workers and directly connected to the world of work.
The Future of Fringe Benefits after the 2025 Budget Law
With the 2025 Budget, an increase in the exemption threshold for the following is also confirmed for this year: Fringe Benefit.
From a limit normally set at €258.23 per year, employers can now provide tax-free goods and services to their employees for a value of up to €1,000.
The threshold is further raised to €2,000 in the case of workers with dependent children.
Fringe Benefits that fall within these thresholds will not be taxable for either tax or contribution purposes and - if the maximum limit is exceeded - the value of the goods and services will be subject to taxation with full contribution.
Budget Law 2025: What's New for New Hires
An absolute novelty of 2025 on Fringe Benefits concerns new hires.
Those who - following a new permanent employment contract - move their residence more than 100 km from their original location will enjoy a tax exemption limit of €5,000 on the sums paid by the employer relating to the transfer, such as the reimbursement of expenses for purchasing or maintaining the house.
Budget law 2025 and productivity bonuses
The 2025 Budget Law also confirmed a reduction to 5% of the tax rate on production bonuses .
There are 2 parameters to benefit from it :
- the bonus must be linked to increases in productivity, profitability, quality, efficiency and innovation and these parameters must be made explicit in an agreement signed at the union level and filed with the national labour inspectorate.
- Only premiums up to a maximum amount of €3,000 are taxable at a reduced rate. However, not all workers can benefit from it, but only those who in the previous tax year received an income from employment not exceeding €80,000.
It is also important to remember the possibility of converting the performance bonus into Welfare credit.
An option not to be underestimated, given that Welfare is not considered a form of remuneration and therefore does not generate any contribution costs for the company, thus producing a 30% saving on labor costs.
However, the worker also has his advantages, saving on taxes and on the share of contributions he is responsible for.
Budget law 2025 and support for workers with children
As part of the possible aid for workers with children , parental leave is strengthened , bringing the number of months compensated at 80% to 3, while maintaining the remaining ones at 30%.
However, the direct recipients of this improvement are only workers who are new parents of children, for whom the mandatory maternity leave ends no later than 2025.
The increase to 2 for the months with 80% compensation had actually already been planned for 2024, but with a reduction of the second month to 60% starting from 2025.
The current increase in months with higher compensation therefore aims to further incentivise the use of this tool.
In support of women and nativity , the contribution exemption for working mothers with 2 dependent children is also confirmed for 2025.
It had already been introduced last year, but only until 2026 and only for female workers with 3 or more children, while it was limited to 2024 only, for those who had only 2.
The exemption remains at 100% for contributions paid by female workers, up to a maximum of €3,000 per year, in the presence of at least 2 children, until the youngest child reaches 10 years of age or - if there are 3 children - until the youngest child comes of age.
Corporate Welfare and Budget Law 2025 Summary
If the world of work changes, welfare also updates accordingly.
In short, what has been said so far demonstrates how the Budget Law confirms and amplifies the tools of Corporate Welfare.
The 2025 Budget also includes a fund to incentivize screening and prevention programs for cardiovascular and oncological diseases organized by employers, which only confirms the " trends " already predicted for Welfare, which tends to move more towards an ever-increasing focus on the health and psycho-physical well-being of workers.
We therefore conclude with a final, necessary analysis of the IRPEF rates and the 2025 tax wedge cuts.
IRPEF Rates & Budget Law 2025
Further confirmation for 2025 is the merger of 2 groups IRPEF , which determines the presence of only 3 total brackets instead of the 4, in force until 2023.
Starting this year, in fact, the rule has been made structural and not transitory, as foreseen by last year's budget law.
So to date:
- for an income share up to €28,000 will be subject to a rate of 23%.
- For an income share higher than 28,000 and lower than 50,000, a rate of 35% will be applied.
- In case of income over €50,000, a rate of 43% will be applied.
The reduction of IRPEF rates is an expression of a clear desire to meet the financial needs especially of that group of taxpayers who earn an income between €15,000 and €28,000, in order to increase their purchasing power.
The NO TAX threshold in the area provided for income from employment remains confirmed at €8,500 : those who earn incomes below this threshold practically pay no taxes.
2025 tax wedge cuts
The tax wedge cut will also change radically in 2025 .
We currently know the tax wedge as a 6/7% contribution discount, recognized to employees with incomes up to €35,000, and as a monthly check of the applicable ceiling.
To be clear: taking the monthly social security taxable income as a reference parameter, if an employee had exceeded the monthly limit, not benefiting from the exemption for that month, he could have started to benefit from it again the following month, provided that he returned within the established parameters.
From 2025, however, the benefit will become fiscal and no longer contributory.
Now, therefore, for employees with a total income of €20,000, a tax-free sum equal to a percentage of the RAL will be recognized in the pay slip , which varies based on the amount of the salary received.
● Salary from €20,000 to €32,000 per year = a fixed deduction of €1,000.
● Salary from €32,000 to €40,000 per year = a deduction that decreases until it runs out.
Thus becoming the parameter directly proportional to the overall income received by the worker for tax purposes, not only income from employment comes into play but also all income received, such as rental income or land income.
Workers will therefore need to be proactive in understanding which of their presumed total incomes fall within the parameters set by law and in communicating this to their employer.