Maxi deduction of labor costs

News Flash No. 10/2025

We would like to remind the respectable Clientele that Legislative Decree No. 216 of Dec. 30, 2023, implementing the first form of reform of personal income taxes and other measures on income taxes, in Article 4, provided for a 20 percent increase in the cost of employee personnel allowed as a deduction, in the presence of new hires that result in a net increase in employment compared to the employed personnel in force in the previous tax period.

Employers eligible for the tax break, if they meet the requirements highlighted above, are:

- companies/entities resident in Italy (spa, sapa, srl, cooperative and mutual insurance companies);

- non-business entities, limited to new hires used in the conduct of business, provided that they result from separate accounting records;

- Non-resident individuals, with respect to the business activity carried out in Italy through a permanent establishment;

- Sole proprietorships (including family businesses and spousal businesses);

- Partnerships (snc, sas) and related entities;

- Practitioners of the arts and professions who are self-employed (including in associated form).

The relief does not apply to companies and entities in ordinary liquidation, subject to judicial liquidation or other liquidating institutions related to business crisis.

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