Italian 2026 Finance Bill – Key Tax Measures: Support for Middle and Low Incomes | Revision of IRPEF tax brackets | Baby bonus | Enhanced parental leave and nursery bonus | Social security exemption for working mothers | Increased deductions for private school expenses | Family endowment fund | First home mortgage guarantee fund | Support for food purchases | Energy-efficient appliance bonus | Cap on deductions for incomes over €75,000 | Exceptions for healthcare, mortgages, and startup investments | End of deductions for children over 30 (except disabled children) | “Hire more, pay less” tax deduction for new permanent hires | Reduced tax on productivity bonuses | Fringe benefit exemptions | Relocation support for new hires | Raised flat tax threshold for employees and pensioners | Reduced corporate tax (IRES) for reinvested profits | Tax credits for southern Italy investments | Enhanced “Nuova Sabatini” machinery financing | Support for SME stock market listings | Increased public investment in defense, infrastructure, and healthcare | Banking and Insurance | Deferred deductions for financial sector losses | Annual stamp duty on life insurance contracts

Doing Business in Italy Guide

Employment

8.1 Employment Contracts

Italian employment contracts must comply with national labor laws and collective bargaining agreements (CCNL). Contracts may be:

  • Permanent (tempo indeterminato) – Default form with full protections
  • Fixed-term (tempo determinato) – Allowed for specific projects or seasonal work
  • Apprenticeship (apprendistato) – Combines training with employment
  • Freelance/Consultant (collaborazione) – Used for independent contractors

Contracts must specify duties, compensation, working hours, and termination terms.

8.2 Working Hours and Leave

Standard working hours are 40 per week, with a legal maximum of 48 including overtime. Employees are entitled to:

  • At least 4 weeks of paid annual leave
  • 11 public holidays
  • Sick leave and maternity/paternity leave

Collective agreements may grant additional benefits or leave entitlements.

8.3 Social Security and Benefits

Employers must register with:

  • INPS – National social security agency
  • INAIL – Workplace injury insurance
  • Other institutions such as those managing supplementary pension  and unemployment benefit schemes, life and health insurance where applicable

Contributions cover pensions, unemployment, disability, and parental leave. Rates vary by sector and employee category.

For more information see this article

8.4 Termination and Severance

Termination must follow legal procedures and may require justification. Employees are entitled to:

  • Notice period (depends on assigned level within national collective bargaining agreements, can range from 15 days to several months)
  • Severance pay (Trattamento di Fine Rapporto or TFR)
  • Unemployment benefits if eligible

Unjustified dismissal may lead to reinstatement or compensation. Collective agreements often define additional rules.


If you have any questions , feel free to contact us.

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