In Message no. 1935 of 18 June 2025, the Italian Social Security Institute (INPS) clarified the rules for applying the contribution exemption for hiring employees under the age of 35, in line with guidance from the European Commission. To legitimately qualify for this exemption, the company must achieve a net increase in employment—regardless of where the new hire is based. This requirement will apply from 1 July 2025, including in areas outside the so-called Special Economic Zones. As such, from that date onwards, access to the under-35 hiring incentive will depend on the employer achieving a genuine increase in the workforce. To assess this increase, INPS requires the use of what is called the Annual Work Unit (ULA) approach: employers must compare the average number of full-time equivalent staff in the 12 months preceding the hire with the average in the 12 months following the incentivised hire.
However, the incentive remains valid even in the absence of net growth if the reduction in staff is due to:
- Voluntary resignations
- Verified disability
- Retirements due to reaching pensionable age
- Voluntary reduction in working hours
- Dismissal for just cause (e.g. gross misconduct).
Otherwise, the net job growth requirement must be strictly respected in cases where positions became vacant following dismissals due to workforce reduction.
