Among the provisions in the Budget Law to support hiring new staff, the most prominent is the provision allowing what is called a “super deduction” – from business (or self-employment) income – of the increased labour costs from hiring new staff.
The deductibility of labour costs is increased by a percentage equal to 20 per cent, which rises by an additional 10 per cent (to 30 per cent) if the company hires so-called “disadvantaged” workers.
This relief for employee personnel costs is applicable to all types of companies (corporations and partnerships, cooperatives, sole proprietorships) and for professionals.
To use this measure, the following must be met:
- The company must have been active throughout 2024 and no bankruptcy procedures must have commenced.
- The company must have entered into the new open-ended employment contracts in 2024.
- The number of employees on open-ended contracts on 31 December 2024 must be higher than the average number of employees in 2023. Any reductions in staff at subsidiaries or affiliates owned by the company must be included in the calculation.
- The total number of employees (including employees on fixed-term contracts) at 31 December 2024 must be higher than the average number of employees in 2023. Reductions at Group companies do not have to be taken into account.
The amount subject to the super-deduction is equal to the lower amount between the actual costs of the new hires and the total increase in personnel costs in the income statement pursuant to Section 2425(1)(B) (9) of the Italian Civil Code, compared to that of the current financial year ending on 31 December 2023.
The revenue service is expected to issue a circular letter to clarify the various interpretative doubts arising from the reading of the law.
