The Italian Budget Law for the year 2021 (Law 30 December 2020, No. 178) introduced several measures to promote stable employment of women and young people by including a reduction of social security contributions to INPS (Istituto Nazionale della Previdenza Sociale) for employers hiring women, individuals age 35 and under, and individuals located in areas experiencing pandemic related hardship.
The new reductions entered into effect on 1 January 2021.
New hires age 35 and under
Employers hiring individuals age 35 and under are entitled to a reduction of social security contributions of up to 100% with a maximum amount of EUR 6,000 per year, excluding contributions to the National Insurance for Labor Accidents (INAIL). Social security contribution levels can reach approximately 25% on salaries, up to EUR 103,055. The social contribution discount applies for a three-year period and only to new hires with an open-ended (also called permanent) employment contract who have never been employed in any company under such a contract. Employers transforming an employee’s fixed-term contract to an open-ended contract in the years 2021 and 2022 will also be entitled to the new discount.
The reduced contribution rates apply only to employers who have not dismissed individuals for objective reasons or collectively dismissed similarly qualified workers in the same production unit in the six months prior to the recruitment of eligible individuals or in the nine months following it.
New hires in areas experiencing pandemic-related hardship
Discounted social contributions apply until 2029 for new hires under age 55 in companies located in Abruzzo, Molise, Campania, Basilicata, Sicilia, Puglia, Calabria, and Sardegna. Current contributions will be discounted by:
- 30% of standard social security contributions to be paid by the employer until 31 December 2025
- 20% of standard social security contributions to be paid by the employer for the years 2026 and 2027
- 10% of standard social security contributions to be paid by the employer for the years 2028 and 2029
Female new hires
Employers hiring women in the years 2021 and 2022 will be entitled to a total exemption from the payment of social security contributions paid by the employer, excluding contributions to INAIL.
It applies to female new hires who have been unemployed for at least 24 months; six months if the company is located in Abruzzo, Molise, Campania, Basilicata, Sicilia, Puglia, Calabria, and Sardegna.
Employers are entitled to a reduction of social security contributions of up to 100% with a maximum amount of EUR 6,000 per year for 18 months for hiring women under an open-ended employment contract or for transforming a fixed-term to an open-ended employment contract.
The reduction only applies for 12 months for female new hires under a fixed-term employment contract.