Overview
- A circular from the Agenzia delle Entrate implements 2026 Budget measures that cut taxes on specific wage components.
- A 5% substitute tax applies to collective‑bargaining increases agreed for 2024–2026 but paid in 2026 for employees earning up to €33,000.
- Allowances for night, holiday and shift work, including on‑call, are taxed at 15% up to €1,500 a year for workers with incomes up to €40,000.
- Employers will apply the relief automatically unless employees opt out, and those without a withholding agent can claim it in their tax return.
- Initial effects, including arrears adjustments, are expected in April, with roughly 3.8 million private‑sector workers eligible, while public employees and certain pay items such as seniority steps and one‑off vacancy payments are excluded, and the change is described as non‑structural.