Italy 2026 employee benefits tax updates

Italy 2026 employee benefits tax updatesItaly has confirmed a series of employee benefit measures for 2026 that can significantly influence how multinational employers structure total rewards packages for their Italian workforce. These updates mainly refine existing tax incentives rather than introducing entirely new instruments, but they still require careful review of plan design, payroll, and local compliance.

Multinational employers with staff in Italy should review several key employee benefit measures that have been confirmed or updated for 2026.​

1. Fringe Benefits – Tax-Exempt Thresholds Confirmed

For 2026, the tax-exempt limits for fringe benefits have been confirmed:

  • Up to €1,000 per year for all employees
  • Up to €2,000 per year for employees with dependent children (subject to communication to the employer)

These amounts do not constitute taxable income and may include vouchers, utilities reimbursements, insurance covers, and other welfare services.

Please note: fringe benefits are subject to a strict threshold mechanism. If the applicable limit is exceeded by even €1, the entire amount of fringe benefits becomes fully taxable to the employee (not just the excess). Careful monitoring is therefore essential.

2. Healthcare Assistance Funds – Tax-Exempt Contributions Confirmed

Employer contributions paid to registered healthcare assistance funds (integrative health funds) do not constitute taxable income for employees, provided statutory requirements are met. For 2026, such contributions remain tax-exempt up to €3,615.20 per year. Any amount exceeding this threshold is taxable only for the excess, not for the entire contribution.

This makes healthcare funds a highly tax-efficient tool to provide concrete benefits while keeping labor costs under control, often in line with Collective Bargaining Agreement (CCNL) provisions.

3. Meal Vouchers – Increased Tax Exemption

Starting from January 1, 2026, the daily tax-exempt limit for electronic meal vouchers has increased:

  • From €8 to €10 per day (electronic format)
  • The limit for paper vouchers remains unchanged

This measure enhances employees’ purchasing power while preserving full tax efficiency for employers.

4. Complementary Pension Funds – Increased Tax-Deductible Contribution Limit

Starting from the 2026 tax year, the maximum annual amount of contributions to complementary pension schemes that can be deducted from taxable income has increased from €5,164.57 to €5,300. The limit applies to the total of employee and employer contributions and further enhances the tax efficiency of occupational pension arrangements compared to direct salary increases.

5. Performance Bonuses – Stronger Tax Incentive

For qualifying performance and productivity bonuses, the substitute tax rate has been reduced to 1%, subject to specific conditions and collective agreements. This makes variable remuneration an even more effective tool to reward performance while controlling labor costs.

These changes reinforce the value of structuring compensation in Italy around tax‑efficient benefits rather than pure cash salary.

 

This information is provided by De Besi-Di Giacomo, Asinta’s employee benefits consulting partner in Italy. If you need support with your employee benefits in Italy, please contact Asinta, and we will put you in touch with the local experts at De Besi-Di Giacomo.