The special deduction for personnel costs (Super deduzione per nuove assunzioni) is a tax measure designed to promote new hires in Italy. The benefit allows companies and free-lancers to claim a higher amount of the costs for newly hired personnel with permanent labour contracts for tax purposes.
Legal basis and period of validity
The regulation was introduced by Art. 4 of GD 216/2023 in implementation of the framework law on tax reform (Law 111/2023) and initially applied only to the reference year 2024. With the 2025 budget law (Act 207/2024), this measure was extended to the years 2025, 2026 and 2027.
The special deduction normally amounts to 20 per cent of the eligible increase in personnel costs (30 per cent for certain categories worthy of protection) and is claimed in the tax return, tax declaration. This means that the eligible increase in personnel costs is 120% (or 130%) tax-deductible (100% "normal" cost deduction + 20% or 30% special deduction).
The benefit applies to income tax (IRPEF, IRES), but not to value added tax (IRAP).
Affected parties
The special deduction is available to all companies and freelancers who determine their in-come according to the ordinary taxation rules, i.e. analytically. These include:
- Sole traders, partnerships and corporations
- Permanent establishments PE of foreign companies in Italy
- Commercial and non-commercial entities with income from commercial activities
- Freelancers and freelance associations
However, the following are excluded from this benefit:
- Companies and freelancers who calculate their income on a flat-rate basis (e.g. flat tax regime)
- Companies that are in liquidation or insolvency proceedings
- Companies and freelancers who have been in business for less than 365 days in the taxation period prior to applying for the benefit (i.e. in order to be eligible for the benefit for a taxation period, the business must have been established on 1 January of the previous year)
Double eligibility requirements
The following conditions must be met simultaneously in order to claim the special deduc-tion. This is checked annually in comparison with the previous year:
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Increase in permanent employees (incremento occupazionale): The number of perma-nent employees at the end of the preferential taxation period must be higher than the average number of permanent employees in the previous taxation period.
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Increase in total employees (incremento occupazionale complessivo): The total num-ber of employees (permanent and temporary) at the end of the taxation period must be higher than the average number of total employees in the previous taxation period.
The conversion of a fixed-term labour contract, employment contract into a permanent la-bour contract, employment contract is considered a new hire for the purposes of the as-sessment. However, only personnel expenses incurred from the date of conversion are rele-vant for the calculation of the special deduction.
Please note: In the case of groups of companies, the above requirements must also be checked at group level, taking into account only employees employed in Italy.
Calculation of the special deduction
The basis for calculating the special deduction is the lower of:
- the personnel costs for the new permanent employees (including conversions), and
- the increase in total personnel costs for the beneficiary year compared to the previous year.
Personnel costs are defined as the expenses reported in the income statement, profit and loss statement under item B.9 (wages and salaries, social security contributions, employee leaving indemnity (TFR) and other personnel costs). Costs recorded in other P&L items ( ) are not taken into account (e.g. meal vouchers, field service costs, travel expenses, etc.).
The special deduction of 20% or 30% for certain categories worthy of protection is calcu-lated from the assessment basis determined in this way.
Increased benefits for certain categories worthy of protection
For the recruitment of certain categories of employees deserving of greater protection, the special deduction increases by an additional 10 percentage points, i.e. to a total of 30%.
These include people with disabilities, women with at least two minor children who have been unemployed for at least six months and reside in certain regions, and young people who are eligible for certain youth employment incentives.