Planned tax relief measures for individuals and employees in Italy in 2026

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1. IRPEF rate cut for middle incomes

The personal income tax (IRPEF) is eased for the middle income bracket:

Rate reduction: the IRPEF rate is lowered from 35% to 33%.

Affected range: the cut applies to income between €28,000 and €50,000.

Example calculation of the expected IRPEF saving in 2026

The maximum relief is calculated on the portion of income falling within the adjusted tax corridor (€28,000 to €50,000), i.e., up to €22,000. The maximum annual tax saving is 2% of €22,000, i.e., €440.

Gross annual income	Total tax 2025 (35 % in bracket 2)	Total tax 2026 (33 % in bracket 2)	Tax saving 2026
€35,000	€28,000 * 23% = €6,440 €7,000 * 35% = €2,450 Total: €8,890	€28,000 * 23% = €6,440 €7,000 * 33% = €2,310 Total: €8,750	€140
€50,000	€28,000 * 23% = €6,440 €22,000 * 35% = €7,700 Total: €14,140	€28,000 * 23% = €6,440 €22,000 * 33% = €7,260 Total: €13,700	€440
€70,000	Tax up to €50,000 = €14,140 €20,000 * 43% = €8,600 Total: €22,740	Tax up to €50,000 = €13,700 €20,000 * 43% = €8,600 Total: €22,300	€440

Note: for higher incomes, the tax saving will likely be partially offset by reduced tax credits/deductions.

2. Measures for wages and benefits

Productivity bonuses: taxation of productivity bonuses is reduced from 5% to 1%. The cap for bonuses subject to this favorable substitute tax rises from €3,000 to €5,000.

Bonus	Old rate	New rate	Saving
€5,000	5% = €250	1% = €50	€200

Night and holiday shifts: the pay components for night shifts and holiday shifts are exempt from tax.

Meal vouchers: the tax-free threshold for electronic meal vouchers for employees increases from €8 to €10.

3. Support for families and social measures

Bonus for female employees (2026): the bonus for female employees with at least two children and income up to €40,000 is strengthened for 2026. It rises from €40 to €60 per month.

ISEE revision: to ease access to certain subsidized benefits, a revision of the ISEE calculation rules (Equivalent Economic Situation Indicator) is introduced, concerning the value of the home and the equivalence scales. The primary residence (within the limit of the cadastral value) is excluded from the ISEE calculation. The overall annual effects of this revision amount to nearly €500 million.

Parental and sick leave: parental leave (congedo parentale) and sick leave for minor children are to be improved.

Renovation bonus (2026): the 50% renovation bonus regime for the first home is confirmed for 2026.

4. Pensions

Pensions for people in need: an increase of €260 per year is envisaged for the pensions of people in difficult circumstances (soggetti in condizioni disagiate).

Retirement age (for strenuous jobs): the increase of three months in the retirement age planned from 2027 will not apply to workers engaged in strenuous and burdensome activities. For the other categories, the increase will be one month in 2027 and two months in 2028.