The Italian Government introduced Legislative Decree no. 60 of 7 May 2024, published in the Official Journal no. 105/2024, known as Cohesion Decree. This legislation aims to revive entrepreneurship and the youth job market through significant tax incentives.
The decree, effective from 8 May 2024, aims to fill the gaps identified in the 2024 budget law through a series of strategic interventions.
Lower taxes for those under 35
The Cohesion Decree establishes a important contribution relief for employers who hire young people under 35 with permanent contracts. This exemption from paying social security contributions is set at 100% and can be applied for a maximum of three years, until 31 December 2028, for hires made from 1 July 2024 to 31 December 2025.
According to Article 21 of the decree, the contribution exemption applies to employees hired on a permanent basis within the specified period, provided they have not reached 35 years of age at the time of hiring. This advantage does not include Inail premiums and contributions and has a maximum limit of 800 euros per month per worker.
Incentives for entrepreneurship
The decree not only encourages hiring, but also promotesentrepreneurship among young people. Start-ups launched in strategic sectors such as new technologies and the ecological transition can obtain a monthly contribution of 500 euros for three years, managed and paid by INPS in advance of the fiscal year.
Constraints and conditions of the Cohesion Decree
These incentives cannot be cumulated with other contribution reductions or exemptions already provided for by Italian legislation. An interministerial decree will define the criteria and methods of access to these benefits, which also require the approval of the European Commission.
The Youth Bonus again
The Cohesion Decree also reintroduces the Youth Bonus, which allows private employers to benefit from a complete exemption from social security contributions for new permanent hires or for the conversion of fixed-term to permanent contracts, up to a maximum of 24 months and 500 euros per month per employee. This incentive is reserved for young people under 35 and does not apply to domestic work or apprenticeship contracts.
The bonus also extends to individuals over 35 in the Regions of the Special Economic Zone (SEZ) of Southern Italy, provided they have been unemployed for at least twenty-four months.
Women’s Bonus and Zes Bonus
In parallel, the legislative decree implements the “women’s bonus”, which exempts employers from paying social security contributions for workers hired on a permanent basis for a maximum of 24 months, with a limit of 650 euros per month. This incentive is intended for women of all ages, with particular attention to those residing in Southern Italy.
In addition, the “Zes Bonus” aims to stimulate employment in the Special Economic Zones of Southern Italy, offering a 100% contribution relief of up to 650 euros per month for 24 months, intended for employers with up to 10 employees.
These measures are part of a broader Government effort to reduce regional disparities and improve access to work in traditionally less developed areas. The incentives are designed to attract new investments, support start-ups, encourage female employment and integrate often excluded categories into the labor market. Funds which, however, would also have been taken from those for the automotive sector which is undergoing new cuts.
