Tax-Free Thirteenth Salary: Will 2024 Be the Year of Change?

Postponed Delega Fiscale: Detaxation of the Thirteenth Salary

The thirteenth legislative decree of the tax delegation in implementation of the reform has been postponed by a week (if not more).
This decree reintroduces the thirteenth salary without taxes.
The talk about detaxing the thirteenth salary resurfaces, a measure that was also supposed to be implemented last year but was postponed due to lack of resources.

The idea remains the same: to provide tax breaks on the thirteenth salaries for low-income workers.
Today’s discussion on this topic was postponed due to the need for further analysis and the search for resources.
The project has been put on hold, but only temporarily.
Let’s see what happened and what could be expected for 2024.

Detaxation of the Thirteenth Salary as early as 2023

Last year, the detaxation of the thirteenth salary was supposed to be implemented, but the lack of resources forced the government to shelve the project and postpone it to this year.

In 2023, however, the Christmas bonus benefited from a 2% and 3% reduction in contributions due to the cuts in social security contributions that were ongoing in 2022.
In 2023, these reductions were increased to 6% and 7%, but the thirteenth salary was excluded.

Detaxation of the Thirteenth Salary in 2024

The Government is now trying again to implement the detaxation of the thirteenth salary, at least for 2024.
The intervention presents various hypotheses including:

– €80 for all workers with income up to €35,000;
– €100 limited to families with at least one dependent child and income up to €28,000.

The alternative would be the one provided by the tax delegation, which foresees a separate taxation for the thirteenth salary with a substitute tax.
The intervention should also include productivity bonuses, which, together with the extra December salary, may not be subject to personal income tax (Irpef), but taxed at 5% or 10%.

The Issue Lies in Resources

As with every decision the Government has to make, the issue lies in finding the necessary resources.
Criticisms from the Bank of Italy towards the superbonus persist.
The exorbitant costs of the measure complicate the management of public accounts and will continue to have negative effects in the coming years.
The revenues will never be able to offset the expected deductions for the work carried out, and the only solution would be to immediately stop the measure, without letting the effects of 2024 and 2025 add to those of the past.

It was not enough to curb the transfer of credit and invoice discounts, and for the Bank of Italy, the only solution is to stop the superbonus before the original deadline (December 31, 2025).
All this, of course, in view of the fact that there will still need to be assistance to families in the redevelopment of properties to meet the obligations imposed by the green building directive.
However, the recognized rates will never be 100%, as provided by the Superbonus in past years, but it is thought to allocate state aid to low-income families and only for primary residences.