Cut taxes, but not for everyone: How tax cuts work in 2024

Wages will also be higher in 2024, but only for some workers who fall into certain income groups. Meloni’s government actually expanded the deduction by including the tax wedge in the fiscal package, thereby reducing the weight of social security contributions on employees’ salaries. The measure also included tax cuts for corporate welfare and a tax cut on performance bonuses: Based on the text of the maneuver seen by Today.it, let’s see how the tax wedge cuts – including the thirteenth – benefits and the lowest tax cut. taxes on performance bonuses, who benefits from them and how much salaries increase.

Tax wedge will also be reduced in 2024

In the second budget law of the Meloni government, the cut in the tax wedge is also confirmed in 2024. Details of the mechanism are included in the 5th article of the measure titled “Partial exemption from social security premiums to be paid by employees”.

The rates are the same as last year but, as stated, the contribution exemption does not apply to all employees: “Exceptionally, for pay periods between 1 January 2024 and 31 December 2024, for employee relations, excluding household relations, the taxable salary determined monthly for thirteen months Provided that it is provided, an exemption of 6 percentage points is granted to the worker-dependent share of social security premiums for disability, old age and widows and orphans, without any effect on the thirteenth installment. In the text of the maneuver, we read the phrase “The monthly amount does not exceed 2,692 euros net, excluding the thirteenth installment.”

Therefore, the 6 percent cut is approved for incomes between 35 thousand and 25 thousand euros, with a net increase of about 44 to 96 euros in the paycheck compared to the cut that the Draghi government wants in 2022, while the 6 percent cut for incomes below 25 thousand euros approved. The “discount” percentage increases to 7 percent, approximately 90-98 euros more: “The exemption mentioned in the first period is increased by a further percentage point, without affecting the thirteenth installment, provided that the taxable salary is determined monthly for thirteen months, the thirteenth installment excluding the monthly net amount of EUR 1,923. Taking into account the exceptional nature of the measure referred to in this paragraph, the calculation rate of social benefits remains unchanged for pensions.” . Therefore the thirteenth remains outside the cut of the wedge and becomes impoverished.

The new threshold of “additional benefits”: how does it work?

The budget law also provides other tax breaks for workers, such as concessions on “benefits” that could increase the net salary reported on the payroll. These are amounts paid by companies to employees as reimbursements (e.g. for household needs or fuel) or even for transferred goods. For 2024, they can reach up to 1,000 euros: this is the threshold set so that they do not constitute a burden on general income and therefore remain tax-free.

The measure is contained in Article 6 of the “Tax measures for corporate welfare” maneuver, where it is stated that the limit has been “increased to 2,000 euros for employees with children, including children born out of wedlock, adopted or adopted children. Article 12 of the Consolidated Income Tax Code Those who find themselves in the conditions specified in the 2nd paragraph of Article 1. Attention: The limit is valid if the employee declares to the employer that he/she has this right by specifying the tax code of his/her children.

Tax reduction on performance bonuses: Who will benefit from this in 2024?

The Meloni government’s maneuver for 2024 envisages halving the tax for performance bonuses or participation in company profits. Article 7 of the budget law states that the replacement tax rate “on amounts paid in the form of performance bonuses or company profit sharing” has been reduced from 10% to 5%.

Previously, performance bonuses from private sector employees who had a fixed-term or permanent employment contract and whose income from employment did not exceed 80,000 euros were taxed at a rate of 10 percent: now this rate increases to 5, provided that the income does not always exceed 80 thousand euros.

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Source: Today IT