The “more you hire the less you pay” bonus is a new tax advantage introduced by the government to encourage employment and encourage the creation of new jobs. This incentive offers a large tax deduction for companies that hire permanent staff in 2024. In this guide, we’ll explore in detail what the bonus is, how it works, who can benefit from it, and how
to claim it.
What is the ‘more you hire the less you pay’ bonus
The “more you hire the less you pay” bonus is a tax deduction that applies to companies that hire new permanent employees or transform fixed-term contracts into stable contracts in 2024. The deduction can reach 120% or 130% of labor costs, depending on the categories of workers hired
.
This measure was included in the 2024 tax reform and is part of the package of concessions of the 2024 budget law, with the aim of stimulating employment and encouraging stable recruitment in the labor market.
Who is entitled to the bonus
The “more you hire the less you pay” bonus applies to all companies based in Italy, regardless of their legal form. Beneficiaries include:
- Economic operators and business income holders.
- Professionals, limited companies, partnerships, cooperatives and sole proprietorships.
To be eligible for the bonus, the economic activity must have been carried out in the 365 days prior to the current tax period as of December 31, 2023.
How does the bonus work
The bonus works like a tax deduction on labor costs. To obtain the discount, the employer must demonstrate an actual increase in employment compared to the previous year. This means that the number of permanent employees at the end of 2024 must be higher than in 2023
.
The deduction may be 120% of labor costs, but it can rise to 130% if the hiring involves workers belonging to disadvantaged categories or deserving greater protection, such as people with disabilities, former convicts or women victims of violence.
How much is the bonus
The amount of the bonus depends on the category of workers hired. In general, the benefit is equal to 120% of the worker’s cost, but it can reach 130% for disadvantaged workers or those belonging
to particularly protected categories.
This maxi-deduction has been designed to offer a competitive advantage to companies that contribute to social inclusion and the employment of more vulnerable categories.
How and when to claim the bonus
Currently, it is not yet possible to claim the ‘more you hire the less you pay’ bonus. The procedure for submitting applications and the methods of accessing the facility will be defined by the MEF and the Revenue Agency. However, the bonus will take effect retroactively as of January 1, 2024 and will be applicable throughout the year
.
Interested companies will have to wait for official provisions to start the application process.
