In the Italian legal and economic landscape of 2026, incentive plans have transcended their traditional role as supplementary rewards to become a fundamental pillar of the total remuneration strategy.

The evolution of the regulatory framework, particularly following the expansive interventions of the Legge di Bilancio 2026 (Law No. 199/2025), has solidified a dual-track system: performance-based cash incentives for the broader workforce and sophisticated equity-based instruments for executive retention.

At present, the most widespread incentive mechanisms are agreements providing—under company or territorial collective agreements—for the payment of Performance Bonuses (Premi di Risultato) paid by the employer to its employees upon the achievement of specific, measurable, and incremental objectives.

Performance Bonuses (Premi di Risultato): The 2026 Fiscal Regime
As regards tax treatment, Performance Bonuses for employees in the private sector have undergone a radical fiscal transformation. Regulated originally by Law no. 208/2015 (Stability Law 2016), the regime has been aggressively optimized by Article 1, paragraphs 8-9 of the Legge di Bilancio 2026.

For the tax years 2026 and 2027, the preferential substitute tax rate has been reduced to 1%. This represents a significant legislative pivot from the 5% rate applicable in the 2023-2025 period and the statutory 10% rate originally envisaged. This 1% flat tax replaces the ordinary Personal Income Tax (IRPEF), which operates on progressive brackets ranging from 23% to 43%, as well as regional and municipal surcharges.

Operational Parameters for 2026:

Tax Rate: 1% substitute tax (imposta sostitutiva).

Monetary Cap: The maximum gross amount eligible for this relief has been elevated to €5,000.00 per year (previously €3,000.00). This cap is inclusive of any portion of the bonus the employee chooses to convert into welfare services.

•  Income Requirement: The relief is restricted to private-sector employees who earned a gross employment income of not more than €80,000.00 in the year preceding the payment (i.e., income earned in 2025).
• Conditionality: The application of the 1% rate is strictly contingent upon the execution of second-level collective bargaining agreements (company or territorial) that establish incremental goals in productivity, profitability, quality, efficiency, or innovation. These agreements must be filed electronically with the Territorial Labour Inspectorate (ITL) within 30 days of signing.
  The amounts on which the said tax (“substitute tax”) is applied do not contribute to the formation of one’s total income. Consequently, they are generally not relevant for determining deductions commensurate with total income, such as deductions for family loads or deductions for income from employment. Since these latter deductions are calculated in decreasing proportion to total income, excluding the bonus from the total income base effectively allows the employee to qualify for higher deductions on their ordinary salary.

Corporate Welfare (Welfare Aziendale)

Another form of incentive is the so-called “company welfare“, which consists of services, works, and benefits paid to the employee in kind or in the form of reimbursement of expenses, having purposes of social importance, excluded from employment income.

Law no. 208 of 2015 and subsequent amendments, culminating in the structural stabilizations of the Legge di Bilancio 2026, have extended the hypothesis of amounts and values that do not contribute to the determination of the income of employees, through a systematic intervention of Article 51 of the Consolidated Income Tax Act (“TUIR”).

In particular, the 2026 Budget Law has confirmed the enhanced “Fringe Benefit” regime for the triennium 2025-2027. The tax and social security contribution exemption threshold for fringe benefits is currently set at:

•  €1,000.00 for the generality of employees.
• €2,000.00 for employees with fiscally dependent children.

Expanded Scope of Article 51, Paragraph 4: Crucially, for the 2026 tax year, the legislator has maintained the inclusion of specific household expenses within these exemption limits. The basket of non-taxable welfare now includes:

1. Domestic Utilities: Reimbursement of expenses for integrated water services, electricity, and natural gas.
2. Housing Costs: Reimbursement of rent for the employee’s main residence or interest on mortgage loans for the main residence.

This inclusion transforms the nature of “welfare” from supplemental perks to essential income support, effectively allowing employers to subsidize housing costs tax-free up to the applicable threshold.

Summary of Article 51 TUIR Exclusions (2026): The amounts and values excluded from income can be summarized as follows:

Services and Works (Art. 51, paras 2 and 3 TUIR):

• Payment of contributions to supplementary pension schemes (deductible up to €5,164.57).
• Payment of health care contributions to bodies or funds whose sole purpose is to provide care services (up to €3,615.20).
• Meal Vouchers: The daily exemption threshold for electronic meal vouchers has been increased to €10.00 (from €8.00) starting Jan 1, 2026, while paper vouchers remain at €4.00.
• Use of transport services or purchase of local, regional, or interregional public transport passes.
• Use of works and services for education, training, recreation, social and health care or religious purposes, for the attendance of recreational centers, summer/winter camps, and scholarships.
• Use of care services for elderly or dependent family members.
• Payment of contributions or premiums to cover the risk of non-self-sufficiency in the performance of daily activities or those relating to the risk of serious illness.
• Allotment of shares in the company/employer or group companies (specific exemption up to €2,065.83 under Art. 51, para 2, letter g).

Conversely, incentive plans based on share options, share acquisition, or share purchase are generally not used on a large scale for the entire workforce in Italy due to administrative complexity, but are highly prevalent for executive management. The applicable tax regime, while no longer offering the preferential rates of the pre-2008 era, still provides significant social security advantages.

Employees of medium/large-sized multinational companies are frequently remunerated through stock incentive plans aimed at encouraging retention and aligning management interests with shareholder value. This phenomenon, while originating in Anglo-Saxon jurisdictions, is now a structural component of the Italian executive compensation landscape.

In particular, Stock Option plans are most widely used in this area. In our legal system, stock options are governed by Article 2349 of the Italian Civil Code, entitled “shares and financial instruments in favor of employees”, and by Article 2441 of the Italian Civil Code, which provides for the exclusion of the pre-emptive right of option for shareholders to facilitate employee plans.

Structure of Stock Option Plans: As mentioned above, Stock Option plans are a tool for rewarding and retaining the loyalty of the beneficiary workforce (employees or directors) considered strategically important for the company. Through the assignment of Stock Options, the company offers an employee the right (option) to acquire his/her own shareholding, or that of another company belonging to the same group, in a predetermined future period and at a fixed price (“strike price”), usually equal to the value of the shares at the time of the offer itself.

The following key moments can be distinguished in a stock option plan:

1. Granting of the option right: The moment when the beneficiary receives the right to purchase shares in the future. At this time, the strike price is fixed. Under Italian tax law, the grant is generally a non-taxable event.
2. Vesting Period: The period from the grant to the initial term for exercisability. This creates the “retention” effect.
3. Exercising: The date on which the option right is actually exercised, and the share is acquired. This is the taxable event for employment income tax purposes.

This is the basic structure of a stock option plan, which must be specifically governed by Regulations that the Companies are required to finalize and approve to define specific conditions, such as:

• Capital increase to service the plan.
• Non-transferability of options inter vivos.
• Performance conditions (vesting subject to EBITDA, TSR, or ESG targets).
• Maximum life period of the plan (expiry).
• Good/Bad Leaver provisions: Limiting exercise in the event of termination of employment (see Question 10).

Tax Regime (2026 Update): The specific tax relief for stock options governed by Article 51, paragraph 2, letter g-bis) of the TUIR was repealed by Decree Law No. 112 of 2008. Consequently, for the 2026 tax year, the difference between the normal value of the shares at the time of exercise and the strike price paid by the employee constitutes employment income (reddito di lavoro dipendente).

• Taxation: This spread is subject to ordinary IRPEF rates (23%, 33%, 43%).
• Social Security Exemption: Crucially, this spread remains exempt from social security contributions (INPS), provided that the strike price was at least equal to the fair market value of the shares at the grant date. This exemption makes Stock Options significantly more tax-efficient for the employer compared to cash bonuses, saving approximately 29-30% in employer contributions. Deductibility for IAS/IFRS Adopters (New for 2026): A significant change introduced by the 2026 Budget Law concerns the corporate deductibility of stock option costs for companies adopting IAS/IFRS standards. Under Article 32 of the 2026 Budget Law, the tax deduction for costs related to stock option plans (both equity-settled and cash-settled) is now strictly aligned with the cash principle.
• Rule: Costs are deductible only in the tax period in which the shares are assigned (exercise) or the cash is paid.
• Impact: This eliminates the possibility of deducting the IFRS 2 accounting charge during the vesting period based on the accrual principle. Companies must now defer the tax shield until the actual economic transfer to the employee occurs.

Broad-Based Share Plans (Art. 51, para 2, letter g, TUIR): No changes were made to the tax rules governing shares assigned to the generality of employees pursuant to Article 51, paragraph 2, letter g) of the Consolidated Income Tax Act. Therefore, the value of shares offered to employees is excluded from the calculation of dependent employment income provided that:

• The shares are offered to the generality of employees.
• The total value does not exceed €2,065.83 for each tax period.
• The shares are not repurchased by the issuing company or the employer or otherwise disposed of before at least three years have elapsed since the assignment.
•  If this threshold is exceeded, the excess alone is subject to taxation (unlike the €1,000/€2,000 fringe benefit threshold, which functions as a “cliff”).

The attribution of remuneration based on financial instruments may take place through different methods of recognizing variable remuneration. These modalities differ according to the type of instruments or rights assigned and the delivery mechanism.

Stock Grants (Free Shares): In this model, shares are granted to the employee for free (zero strike price).

• Taxation: The entire normal value of the shares at the time of delivery constitutes taxable employment income.
• Usage: Often used for top executives where the certainty of value delivery is preferred over the leverage of options.
  Restricted Stock Units (RSUs): RSUs are a promise to allot shares at a future date, subject to vesting conditions (time-based or performance-based).
• Deferral: Unlike Stock Grants, RSUs provide a deferral of taxation until the actual delivery of the shares (vesting).
• Dividend Equivalents: This mechanism generally does not allow the beneficiary to benefit from dividends paid during vesting, unless “dividend equivalent” rights are explicitly granted (which would be taxed as cash bonuses).
  Employee Stock Purchase Plans (ESPP): Common among US multinationals operating in Italy, ESPPs allow employees to purchase shares, often through payroll deductions, at a discounted price (e.g., 15% discount).
• Taxable Benefit: The discount (difference between market value and purchase price) is a taxable fringe benefit.
• Exemption: If the discount value falls within the annual fringe benefit exemption (€1,000 or €2,000 for 2026), it may be tax-free.

In addition to equity-settled plans, Italian companies frequently utilize cash-settled instruments that mimic equity performance without diluting share capital.

Phantom Stock: These are compensation plans based on financial instruments that do not provide for the physical delivery of the instrument but of a differential amount in cash. The employee receives a bonus equivalent to the value of the shares (or the appreciation thereof) at the vesting date.

• Tax Treatment: Phantom stock payouts are treated as ordinary cash remuneration. Unlike actual stock options, they are fully subject to social security contributions (INPS). This makes them approximately 30% more expensive for the employer than a compliant Stock Option plan delivering the same gross value.
  Stock Appreciation Rights (SARs): SARs give the right to obtain the differential variation (appreciation) of the value of a certain number of shares over a certain period of time.
• Mechanism: Similar to Stock Options, but settled in cash.
• Taxation: Taxed as ordinary income (IRPEF + INPS) at the time of payout. They do not benefit from the 26% capital gains tax rate that applies to the sale of shares acquired via real options.

Long-Term Incentive Plans (LTIPs – Cash): Pure cash bonuses deferred over 3-5 years, linked to strategic KPIs (e.g., EBITDA growth, ESG targets).

• Taxation: Taxed as ordinary income in the year of receipt. They may qualify for separate taxation (tassazione separata) if the deferral aligns with specific legal criteria for “arrears,” but typically they are taxed at standard marginal rates.

The framework of an incentive plan may be designed for employees only or management, but specific tax relief regimes impose strict eligibility criteria.

Performance Bonuses (1% Tax Relief): For the 2026 tax year, the preferential 1% substitute tax applies only if specific subjective and quantitative limits are met:

•  Employer: Reserved for the private sector (public administrations are excluded).
• Employee Income Cap: The beneficiary must have earned income from employment of not more than €80,000 in the year preceding the bonus payment (2025). This threshold is a “cliff”; earning €80,001 disqualifies the employee entirely.
• Bonus Cap: The relief applies to a maximum gross bonus of €5,000.
• Qualitative Requirement: The bonus must be linked to incremental productivity, profitability, quality, efficiency, or innovation goals verified under a second-level collective agreement.

Corporate Welfare (Fringe Benefits):

• Universality: To avoid being treated as taxable income under Art. 51(2) TUIR, welfare plans must be offered to “all employees” or “categories of employees.” Ad personam grants are fully taxable.

Quantitative Limits (2026):

• €1,000 for employees without dependent children.
• €2,000 for employees with dependent children.
• Cliff Risk: If the value of benefits exceeds these thresholds (e.g., €2,001), the entire amount becomes taxable, not just the excess.

Calculation of the €80,000 Income Limit: For the purposes of the performance bonus relief, the €80,000 limit takes into account employment income subject to ordinary taxation earned in the previous year. It includes income from multiple employment relationships and pensions but excludes:

• Income subject to separate taxation.
• Performance bonuses converted into non-taxable welfare benefits in the previous year.

Yes. Awards can be made subject to performance criteria, vesting schedules, and forfeiture, and this is regulated by agreement between the parties.

• Performance Criteria: For the 1% tax relief on cash bonuses, performance criteria are mandatory. They must be “uncertain” (aleatori) and “incremental” (showing improvement over a baseline).
• Vesting Schedules: Standard in LTI plans (typically 3 years).
• Forfeiture (Clawback/Malus): Italian law allows for “Bad Leaver” provisions (forfeiture upon resignation or dismissal for cause). However, Clawback clauses (demanding return of amounts already paid) are subject to closer judicial scrutiny. They are generally enforceable if linked to:
  • Conduct that caused significant financial loss.
  • Fraud or gross negligence.
  • Restatement of financial statements revealing that performance targets were not genuinely met.
  • Violation of non-compete covenants.

The consequences vary significantly by instrument type, especially following the 2026 reforms.

Stock Options and Equity Plans

After the repeal of the favorable regime in 2008, stock options are treated as fringe benefits at exercise.

Tax Base: The difference between the normal value (fair market value) of the shares at exercise and the strike price paid by the employee constitutes employment income.
Taxation: This amount is subject to IRPEF at ordinary progressive rates.

1. 2026 IRPEF Brackets:

• 23% up to €28,000.
• 33% (reduced from 35%) from €28,000 to €50,000.
• 43% over €50,000.

2. Surcharges: Regional and municipal add-ons apply (approx. 2-3%).

Social Security: The specific exemption remains: the spread is not included in the social security contribution base (Art. 82, para 24-bis, DL 112/2008), provided the exercise price was not lower than the market value at grant.

Capital Gains: Upon subsequent sale of the shares, the gain (Sale Price minus Normal Value at Exercise) is taxed as a capital gain (reddito diverso) at a flat rate of 26%.

Performance Bonuses (Cash)

•  1% Substitute Tax: For 2026, qualifying bonuses (up to €5,000, income < €80k) are taxed at a flat 1%. This tax replaces IRPEF and surcharges.
• Waiver Option: The employee can expressly waive this regime in writing (e.g., to utilize tax deductions that require higher taxable income), defaulting to ordinary taxation.
• Social Security: The employee pays the standard rate (approx. 9.19%) on cash bonuses. However, decontribution measures (see Question 8) may apply.
  Corporate Welfare
• Exemption: Benefits under Art. 51(2) and (3) TUIR (within the €1,000/€2,000 limits) do not contribute to income. Therefore, they are free of IRPEF and social security contributions for the employee.

New 15% Flat Tax (Overtime/Night Work)
For the 2026 tax year, a 15% substitute tax applies to gross earnings derived from overtime, night work, and holiday work for private-sector employees with a 2025 income not exceeding €40,000. The maximum eligible amount is €1,500.

Social Security (INPS)

• Stock Options: The company benefits from a total exemption from employer social security contributions (approx. 29-32%) on the spread, provided the plan meets the conditions (strike price ≥ market value at grant). This makes equity compensation significantly cheaper than cash.
• Cash Incentives: Generally subject to full employer contributions.
• “Decontribuzione” for Performance Bonuses: A specific relief exists under Art. 1, paragraph 189 of Law 208/2015. For companies that involve employees equally in the organization of work (coinvolgimento paritetico), a 20 percentage point reduction applies to the employer’s contribution rate on a portion of the bonus not exceeding €800. On the same quota, no contribution is due from the employee.

Corporate Tax Deductibility (IRES)

• General Rule: Costs for employee remuneration are deductible.
• IAS/IFRS Companies (2026 Update): Under Art. 32 of the 2026 Budget Law, the deductibility of costs for stock options (equity or cash-settled) is now deferred to the tax period of payment/assignment. This removes the possibility of deducting the accounting cost accrued during the vesting period, aligning tax deduction with the financial manifestation of the benefit.

  New “Tax Wedge” Mechanism (2026)

The 2026 Budget Law replaces the previous “contribution exemption” (esonero contributivo) with a fiscal deduction mechanism to reduce the tax wedge for employees:

• Incomes ≤ €20,000: Employees receive a non-taxable “bonus” sum (7.1% – 4.8% of income).
• Incomes €20,000 – €35,000: Employees benefit from an additional fiscal deduction (fixed at €1,000 up to €32k, then decreasing). This shifts the administrative burden to the tax calculation phase rather than the social security contribution phase.

Securities Law (TUF): Information to be given to the market on the allocation of financial instruments to company representatives, employees, or collaborators is governed by Article 114-bis of Legislative Decree no. 58/1998 (TUF).

• Approval: Remuneration plans based on financial instruments must be approved by the ordinary shareholders’ meeting.
• Reporting: The issuer must make available a report detailing the plan’s rationale, beneficiaries, vesting conditions, and implementation methods.
• Scope: Applies to listed issuers and issuers of financial instruments widely distributed to the public.

Performance Bonuses (1% Tax Relief): To apply the 1% substitute tax and the social security relief, the employer must:

• File the Agreement: The company or territorial collective agreement must be filed electronically with the Territorial Labour Inspectorate (ITL) via the Cliclavoro portal within 30 days of signing.
• Declaration of Compliance: The filing must be accompanied by a self-declaration attesting that the agreement complies with the legal requirements for incremental productivity goals.

Fringe Benefits (Certificazione Unica):

• Declaration for €2,000 Limit: To apply the higher €2,000 exemption for 2026, the employer must collect a written declaration from the employee indicating the fiscal codes of dependent children. Without this declaration, the employer must apply the standard €1,000 limit.
• Reporting: The value of fringe benefits must be distinctly reported in the Certificazione Unica (CU), separating amounts under the general limit from those under the parental limit.

Stock Options/LTIs: Generally, no. Plan rules typically stipulate that unvested options or rights lapse immediately upon termination of employment.

• Bad Leaver: (Resignation, dismissal for cause) -> Total forfeiture.
• Good Leaver: (Death, disability, retirement, redundancy) -> Plans may provide for pro-rata vesting or an extended exercise window for vested options.
• Case Law: Italian courts generally uphold “Bad Leaver” forfeiture clauses. However, if the dismissal is declared unlawful by a court, the employee may claim damages for the lost opportunity to exercise options, quantified based on the probability of vesting.

Performance Bonuses: These are typically paid pro rata temporis if the employment terminates during the performance period, unless the agreement explicitly requires “presence at the date of payout” (a clause which is valid but subject to scrutiny if used to deny accrued rights).

Data processing related to incentive plans is governed by the GDPR and Italian data protection laws.

• Transparency: Employees must be informed (Privacy Notice) about how their data is processed for plan administration.
• International Transfer: For multinational plans where data is sent to a parent company outside the EU (e.g., USA), appropriate safeguards (Standard Contractual Clauses – SCCs) must be in place.
• Purpose Limitation: Data collected for the plan cannot be used for other purposes (e.g., behavioral monitoring) without a separate legal basis.

For listed companies, the Corporate Governance Code (2020) and Article 123-ter TUF apply:

• Remuneration Policy: Must be approved by the Shareholders’ Meeting (binding vote on the policy, advisory on the report).
• Committee: A Remuneration Committee (majority independent directors) must propose the policy.
• Structure:
  • Balance between fixed and variable components.
  • Performance objectives linked to long-term sustainability.
  • Vesting periods (recommended min. 3 years).
  • Clawback clauses are effectively mandatory.
  • Share ownership guidelines for executives.

Prospectus Regulation (EU 2017/1129): Offers of securities to employees are generally exempt from the obligation to publish a Prospectus if:

• The offer is addressed to fewer than 150 persons per Member State; OR
• The total consideration in the EU is less than €8,000,000 over 12 months; OR
• Specific Employee Exemption: The offer is made to existing or former employees/directors, provided that a document containing information on the number and nature of the securities and the reasons for and details of the offer is made available (Information Document).

For Stock Option plans in listed companies, Article 114-bis TUF requires the publication of an Information Document containing detailed plan rules, to be made available to the public before the Shareholders’ Meeting.

Banking and Finance:

• CRD V / Bank of Italy Circular 285: Strict caps on the ratio between variable and fixed remuneration (usually 100%, or 200% with shareholder approval).
• Deferral: 40-60% of variable pay must be deferred for 3-5 years (or more for top management).
• Instruments: At least 50% of variable pay must be in shares or share-linked instruments.
• Malus/Clawback: Mandatory.
• Insurance: —
• Solvency II / IVASS Reg. 38: Similar principles apply, requiring alignment of incentives with the company’s risk profile and long-term stability.

There are no direct exchange control restrictions preventing the operation of plans. However, fiscal monitoring obligations apply:

• RW Form: Italian tax resident employees who hold investments abroad (shares, vested options, foreign bank accounts) must report them in the RW section of their annual tax return.
• IVAFE: A wealth tax (0.2%) applies to the value of financial assets held abroad.

1. Design: The Board of Directors (via Remuneration Committee) designs the plan.

2. Authorization: For equity plans, the Shareholders’ Meeting must approve the plan (Art. 114-bis TUF) and authorize any necessary capital increase or share buy-back.

3. Adoption: The Board adopts the specific Regulations and identifies beneficiaries.

4. Grant: The company sends a Grant Letter to the employee.

5. Acceptance: The employee signs the Acceptance Form.

6. Filing (Bonuses): For the 1% tax relief on cash bonuses, the agreement must be filed with the ITL via Cliclavoro within 30 days.

Yes. It is common for Italian subsidiaries to participate in global plans operated by a foreign parent.

• Withholding Agent: The Italian subsidiary must act as a withholding agent (sostituto d’imposta) for the taxable income arising from the plan (even if shares are delivered directly by the parent).
• Recharge Agreement: To ensure the cost is deductible for the Italian entity (IRES), there must be a written inter-company agreement whereby the Italian subsidiary reimburses the parent for the cost of the shares/options granted to its employees. This recharge substantiates the cost as a personnel expense.

Yes. Participation is not restricted by nationality.

• Taxation: Depends on tax residency.
• Residents: Taxed on worldwide income.
• Non-Residents: Taxed on the portion of income derived from work performed in Italy (source rule).

Italy follows the OECD Model principles.

Sourcing Rule: Employment income from stock options/RSUs is sourced based on the workdays spent in Italy during the vesting period relative to the total vesting period.
• Formula: (Italian Workdays / Total Vesting Days) × Gain at Exercise = Italian Taxable Income.

Double Taxation: If the employee is taxed in another country on the same income, Italy grants a foreign tax credit (Art. 165 TUIR) or exemption under the relevant Double Tax Treaty.

Similar to equity, cash incentives are taxed in Italy to the extent they relate to activities performed in Italy.

Payment: If paid by an Italian withholding agent, the full amount is typically subjected to withholding. The employee must then file a tax return to claim a refund or credit for the portion allocable to non-Italian workdays, or to pay taxes if they have become tax resident in Italy on worldwide income.

1. Maximization of Welfare: With the stabilized €1,000/€2,000 thresholds including rent and mortgages, companies are aggressively restructuring compensation packages to utilize this “tax-free cash” equivalent, effectively increasing net pay without raising gross salary costs.

2. Sustainability (ESG) KPIs: Performance bonuses are increasingly linked to ESG metrics (e.g., emission reductions, diversity targets) to meet the “innovation” requirement for the 1% tax relief and align with corporate strategy.

3. Inflation Hedging: The use of the 1% tax rate on bonuses and the 15% flat tax on overtime is being prioritized as a mechanism to deliver net income growth to employees in an inflationary environment, limiting the permanent impact on fixed labor costs (RAL).

4. Digitization of Meal Vouchers: The shift to electronic vouchers is accelerating due to the increased exemption (€10 vs €4).

The 2026 Budget Law has set a stable course for the triennium, but several implementation aspects will be critical in the next 12 months:

Implementation of the 1% Bonus Tax: We expect strict audits by the Revenue Agency to verify the “incremental” nature of performance goals. Companies must ensure their KPIs are genuinely variable and not disguised salary.

IAS/IFRS Deductibility: The shift to cash-basis deductibility for stock options will require IAS adopters to adjust their tax forecasting and deferred tax asset calculations in 2026 financial statements.

Tax Wedge Transition: The shift from social security exemption to fiscal deduction for the tax wedge cut (incomes < €40k) will require significant payroll software updates and communication to employees to explain changes in their payslips, even if the net result aims to be neutral or positive.