0.80% INPS Social Security Contribution Exemption for Employees
Updated: June 20, 2022
News Flash No. 22/2022
Subject: 0.80% INPS Contribution Exemption for Employees Whose Employment Ended, Were Hired, and/or Were Re-hired During the Month
As previously announced in our “ News ” newsletter dated January 18, 2022, Budget Law No. 235 of December 30, 2021, in Article 1, paragraph 121, provides—on a trial basis for the year 2022 only—for a 0.80% exemption from the portion of IVS contributions payable by employees.
This exemption from social security contributions applies to all employees of public and private employers, regardless of whether or not the employers are classified as business owners.
The preferential measure applies during the fixed time period specifically predetermined by the regulation in question (January 2022–December 2022), provided that the monthly earnings limit—defined as taxable earnings for social security purposes—of 2,692.00 euros is not exceeded, plus, for the month of December, the accrued portion of the thirteenth-month bonus. As expressly provided by the regulation, the rate used to calculate pension benefits remains unchanged.
Starting with the May 2022 pay stubs, the measure will be implemented and adjustments will be made for the previous months (January 2022 through April 2022).
INPS Circular No. 43/2022 does not provide operational instructions regarding the handling of the various cases.
Pending any further explanatory or operational guidance, the following specific points are highlighted:
1) Employment relationships that ended by April 30, 2022
For employment relationships that had already ended as of April 30, 2022, the adjustments already made will be reopened in order to grant this exemption (if applicable) for past months to employees who are no longer on the payroll. This may result in the need to pay the employee a net amount in their paycheck following the update to their adjustment.
2) Thirteenth-month bonus, in the case of employees whose employment has ended
With regard to the calculation of the exemption on the thirteenth-month bonus paid to former employees, INPS has clarified that former employees will be eligible for the reduction, INPS has clarified that the reduction will be applicable only if the relevant amount does not exceed, in the month of payment, the amount of 224.00 euros (equal to 2,692.00 euros divided by 12).of 224.00 euros (equal to 2,692.00 euros divided by 12).
Therefore, when calculating the accruals for the thirteenth month’s salary, we will verify eligibility for the exemption based on the monthly limit of 224.00 euros for the accrued amounts.
3) Post-termination payments
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