0.80% INPS contribution exemption for employees

News Flash No. 22/2022

Subject: 0.80% INPS contribution exemption for employees who left, were hired, and/or rehired during the month

As previously announced in our News January 18, 2022, Budget Law No. 235 of December 30, 2021, in Article 1, paragraph 121, provides for a 0.80% exemption from IVS contributions payable by employees, on a trial basis for the year 2022 only.

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 set forth in the regulation in question (January 2022–December 2022), provided that the monthly income limit—defined as taxable income for social security purposes—of €2,692.00 is not exceeded, increased, for the month of December, by the accrued amount 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 paychecks, 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 guidelines regarding the handling of various cases.

Pending further explanatory and operational guidance, please note the following details

1) Employment relationships terminated 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 apply this exemption (where applicable) to former employees for past months. This may result in the need to pay the employee a net amount in their paycheck following the update of their adjustment.

2) Thirteenth-month bonus for former employees

With regard to the calculation of the exemption on the thirteenth-month bonus paid to former employees, the INPS has clarified that former employees will be eligible for the reduction only if the relevant amount does not exceed, in the month of payment, the amount of €224.00 (equal to €2,692.00 divided by 12).of €224.00 (equal to €2,692.00/12).

Therefore, when calculating the accruals for the thirteenth-month bonus, eligibility for the exemption will be verified based on the monthly limit of €224.00 for the accrued amounts.

3) Post-termination payments

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