• Insights

Employee benefits in Italy: a versatile toolkit for employers

Written by
Toffoletto de Luca Tamajo, working in employment law since 1925.
A Ius Laboris survey reveals the ways in which employee benefits packages are increasingly seen by employers as presenting opportunities for tax savings and for employee’ retention and attraction. This article gives a perspective from Italy.  

Italian law does not provide a definition of company ‘welfare’, or employee benefits. It consists in services and goods provided by the employer to employees on top of their normal salary to support their purchasing power and to improve quality of their private and familiar life, since the value of these services and goods is not included in employees’ income for taxes and contribution purposes.

The regulatory evolution of recent years has boosted a change in welfare plans in business. They are no longer seen only as a system of goods and services with primarily social utility, but also as a new and, if used correctly, highly effective lever of organisational innovation.

In particular, starting from the 2016 Budget Act, concrete and favourable tax measures have been introduced for the corporate welfare system, including it among the tools provided for by the legislator to encourage companies’ productivity. At the same time, the Italian social partners have changed their view and started to consider welfare as a part of employees’ total reward package.

Italian companies (of all sizes and in different sectors) are focusing on corporate welfare plans, often investing large amounts of capital.

On the other hand, unions are also taking part in this process: the number of National Collective Agreements that expressly provide for measures to support welfare company is on the rise.

A Ius Laboris’s survey collected information on the types of goods and services provided by employers through welfare plans in different jurisdiction across the world.

In Italy, for example, companies may include employees’ education’s costs (all types of schooling, from nursery school to university, school canteens, after and before school care, summer and winter camps, school textbooks etc.) in their welfare plans. They can also include costs related to care services for the elderly (over 75) and for non-self-sufficient family members with a medical certificate. Passes for public transport and for recreational activities (including, for example, gym passes, travel passes, training courses etc.) and vouchers for online e-commerce platforms can also be recognised as rewards for employees within a welfare plan.

The increase in the average amount per capita of welfare credit (which stood at around EUR 600 in 2017 and almost EUR 800 in 2018) and the varied allocation of expenditure of this credit confirm that these types of welfare measures are appreciated.

A company’s welfare plan can represent a benefit for both companies and employees.

For employees, it is a saving opportunity, a support for personal and family needs and a concrete lever for inclusion in a business vision that pays attention to employees’ needs.

For the company, a successful welfare plan can be not only an opportunity for tax savings but also a strategy to promote employee retention and attraction, showing them a real business community in which there are shared goals, commitments and common satisfaction and improvement of performance.

Emanuela Nespoli
Partner - Italy
Toffoletto De Luca Tamajo
Diego Pacello
Diego Paciello
Toffoletto De Luca Tamajo