Italy caps merit bonuses for public‑sector employees at 30%

The Italian government approved a new public‑administration reform, known as the "DDL Merito," which was published in the Official Gazette on 2 July 2026. The law introduces a merit‑based pay component for civil servants, linking the variable part of salaries to performance evaluations. Only up to 30 % of employees in any office can receive the highest performance scores, and the annual "excellence" bonus may be awarded to at most 20 % of those top‑scorers, effectively limiting the bonus to about 6 % of staff. The reform also redistributes funds saved from lower manager bonuses to increase the pool available for rewarding non‑managerial employees. Minister for Public Administration Paolo Zangrillo highlighted that the measure aims to place merit at the centre of the public sector and to foster a culture of genuine performance assessment.

The new system replaces the previous practice where nearly all employees were routinely placed in the highest evaluation band, a situation criticised by the Court of Auditors. By setting clear caps and more selective criteria, the law seeks to encourage measurable results, problem‑solving and innovation across Italy's roughly 10 000 public administrations.