Italy considers 5% flat tax on salary increases for young workers

Italian Economy Minister Giancarlo Giorgetti is considering a 5% flat tax on salary increases granted to young workers as part of the 2027 budget planning. The proposal aims to increase net take-home pay for young employees, help retain talent, and reduce the wage gap within Europe.

Unlike a general tax reduction, this measure would specifically target contractual increments provided by companies rather than the entire salary. Implementing the plan would require coordination between businesses, employers, and financial administrations. The proposal comes amid economic challenges, including rising interest rates and energy costs, which may constrain the overall scope of the 2027 budget maneuver.