IRPEF bonus: up to € 1,200 more in paycheck
The government has introduced a reduction in the tax wedge for employee income. At the same time, it implemented an overall revision of taxation on labor. All this thanks to the new IRPEF Bonus in the latest Budget Law. The cut to the tax wedge is a measure eagerly awaited by Italian taxpayers. From this month it will be fully operational for employees with incomes of up to € 40,000.
It will therefore cover over 16 million workers. Employees with an annual income of up to € 28,000 will receive an amount equal to € 600 in paychecks until December. It will reach 1,200 euros for next year. What happens for those who receive employee income from € 28,000 to € 40,000? The latter will enjoy a deduction from the gross tax of a decreasing amount which will be zeroed upon reaching the 40,000 euros per year.
Here are some examples:
An employee with an annual income of 38,000 euros will enjoy a total cut of 192 euros for 2020. Six months of 32 euros starting from 1 July 2020. A worker with an income of over 40,000 euros will have no benefit but will not it will not even have to suffer a tax increase. In summary, for beneficiaries, it will be an average increase in the paycheck of 485 euros in 2020. The sector most impacted by the IRPEF Bonus is the public sector. In particular the school and health sectors.
Over 54% of the total beneficiaries, in fact, work in health and education. In total, the civil servants who will benefit from the reduction of the tax wedge will be around 3 million. It is a tax relief that aims to improve consumption. After the lockdown, in fact, Italians with fixed and stable income have increased their savings capacity. This, however, to the detriment of consumption and, consequently, of tax revenue.