Pay just 5% of Irpef for five years if you are hired on a permanent basis before the age of 30. And, on the other side of working life, having the possibility of retiring at 64. The League returns to put on the table its two proposals for the labor market in view of the 2027 budget law. They were relaunched by the Undersecretary of Labor Claudio Durigon, interviewed by 24 Mattino on Radio 24. The idea is to create a sort of generational turnover: facilitating the entry of young people into stable work and at the same time allowing older workers to leave early.
But the two measures are still very far from being law. And above all, behind the slogans there are conditions and costs that are worth knowing.
How the 5% Irpef would work for those under 30
The proposal on young people is not new. It is contained in the bill first signed by the Northern League MP Luca Toccalini, presented to the Chamber on 14 May 2025. The provision was assigned to the Finance Committee on 30 July of the same year, but the examination never began (and given the tight deadlines of the legislature, it is unlikely to be completed).
The text provides for those under 30 hired with the first stable contract, or for those who move from a fixed-term contract to a permanent one, a substitute tax of Irpef and additional taxes equal to 5% on incomes up to 40 thousand euros gross per year. The discount would last for the year of hiring and for the following four years, therefore a total of five tax periods. The audience estimated in the report on the proposal was approximately 101 thousand young people per year.
The advantage would be very substantial. Today the ordinary Irpef is equal to 23% up to 28 thousand euros, 33% between 28 thousand and 50 thousand and 43% above this threshold. Of course, the actual paycheck comparison depends on employee deductions and personal circumstances, but a replacement rate of 5% would still represent a much larger tax discount than ordinary taxation.
The old proposal also provides a relief for the company: the increase in deductible labor costs would rise to 40%.
However, there is one important detail. The text submitted to the Chamber grants the employer, for these hires, the right to withdraw from the relationship in the first 24 months. After the first 180 days, the worker should be paid an additional allowance equal to three gross months’ wages. A provision that makes the “youth contract” more flexible for the company than what the flat tax announcement alone suggests.
What can change
The Minister of Economy Giancarlo Giorgetti opened to a tax advantage on young people’s wages, but described an at least partly different mechanism: taxing salary increases granted by companies less, rather than necessarily applying 5% to the entire salary. According to Giorgetti, the relief should be accompanied by the willingness of entrepreneurs “to recognize more adequate wages”.
A solution that could cost the State much less than the generalized flat tax envisaged by the Toccalini proposal, and which is more likely to eventually end up in the budget.
Durigon maintains that, once the five years of preferential taxation have expired, the employer should be the one to help the young person grow professionally and therefore increase their salary. But this step is not an obligation under the proposed law. If the gross salary remained substantially unchanged, at the end of the benefit the employee would suddenly return to the normal income tax. The risk is therefore that of creating a “fiscal step”: part of the net increase obtained in the first five years could disappear when the benefit ends, unless the gross salary has increased sufficiently in the meantime.
The other proposal: retirement at 64
The second leg of the project concerns those who are near the end of their career. Today, the possibility of retiring early at 64 mainly concerns fully contributory workers, i.e. those who started paying in 1996. In 2026, at least 20 years of effective contributions and an initial pension equal to at least three times the social allowance are needed, with lower thresholds for workers with children.
The League would like to extend the possibility also to those who have contributions prior to 1996 and therefore fall under the mixed system. In exchange, the worker should accept the recalculation of the entire pension with the contributory method, generally less favorable for those with years covered by the old salary system.
Durigon estimates around 80 thousand additional retirements per year and a cost to the State of the order of 1.5 billion per year, assuming a three-year experiment.
Giorgetti opened the proposal, observing that today there is a difference in treatment between those who started working before and after 1996, but at the same time recalled that any intervention must guarantee the sustainability of pension accounts.
The CGIL has already done the math on the possible consequences: for a worker with 40 years of contributions and 35 thousand euros of salary, the recalculation of contributions would lower the estimated allowance from around 1,726 to 1,543 euros gross per month, 182 euros less, equal to 10.6%. With higher wages the absolute loss would increase.