Significant Growth in Productivity Bonus Contracts: Ministry of Labor Reports 30.7% Increase in One Year, Benefiting Over 2.9 Million Workers

Summary:

The Italian Ministry of Labor and Social Policies has reported a significant increase in contracts that provide productivity bonuses, which have grown by 30.7% within a year. As of January 15, 2024, there are 9,421 active contracts, compared to 7,206 contracts in January 2023, benefiting 2,907,405 workers.

The growth is observed in both company-level contracts (+19.7%) and territorial-level contracts, which have increased from 613 to 1,529 (+149.4%) within the same period. Among the 9,421 active contracts, 7,446 aim to achieve productivity targets, 5,777 focus on improving profitability, 4,752 prioritize quality, 1,023 incorporate a participation plan, and 5,758 incorporate welfare plans for employees.

The average annual value of the productivity bonuses is approximately u20ac1,470.56 per beneficiary. To address taxation, the Italian government has decided to reduce the imputation rate from 10% to 5%, effective from 2023. This incentivizes productivity through Law 197/2022 (Article 1, Paragraph 63) and confirms the change in Law 213/2023 (Article 1, Paragraph 18).

Key points highlighted in this report include:

A 30.7% increase in active contracts providing productivity bonuses.
Benefitting 2,907,405 workers.
Average annual value of productivity bonuses: u20ac1,470.56 per beneficiary.
Reduction in imputation rate from 10% to 5% to incentivize productivity.
* Increased focus on achieving productivity, profitability, quality, participation, and welfare goals.

This report provides an in-depth analysis of the growth and development of productivity bonuses in Italy, with a focus on the government’s efforts to incentivize productivity through taxation.