Performance bonuses: favourable threshold rises to €5,000

Pay and Benefits
Performance Bonuses and Corporate Welfare: Favourable Threshold Rises to Euro 5,000, Including for Benefits
Italian Revenue Agency

The Italian Revenue Agency has issued clarification on the application of the changes introduced by the 2026 Budget Law in relation to productivity bonuses and profit-sharing schemes. The issue concerned the coordination between the new favourable threshold provided for such sums and the option, available to the worker, of converting them into corporate welfare benefits.
The rules applicable for 2026 and 2027 provide for a significant reduction in the taxation applicable to performance bonuses, accompanied by an increase in the maximum favourable amount from Euro 3,000 to Euro 5,000. Doubts had nonetheless arisen as to whether this new threshold could also apply where the worker chooses to receive, in place of the cash bonus, corporate welfare goods and services.
According to the Agency, the answer is in the affirmative. The option to convert the bonus into a benefit forms an integral part of the same favourable scheme and must be read consistently with the amendments introduced by the Budget Law. It follows that the new ceiling of Euro 5,000 also applies where the worker opts to receive the bonus in the form of corporate welfare, without prejudice to the specific limits applicable to individual benefits.
The clarification broadens interest in welfare instruments and offers companies greater scope to structure tax-efficient incentive schemes, whilst also enhancing the worker’s freedom of choice.