Green light for the contribution exemption for employers hiring young workers on permanent contracts—but retroactive applications remain an issue
New hiring incentives: who is eligible for the youth bonus
With Decree No. 66/2025, the Ministry of Labour has officially set the rules for the youth bonus, a contribution incentive introduced by the Cohesion Decree to support stable employment for those under 35. The bonus grants a contribution exemption to private employers hiring with a permanent employment contract young people who have never had a permanent job.
The incentive also applies when a fixed-term contract is converted into a permanent one. The bonus covers hires made from September 1, 2024, to December 31, 2025.
Value of the exemption: up to €650 per month per worker
The financial benefit of the bonus is quite attractive: it covers 100% of the INPS contributions owed by employers, up to €500/month per worker. However, in Southern Italy (Abruzzo, Molise, Campania, Basilicata, Sicily, Puglia, Calabria, and Sardinia), the amount increases to €650/month.
Note: in any case, the bonus cannot exceed 50% of the wage cost.
Worker eligibility requirements
To qualify, the worker must:
- be under 35 at the time of hiring;
- never have had a permanent job, not even an apprenticeship that wasn’t converted.
The bonus also applies if the worker was previously hired by another employer who only partially used the exemption (known as portability). However, domestic work and apprenticeship contracts are excluded.
Employer conditions and restrictions
To be eligible for the youth bonus, employers must:
- be compliant with social security obligations (DURC);
- respect collective labour agreements and employment regulations;
- not breach the re-employment rights of previously dismissed workers.
If an employer dismisses the newly hired worker (or another employee in the same job role at the same location) within six months, the bonus is revoked and must be repaid.
How to apply: mandatory steps
The application to INPS must be submitted before the hiring and include:
- employer and employee details;
- contract type and salary;
- work location.
Once approved, the employer has 10 days to finalize the hire—this is proving to be one of the biggest bureaucratic hurdles.
The big question: what about workers already hired?
Some employers have already hired eligible under-35s before the EU’s approval on January 31, 2025—or even before the decree was published. In these cases, it was not possible to apply in advance, which may exclude these hires from the benefit.
The decree states that INPS may reserve funds for these hires, but further clarification is needed. We await an official guideline from INPS.
A real opportunity, with real challenges
The 2025 youth bonus is a valuable tool for boosting stable employment, especially in Southern Italy. But between tight deadlines, limited funds, and strict procedures, it may end up being a bureaucratic minefield. The final word now rests with INPS’s upcoming clarifications.
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