Under-35 stabilisation incentive: 100% contribution relief until 31 December 2026

From 1 August to 31 December 2026, private employers in Italy may apply for contribution relief when making permanent certain young workers who are under 35 and have never previously held a permanent employment contract.

The incentive does not cover new hires. It applies only to the uninterrupted conversion into permanent employment of fixed-term contracts started by 30 April 2026 whose overall duration does not exceed twelve months.

Eligible employers and workers

The measure is open to all private employers, including non-business entities and agricultural employers. It covers blue-collar workers, employees and middle managers, while executives are excluded.

It also applies to employment relationships entered into by worker members of cooperatives. Part-time contracts may qualify with a proportionately reduced cap, as may qualifying permanent conversions for agency work.

Contract and worker requirements

On the conversion date, the worker must be no more than 34 years and 364 days old and must not have previously held permanent employment. Previous apprenticeships, permanent on-call work and permanent domestic work do not prevent access in the cases specified by INPS.

The fixed-term contract must have started by 30 April 2026, have an overall duration not exceeding twelve months and continue without a break as permanent employment. New hires, domestic work, apprenticeships and the conversion of on-call contracts are not eligible.

Amount and duration

Relief covers 100% of employer social security contributions, up to €500 per worker per month for a maximum of 24 months. INAIL insurance premiums and contributions remain payable, together with any other contributions that legislation excludes from relief.

The incentive cannot be combined for the same worker with other employer contribution exemptions or rate reductions. Subject to the applicable rules, it is compatible with the enhanced tax deduction for employment growth and relief reducing contributions payable by the worker.

Conditions to verify

In addition to a valid DURC, compliance with employment law and the applicable collective agreement, the conversion must produce a net employment increase against the average workforce of the previous twelve months. This test must be carried out for each conversion and maintained while relief is claimed.

The employer must not have made dismissals for objective reasons or collective redundancies in the same production unit during the six months preceding conversion. For the next six months, restrictions also apply to dismissing the subsidised worker or another worker with the same classification in that unit, subject to the exceptions identified by INPS.

ESTA application and the ten-day deadline

Applications are filed through the INPS Benefits Portal, under “Incentivi decreto Lavoro 2026 – Articolo 4 – ESTA”. Employers may apply after completing the conversion or in advance.

For an advance application, if checks are successful and funding is available, INPS reserves the amount and asks the employer to complete the conversion and submit the mandatory notification within a strict ten-day period. Inconsistent data between the application and the Unilav or Unisomm notification prevent approval.

Why employers should act now

The window closes on 31 December 2026 and admission also depends on remaining funds. A timely review of fixed-term contracts allows employers to assess the conversion, labour cost and continuing compliance with every condition throughout the relief period.