Employee tax credit days and unpaid absences: the rules for payroll

Employment tax credits must be apportioned to the days that give entitlement to pay: public holidays, weekly rest days and paid absences remain in the count, while days for which no remuneration subject to withholding is due reduce the count (unpaid leave, unpaid permits). No reduction applies for strike days or for particular working-time arrangements (horizontal, vertical or cyclical part-time).

The issue directly affects payroll processing: a wrong count of credit days generates year-end adjustments and disputes. A periodic check of payroll software settings is advisable: the recurring error is the undue reduction of days for vertical or cyclical part-time and for strike days, where the deduction must not be reduced. Since 1 January 2025 the supplementary sum (Art. 1(4)-(5), Law 207/2024) — for which annualisation serves only to determine the applicable percentage on income actually received — and the further deduction (Art. 1(6)-(7)), expressly proportioned to the period of work and hence to days, also apply.

Summary note by the CommercialistiAvvocati network, based on specialised legal and practice sources. The text does not reproduce original contributions and does not constitute professional advice.