Tax Observatory › Labour › Occasional self-employment in Italy: the €5,000 threshold is not a tax exemption

Occasional self-employment in Italy: the €5,000 threshold is not a tax exemption

Individuals who work occasionally without an Italian VAT number pay personal income tax (IRPEF) from the first euro: the €5,000 threshold concerns only INPS social security contributions. The 20% withholding tax, the tax return, the INPS Separate Fund, notification to the Labour Inspectorate and the line between occasional and habitual activity.

People who do self-employed work now and then, without a VAT number, are often told that up to €5,000 a year “nothing is due”. That is not correct. The fee is income subject to IRPEF from the first euro and must be reported in the tax return. The €5,000 threshold does exist, but it concerns only social security contributions: up to that amount nothing is paid to the INPS Separate Fund (Gestione separata; Article 44(2) of Decree-Law No. 269 of 30 September 2003, converted into law by Law No. 326 of 24 November 2003); above it contributions are due and, according to INPS, only on the excess. Confusing the two leads people to leave the income out of their return, with tax, interest and penalties to be settled later.

What occasional self-employment is

It is the contract for work and services (contratto d’opera) under Article 2222 of the Italian Civil Code: a person undertakes to carry out a piece of work or a service for consideration, mainly through their own labour and without being subordinate to the client. The work is occasional when it is not carried out habitually and is not coordinated on a stable basis with the client’s organisation: a one-off consultancy assignment, a translation, an isolated technical job.

For tax purposes these fees are “miscellaneous income”: Article 67(1)(l) of the Consolidated Income Tax Act (Presidential Decree No. 917 of 22 December 1986, “TUIR”) includes income from self-employed activities not carried out habitually. Taxable income is the difference between the fees received in the year and the expenses specifically incurred to earn them (Article 71(2) TUIR); the Italian Revenue Agency’s return instructions require taxpayers to keep a schedule showing the fees, expenses and income for each assignment. VAT does not apply, because the activity is not exercised habitually, as Article 5 of Presidential Decree No. 633 of 26 October 1972 requires.

IRPEF is due from the first euro

No provision grants a €5,000 allowance for income tax. The occasional fee is added to the person’s other income, such as employment income or a pension, and is taxed at the ordinary rates: from 2026, 23% up to €28,000, 33% up to €50,000 and 43% above that (Article 11 TUIR, as amended by Article 1(3) of Law No. 199 of 30 December 2025), plus the regional and municipal surtaxes.

The idea of an exemption comes from a different mechanism. Individuals whose only income is modest occasional income are entitled to a specific tax credit (detrazione) of €1,265 where total income does not exceed €5,500, decreasing to zero at €50,000 (Article 13(5) TUIR). On a low income this credit can reduce the tax to nil. It cannot, however, be combined with the tax credits for employment or pension income (Article 13(1)-(4) TUIR): anyone who already has a salary or a pension receives the credit for that income instead. For them, the occasional fee is taxed at their marginal rate and also reduces their tax credits, which fall as total income rises.

An example. An employee with total income of €30,000, for a full year of work and with no other income, receives €3,000 from a company for occasional work. Gross IRPEF on the €3,000 is €990 (33%), but that is not the only cost: with total income rising to €33,000, the employment tax credit, including the €65 increase, falls from about €1,801 to about €1,541 (Article 13(1)(c) and (1.1) TUIR). The additional credit for employees with income between €20,000 and €40,000 in turn falls from €1,000 to €875 (Article 1(6) of Law No. 207 of 30 December 2024). Net IRPEF therefore rises by about €1,375. After crediting the €600 withheld, about €775 remains payable with the tax return, plus the regional and municipal surtaxes.

The 20% withholding tax and the tax return

If the client is a withholding agent (sostituto d’imposta), meaning a business, a self-employed professional, a company, an entity or a condominium (Article 23 of Presidential Decree No. 600 of 29 September 1973), it withholds 20% of the gross fee on payment, as an advance on the recipient’s income tax (Article 25(1) of Presidential Decree No. 600/1973, which expressly covers self-employed services “even if not carried out habitually”). It pays the amount over with form F24 by the 16th of the following month and issues the Single Certification (Certificazione Unica) by 16 March of the following year. Businesses and professionals under the flat-rate scheme (regime forfetario) are an exception: they withhold tax only on employment and similar income, not on self-employment income, but must report in their own tax return the recipient’s tax code and the amount paid without withholding (Article 1(69) of Law No. 190 of 23 December 2014). Where the client is under the flat-rate scheme, or is a private individual not acting as a business or professional, no tax is withheld and the worker receives the gross fee.

In both cases the income must be reported: in form 730 at line D5 with code 2, or in the Redditi Persone fisiche return at line RL15. The withholding is an advance payment and does not settle the tax. Individuals are not required to file a return if their gross tax, less tax credits and amounts withheld, does not exceed €10.33 (Article 1(4)(c) of Presidential Decree No. 600/1973); the return instructions add the further condition that no regional or municipal surtax remains payable. Even when no return is required, filing one is how the tax withheld is recovered: someone whose only income is €4,000 in fees from a company, with the tax reduced to nil by the credit, can claim a refund of the €800 withheld or offset it. Anyone who realises they have left the income out can correct the position with an amended return and the voluntary correction procedure (ravvedimento operoso); if the return has not yet been filed, the rules on late returns apply.

Contributions: the real €5,000 threshold

Article 44(2) of Decree-Law No. 269/2003 requires registration with the INPS Separate Fund only where annual income from occasional self-employment exceeds €5,000. According to INPS (Circular No. 103 of 6 July 2004), the reference period is the calendar year, gross fees received from all clients are aggregated rather than counted client by client, and contributions are due only on the part exceeding €5,000, from the moment the threshold is passed. The law refers to “income”, INPS to gross fees: in practice the Institute’s reading is followed.

Two thirds of the contribution are borne by the client and one third by the worker (Ministerial Decree No. 281 of 2 May 1996); the client pays over the full amount by the 16th of the following month and deducts the worker’s third from the fee. The share borne by the worker is a compulsory social security contribution, deductible from their total income (Article 10(1)(e) TUIR). For 2026, INPS Circular No. 8 of 3 February 2026 sets the rate for these relationships at 33.72% for workers with no other compulsory pension cover and 24% for pensioners and members of other compulsory schemes. INPS has issued no recent guidance on how the contribution is to be paid when the client is a private individual not acting as a business: in that case it is advisable to clarify the point with INPS in advance. The worker, who is the only one who knows the fees received from others, must inform each client when the threshold is passed: this is stated in the same Circular No. 103/2004.

Advance notification to the Labour Inspectorate

From 21 December 2021, before the work begins, a client acting as a business (imprenditore) must notify the local Labour Inspectorate that each occasional self-employed worker is starting work (Article 14(1) of Legislative Decree No. 81 of 9 April 2008, as amended by Article 13 of Decree-Law No. 146 of 21 October 2021, converted into law by Law No. 215 of 17 December 2021). From 21 May 2022 the notification must be made electronically, and work arranged through digital platforms is excluded by law (Article 12-sexies of Decree-Law No. 21 of 21 March 2022, converted into law by Law No. 51 of 20 May 2022). The standard channel is the application on the Ministry of Labour’s Servizi Lavoro portal. The notification states the client, the worker, the place, the subject matter, the start date and the expected duration, and the fee if already agreed; if the work runs beyond the period stated, a new notification is needed, otherwise the fine also applies to the additional period. Failure to notify, or late notification, attracts an administrative fine of €500 to €2,500 for each worker, with no possibility of a prior warning to comply (diffida).

The obligation does not apply to clients that are not businesses, such as private individuals, public authorities, professional practices not organised as a business, Third Sector entities carrying out only non-commercial activities, and non-profit amateur sports associations and clubs. Also excluded is work of a purely intellectual nature, such as that of proofreaders, graphic designers, speakers, teachers and copywriters (notes of the Ministry of Labour and the National Labour Inspectorate No. 29 of 11 January 2022 and No. 109 of 27 January 2022).

The receipt and stamp duty

The fee is documented by a receipt, not an invoice: details of the parties, a description of the work, the gross fee, the tax withheld and the net amount, with a statement that this is occasional work outside the scope of VAT. Receipts for more than €77.47 are subject to stamp duty of €2 (Article 13 of the tariff annexed to Presidential Decree No. 642 of 26 October 1972). The exemption for documents relating to transactions subject to VAT does not apply, precisely because the fee is outside the scope of VAT.

Not to be confused with PrestO and the Libretto Famiglia

Many of the limits in circulation, such as “no more than €2,500 with the same client”, belong to a different arrangement: the occasional work contract (PrestO) and the family voucher booklet (Libretto Famiglia), managed on the INPS platform (Article 54-bis of Decree-Law No. 50 of 24 April 2017). These carry annual caps of €5,000 for each worker, €10,000 for each user (€15,000 in the conference, trade fair, events, spa and amusement park sectors) and €2,500 between the same worker and the same user, plus a limit of 280 hours in the calendar year, beyond which the relationship becomes full-time, open-ended employment (Article 54-bis(20)). Occasional self-employment under Article 2222 of the Civil Code has no cap on the amount per client.

The “30 days a year” limit is also a relic of earlier rules: it applied to the occasional coordinated collaborations governed by Article 61(2) of Legislative Decree No. 276 of 10 September 2003, a provision repealed in 2015 by Legislative Decree No. 81 of 15 June 2015.

When work stops being occasional

Whether a VAT number is needed depends not on the amount received but on whether the activity is habitual. According to the Revenue Agency, an activity is habitual when the work is carried out regularly, systematically and repeatedly (Resolution No. 41/E of 15 July 2020). The Italian Supreme Court looks at the number of assignments, their duration and the number of clients, and, referring to its own case law, reiterates that even a single transaction can amount to a habitual activity if it forms part of repeated, regular, stable and systematic conduct. In the case before it, consultancy work carried out by a full-time university professor for several clients over several years was treated as habitual self-employment, with VAT due (Tax Division, Order No. 26206 published on 26 September 2025). Work can therefore remain occasional above €5,000 and already be habitual below that figure. According to the Agency, moreover, a person entered in a professional register cannot, as a rule, treat fees for work typical of their profession as occasional, even where they arise from a single assignment or are small (Resolution No. 88/E of 19 October 2015, referred to in ruling No. 266 of 2025). Each case nonetheless turns on its own facts: in that same ruling the Agency found that the activity was not habitual for VAT purposes.

When assignments become habitual, a VAT number must be opened. If instead the work becomes continuous and coordinated with the client, the relationship is a coordinated and continuous collaboration (collaborazione coordinata e continuativa, Article 409, point 3, of the Code of Civil Procedure): contributions to the Separate Fund are due from the first euro and the client must notify the Employment Centre (Centro per l’impiego) in advance that the relationship is starting. If, moreover, the way the work is performed is organised by the client, the rules on employment apply to the relationship (Article 2(1) of Legislative Decree No. 81/2015): the client is then liable for unpaid contributions, with the related civil penalties, and for pay differences.

From 2027

From 1 January 2027 the new consolidated tax Acts apply and, for the provisions discussed here, the numbering changes but not the content. Income under Article 67(1)(l) moves to Article 76(1)(t) of the new Consolidated Income Tax Act (Legislative Decree No. 117 of 19 June 2026), and the calculation of income to Article 80(2). Articles 23 and 25 of Presidential Decree No. 600/1973, on withholding agents and the 20% withholding tax, become Articles 33 and 38 of the Consolidated Act on Tax Payments and Collection (Legislative Decree No. 33 of 24 March 2025, whose application was postponed to 2027 by Article 4 of Decree-Law No. 200 of 31 December 2025, converted into law by Law No. 26 of 27 February 2026). The rule on who is not required to file moves to Article 52(4) of the Consolidated Act on Tax Compliance and Assessment (Legislative Decree No. 141 of 5 August 2026), and the definition of the exercise of arts and professions for VAT purposes to Article 4 of the Consolidated VAT Act (Legislative Decree No. 10 of 19 January 2026); stamp duty moves to the tariff annexed to Legislative Decree No. 123 of 1 August 2025. Article 44 of Decree-Law No. 269/2003 and Article 14 of Legislative Decree No. 81/2008, which are not tax provisions, remain unchanged.

In practice

• For the worker: keep track of the fees received during the year from all clients, inform them when €5,000 is exceeded and always report the income, even when tax has been withheld.
• Issue a receipt for every payment, with the €2 stamp duty if it exceeds €77.47, and keep the documents supporting the related expenses.
• For a client acting as a business: send the notification to the Labour Inspectorate before the work begins, withhold and pay over the tax, and issue the Single Certification.
• Above €5,000: the worker registers with the Separate Fund by submitting an online application to INPS; the client pays contributions on the excess by the 16th of the following month, deducts one third from the fee and reports the relationship in the UniEmens monthly return.
• When assignments recur regularly, check with an adviser whether the time has come for a VAT number.

Frequently asked questions

If I earn less than €5,000 a year from occasional work, do I have to report the fees?

Yes. The €5,000 threshold concerns only INPS contributions. The income must be reported; the only case in which you need not file is where, after tax credits and amounts withheld, the tax due does not exceed €10.33 and no surtaxes remain payable; even then it is worth filing to recover the tax withheld.

If the client is a private individual, who pays the tax?

A private individual not acting as a business or professional does not withhold tax and does not have to notify the Labour Inspectorate. The worker receives the gross fee and pays IRPEF through their own tax return. The same applies, as regards withholding only, when the client is under the flat-rate scheme. If fees exceed €5,000, INPS has not clarified how contributions are to be paid where the client is a private individual: it is advisable to ask the Institute for guidance before the work begins.

Is there a limit on days or on the amount per client?

Not for occasional self-employment. The €2,500 per client and the 280 hours a year apply to the occasional work contract (PrestO) and the family voucher booklet (Libretto Famiglia); the 30 days belonged to a provision repealed in 2015. What separates occasional work from work requiring a VAT number is habitual activity, not the amount.

Sources

Article 2222 of the Italian Civil Code; Articles 10(1)(e), 11, 13(1), (1.1) and (5), 67(1)(l) and 71(2) of Presidential Decree No. 917 of 22 December 1986; Article 1(6) of Law No. 207 of 30 December 2024; Article 1(3) of Law No. 199 of 30 December 2025; Article 1(69) of Law No. 190 of 23 December 2014.

Articles 1(4), 23 and 25 of Presidential Decree No. 600 of 29 September 1973; Article 4 of Presidential Decree No. 322 of 22 July 1998; Article 5 of Presidential Decree No. 633 of 26 October 1972; Article 13 of the tariff annexed to Presidential Decree No. 642 of 26 October 1972.

Article 44(2) of Decree-Law No. 269 of 30 September 2003; Ministerial Decree No. 281 of 2 May 1996; INPS Circulars No. 103 of 6 July 2004 and No. 8 of 3 February 2026.

Article 14(1) of Legislative Decree No. 81 of 9 April 2008; Article 13 of Decree-Law No. 146 of 21 October 2021; Article 12-sexies of Decree-Law No. 21 of 21 March 2022; Article 409, point 3, of the Code of Civil Procedure; Ministry of Labour and National Labour Inspectorate, notes No. 29 of 11 January 2022 and No. 109 of 27 January 2022.

Article 54-bis of Decree-Law No. 50 of 24 April 2017; Article 61 of Legislative Decree No. 276 of 10 September 2003; Articles 2 and 52 of Legislative Decree No. 81 of 15 June 2015.

Italian Revenue Agency, Resolutions No. 88/E of 19 October 2015 and No. 41/E of 15 July 2020, ruling No. 266 of 2025; instructions for the 2026 form 730 and Redditi Persone fisiche returns; Italian Supreme Court, Tax Division, Order No. 26206 published on 26 September 2025.

Legislative Decree No. 117 of 19 June 2026 (Articles 76 and 80); Legislative Decree No. 33 of 24 March 2025 (Articles 33 and 38); Article 4 of Decree-Law No. 200 of 31 December 2025; Legislative Decree No. 141 of 5 August 2026 (Article 52); Legislative Decree No. 10 of 19 January 2026 (Article 4); Legislative Decree No. 123 of 1 August 2025.