Company Cars, Phones and Laptops in Italy: Which Equipment Perks Are Taxable

You hire in Italy. You want to hand your new employee a laptop, a phone and maybe a car. The question is simple. Does the employee pay tax on it?

The answer depends on one test: who benefits from the use. Italian payroll treats equipment as either a tool of work or a benefit in kind. The first is not taxed. The second is added to the employee’s taxable pay.

The basic rule  

Anything the employer gives that has value for the employee is, in principle, income. Italy calls these items fringe benefits. They are taxed as if they were salary, and they also count for social security contributions.

There is an exception for items the employee needs to do the job. A tool that exists only for work is not income. It is a business cost for the employer.

The line is use, not ownership. The company can own the device and still create a taxable benefit if the employee uses it freely for private life.

Laptops  

A laptop used for work is a tool of work. The employer buys it, owns it and the employee uses it to do the job. No taxable benefit arises.

The picture changes if the employee can keep the laptop for personal use with no real work restriction. Or if the employer later gives it to the employee. That transfer is a benefit and it is taxable, unless it falls under the allowance described below.

Good practice:

• Keep the device on the company asset register.
• Put the work purpose in a written equipment policy.
• Record the handover and the return.

Phones  

The same logic applies to mobile phones. A company phone with a company plan, issued for work, is a tool of work. Occasional private calls do not turn it into pay in practice.

The risk comes from mixed arrangements. For example, the employer pays the personal phone bill of the employee, or covers a family plan. Those payments are a benefit and are taxable.

If you want to avoid doubt, keep two things separate. Business lines belong to the company. Private costs stay with the employee.

Company cars  

Cars are the item that creates real tax. A car given for business use only is not a benefit. In reality that is rare, because most employees drive the car home and use it on weekends.

When the employer allows private use, the car becomes a taxable benefit. This is called a car for mixed use. Italy does not look at your actual costs. It uses a conventional value set by an official table, based on the car and a standard yearly distance. The employee is taxed on that value, less any amount the employee pays back to the company.

Two points matter for planning:

• The taxable value comes from the official table, not from your lease invoice. A cheap lease does not lower it.
• Fuel cards and other running costs paid for private use can add to the benefit.

Companies often choose between a car with private use and a higher salary. Run both numbers. The car creates a taxable value for the employee and a cost for you. The result is not always better than cash.

The annual allowance for benefits  

Italy lets employers give certain benefits tax-free up to a yearly threshold. According to the source we checked, the threshold is 1,000 EUR per year in the general case. It is 2,000 EUR per year for employees with dependent children.

This matters for equipment in one case. If you give a device or other goods for personal use, the value can fall within the threshold and stay tax-free. If the total of all such benefits goes over the threshold, the full amount becomes taxable, not just the excess.

Two cautions. This figure comes from a press review, so treat it as secondary. Confirm the current threshold and its conditions with your Italian payroll provider before you build a policy around it. Also, the threshold is shared across all benefits of the employee, so a gift card, a phone handover and other perks all count toward the same limit.

What this means for payroll  

A taxable benefit is not a problem. It is a payroll step. The employer must:

• Value the benefit.
• Add it to the monthly pay for tax and contribution purposes.
• Show it on the payslip.

The cost is real for both sides. The employee sees higher taxable income. You may owe higher employer contributions on that amount.

A short checklist  

1. Decide if the item is for work only or also for private use.
2. Write that down in an equipment policy signed by the employee.
3. For cars, ask payroll to calculate the conventional value before you make an offer.
4. Track all other benefits against the yearly threshold.
5. Review the policy when a role or family situation changes.

US teams often assume a company device is free of tax everywhere. In Italy the answer depends on use. A clear policy removes most of the risk.

Try our cost calculator to see what a full employment package costs in Italy, including benefits.