Italy Salary Calculator

How Italy's tax system works

Italy employs a progressive income tax system known as IRPEF (Imposta sul Reddito delle Persone Fisiche) with a simplified three-bracket structure introduced in the 2024 reform. In addition to IRPEF, regional and municipal surcharges add 2–3 percentage points to the total tax burden depending on location.

Income tax brackets (2026)

Annual taxable income	Tax rate
Up to €28,000	23%
€28,001 – €50,000	35%
Above €50,000	43%

Regional income tax surcharges vary from 1.23% to 3.33%, and municipal surcharges from 0% to 0.8%. Italy provides deductions for dependent family members and work-related deductions that reduce the effective tax rate for middle-income earners.

Employee social contributions

Contribution	Rate
INPS pension and social insurance	9.19%
Total employee contributions	~9.19%

A temporary reduction brings the effective employee rate to 2–3% for workers earning below €35,000.

Employer social contributions

Contribution	Rate
Pension (INPS)	23.81%
Unemployment (NASPI)	1.61%
Illness, maternity, work injuries (INAIL)	variable
Other funds	~3–6%
Total employer contributions	~29–32%

Exact employer rates depend on sector, company size, and location.

Notable features of the Italian tax system

Italian employment law mandates the 13th month salary (tredicesima) paid in December, and in many sectors governed by national collective agreements (CCNL), a 14th month (quattordicesima) is also required. These are not bonuses in the discretionary sense — they are deferred portions of annual salary that are contractually guaranteed and subject to the same income tax and social contribution rules as regular monthly pay. The 13th month is universal across all employment contracts, while the 14th month depends on the applicable CCNL. For employers budgeting annual costs, this means the base monthly salary must be multiplied by 13 or 14 rather than 12 before applying employer contributions.

The TFR (Trattamento di Fine Rapporto) is a mandatory severance indemnity unique to Italy. Employers must accrue approximately one month's salary per year of service for each employee, creating a growing liability that is paid out when the employment relationship ends, regardless of the reason for termination. The annual TFR accrual is calculated as total annual compensation divided by 13.5, with an annual revaluation based on 75% of the ISTAT consumer price index plus a fixed 1.5%. Employees can choose to leave TFR with the employer (who can use it as working capital, particularly attractive for small businesses) or direct it to a supplementary pension fund. For companies with more than 50 employees, TFR must be transferred to the INPS Treasury fund unless the employee opts for a pension fund. This mandatory accrual adds approximately 7–8% to annual employment costs.

The combination of high employer contributions (29–32%), mandatory extra month payments (13th and often 14th), and TFR accrual means the true annual cost of employment in Italy can exceed 140% of the stated gross annual salary. This makes Italy one of the most expensive countries in Europe for employer-side labor costs, comparable to France and Belgium. However, the 2024 tax reform that simplified IRPEF from four brackets to three, combined with the temporary employee contribution reduction for lower earners, has improved net take-home pay for employees earning below €35,000. Regional variation is also significant: northern regions like Lombardy and Veneto tend to apply higher regional surcharges than southern regions, creating meaningful differences in net pay for employees at the same gross salary level.

Minimum wage in Italy

Italy does not have a statutory national minimum wage. Instead, wages are set through collective bargaining agreements between employers and trade unions, which cover most sectors and often result in effective minimum pay rates that vary by industry and region.

How taxation scales with income in Italy

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Enter a gross salary amount to see the net take-home pay, or switch to net-to-gross mode to find out what gross salary is needed for a specific net target. The calculator uses Italy's 2026 tax rates, social contribution rules, and applicable allowances.

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