How we calculate Italian net pay

The calculator follows the year-end settlement of a full-year, full-time private-sector employee in the INPS employees' pension fund, with employment income only. The rules come from the income tax code (TUIR), the 2025 and 2026 budget laws, the tables of the 730/2026 return, INPS circulars and the Finance Ministry's surtax pages — see data sources.

INPS contributions

Employees pay 9.19% of pay, their share of the 33% pension contribution (9.49% at companies covered by the extraordinary short-time work fund). Pay above the first pensionable band (€56,224 in 2026, €55,448 in 2025) carries another 1%. People with no contributions before 1996 pay only up to the ceiling (€122,295). Contributions are deducted: gross pay less contributions is total income.

IRPEF: brackets and credits

Tax is charged by bracket: 23% · 33% · 43% (up to €28,000, up to €50,000, above); in 2025 the second bracket was 35%. The employee credit is deducted (€1,955 up to €15,000 of income, then tapering to zero at €50,000, plus €65 between €25,000 and €35,000), as is the spouse credit where it applies. Ratios in the formulas are cut at the fourth decimal, as the 730 instructions require.

Tax wedge cut and supplementary payment

With income up to €20,000 you receive a sum that is not income and is not taxed: 7.1%, 5.3% or 4.8% of employment income depending on the band. Between €20,000 and €32,000 there is instead an extra credit of €1,000, tapering to zero at €40,000. The supplementary payment is €1,200 a year up to €15,000 of income when tax by bracket exceeds the employee credit less €75; between €15,000 and €28,000 it is paid only when credits exceed the tax, for the difference.

Regional and municipal surtaxes

The regional surtax uses the rates the Finance Ministry publishes for each region and autonomous province, with the special rules on the same pages: a single rate on the whole income below certain thresholds (Lazio, Umbria, Friuli Venezia Giulia), exemptions (Aosta Valley, Trento), fixed credits (Lazio, Umbria, Bolzano) and credits for children (Bolzano, Campania, Piedmont, Apulia, Sardinia, Trento; children are taken to be minors). The municipal surtax is built in for Roma, Milano, Napoli, Torino, Palermo, Genova, Bologna, Firenze, Bari, Catania, Venezia, Verona; for other municipalities you enter the rate and exemption threshold. Above the threshold the rate applies to the whole income. Both are due only when some income tax remains after credits.

Payments and settlement

Gross pay is split into 13 payments (12 or 14 if you choose). Net per payment is annual net pay divided by the number of payments: actual payslips differ, because credits are spread over the twelve months, the 13th payment gets none, and a year's surtaxes are withheld in the following year from January to November (the municipal one with a 30% advance during the year).

Employer cost

Employers pay 23.81% in pension contributions, including the 0.50% they recover from the severance fund accrual, and set aside severance pay (TFR): pay divided by 13.5, less that 0.50%. Their other contributions (unemployment, family allowances, sickness, maternity, INAIL accident insurance) depend on the sector and company size and are not included.

Tests

Not yet included

• Other income, deductible and creditable expenses (medical costs, mortgage interest), IRPEF credits for children from age 21 and other relatives, the universal child benefit.
• Regional reliefs linked to disability, and municipalities beyond the twelve listed unless you enter your own rate and threshold.
• Reduced tax on performance bonuses, overtime and contract pay rises, meal vouchers, fringe benefits, the inbound-worker regime, part-time work and part-year employment.

Estimates only. Not tax, legal or financial advice.