Salary and payslip
- Gross annual salary (RAL)
- A year’s pay before contributions and taxes, as written in your contract. It includes the thirteenth month and, where there is one, the fourteenth.
- Monthly payments (mensilità)
- The number of payslips the RAL is split into: 12, or 13 with the thirteenth month and 14 with the fourteenth. The yearly net does not change, only how much you receive each month.
- Taxable income (reddito imponibile)
- Gross pay minus the INPS contributions you pay: the base for IRPEF and the surcharges.
- National collective agreement (CCNL)
- The agreement between unions and employer associations that sets, for each sector, minimum pay, levels, monthly payments, holidays and notice periods.
Taxes
- IRPEF
- Italian personal income tax. It is charged in brackets on taxable income; in 2026: 23% up to €28,000, 33% from €28,000 to €50,000 and 43% above €50,000.
- Tax bracket (scaglione)
- A band of income with its own rate. Each rate applies only to the part of income that falls in its band: crossing a threshold means paying more only on the part above it, not on all your income.
- Tax deduction (detrazione)
- An amount taken off gross IRPEF. The employment income deduction is worth up to €1,955 and falls as income rises, reaching zero at €50,000. There are also deductions for dependants and for some expenses.
- Trattamento integrativo
- A credit of up to €1,200 a year paid through your payslip. With income up to €15,000 you get all of it; up to €28,000 only if your deductions exceed gross IRPEF.
- Tax wedge (cuneo fiscale)
- The gap between what you cost your employer and what you take home. Since 2025 the tax wedge cut adds an extra payment to your payslip with income up to €20,000, and an additional deduction of up to €1,000 that falls above €32,000 and reaches zero at €40,000.
- Regional surcharge (addizionale regionale)
- An extra tax on taxable income set by the region you live in. In 2026 it ranges from 0.70% to 3.63% depending on the region and your income, and is due only when net IRPEF is above zero.
- Municipal surcharge (addizionale comunale)
- An extra tax on taxable income set by the comune you live in. The calculator uses the rates the Italian Department of Finance publishes for every comune; when a comune has not set a rate for a year, the previous year’s rate applies.
Contributions and the end of employment
- INPS contributions
- Your pension contributions, paid to the national social security institute (INPS). For a private sector employee they are 9.19% of pay up to €56,224 and 10.19% on the part above it (2026 values). Your employer also pays its own, which do not come out of your gross pay.
- Severance pay (TFR)
- The part of your pay your employer sets aside every year and pays you when the job ends. The yearly amount is your pay divided by 13.5, about 7.41%; each year it grows by 1.50% plus 75% of inflation as measured by the national statistics institute (ISTAT).
- NASpI
- Italy’s monthly unemployment benefit, paid by INPS. It goes to people who lose their job without choosing to and have at least 13 weeks of contributions in the last 4 years.
VAT number
- Forfettario regime
- A simplified tax regime for people with a VAT number who invoice up to €85,000 a year. Instead of IRPEF and surcharges you pay a 15% substitute tax, 5% in the first 5 years of a new business, on a share of turnover set by law. You do not charge VAT on your invoices.
- Profitability coefficient
- The share of turnover that counts as income under the forfettario regime. It depends on the activity and ranges from 40% to 86%.
- Substitute tax (imposta sostitutiva)
- A flat-rate tax that replaces IRPEF on a given income. Besides the forfettario regime, it applies to the performance bonus: in 2026, 1% up to €5,000.
Read how we calculate net pay