How net pay is calculated in Italy
Italian salaries are quoted as RAL (retribuzione annua lorda) and paid in 13 instalments: 12 monthly salaries plus the tredicesima in December. Collective agreements such as commerce, tourism and the food industry add a 14th salary (quattordicesima) in June or July. Tax is computed on the annual income, so the yearly net stays the same however the RAL is split; only the size of each payslip changes.
- INPS contributions of 9.19% of gross pay (9.49% in larger industrial and commercial firms that pay the CIGS wage-guarantee levy), plus 1% on the part above €56,224 a year. For workers first insured after 1995 contributions stop at €122,295.
- IRPEF income tax on gross pay minus INPS: 23% up to €28,000, 33% from €28,000 to €50,000 (cut from 35% by the 2026 Budget Law) and 43% above. The work tax credit (detrazione per lavoro dipendente) is €1,955 up to €15,000 and falls to zero at €50,000. Between €25,000 and €35,000 it is €65 higher.
- Cuneo fiscale: up to €20,000 of taxable income, employees receive a tax-free payment of 7.1%, 5.3% or 4.8% of their income. Between €20,000 and €32,000 there is an extra €1,000 tax credit, which phases out to zero at €40,000.
- Trattamento integrativo: a €1,200 supplement paid with the salary to employees with taxable income of up to €15,000 who owe some tax. Between €15,000 and €28,000 it is only paid when family credits exceed the tax.
- Regional and municipal surcharges (addizionali) on the same taxable income. Regional rates run from 1.23% (for example Lombardia's lowest band, Sicilia, Veneto) to 3.33% in the top bands of Lazio, Campania, Piemonte and others. Municipal rates are typically 0.8% (Roma 0.9%), and many cities exempt low incomes. Both are only due if net IRPEF is above zero. They are withheld in the following year, but shown here for the year they relate to.
Example: RAL €30,000 in Milan's region (Lombardia), 13 salaries
| Gross pay (RAL) | €30,000.00 |
| INPS 9.19% | −€2,757.00 |
| Taxable income | €27,243.00 |
| IRPEF: €6,265.89 gross tax − €2,044.26 work credit − €1,000 cuneo credit | −€3,221.63 |
| Regional surcharge Lombardia (1.23% / 1.58% bands) | −€377.94 |
| Municipal surcharge 0.8% | −€217.94 |
| Net per year | €23,425.48 (≈ €1,802 per payslip × 13) |
Family situation
Children under 21 are supported by the Assegno unico, a monthly INPS benefit paid outside the payroll. They give no income-tax credit. The tax credit of up to €950 per child applies only to dependent children aged 21 to 29, and is split 50:50 between parents unless the higher earner takes all of it. A dependent spouse (income up to €2,840.51) gives up to €800. Some regions (Trento, Bolzano, Piemonte, Campania) also reduce their surcharge for children of any age.
Converting an Italian hourly wage
Collective agreements turn monthly pay into an hourly rate with a fixed divisor: 173 hours in metalworking and most industry, 168 in commerce and services, for a 40-hour week. The calculator uses monthly gross = hourly rate × divisor (scaled for part-time), and annual gross = monthly gross × 13 or 14. The tredicesima and quattordicesima are extra pay, not extra hours.
Employer costs come on top: roughly 30% INPS/INAIL contributions, depending on sector and size, plus the TFR severance accrual of 6.91% of pay. Official sources: Agenzia delle Entrate, INPS and the MEF surcharge tables.