PRSI and MyFutureFund vs INPS: the Real Employer Cost in Ireland and Italy

For an Irish employer, the add-on to salary is modest: employer PRSI of about 11% and, since January 2026, a 1.5% MyFutureFund contribution for staff who have no payroll pension. In Italy the add-on is around three times larger, because INPS funds pensions and most benefits, and because the 13th month and TFR are mandatory. Full comparison on Italy vs Ireland .

Ireland: employer PRSI  

Employer PRSI Class A for 2026 (Department of Social Protection):

• 9.00% where weekly pay is between €38 and €552.
• 11.25% where weekly pay is above €552 (subclass A1).
• From 1 October 2026, the rates rise by 0.15 points to 9.15% and 11.40%.
• The rate applies to all pay: there is no ceiling. The employer rate includes the National Training Fund levy.

Employees pay their own PRSI, plus PAYE income tax and USC, deducted through Revenue’s payroll system.

Ireland: MyFutureFund auto-enrolment  

Under the Automatic Enrolment Retirement Savings System Act 2024, MyFutureFund started on 1 January 2026:

• Who: employees aged 23–60 earning €20,000 or more a year across all employments who are not already in a payroll pension.
• Contributions: employee 1.5% and employer 1.5% of gross pay in years 1–3, rising in steps to 6% each by year 10. The State adds €1 for every €3 the employee pays.
• Cap: employer and State contributions stop once pay reaches €80,000 in the year.
• Opt-out: possible only in a window after 6 months.

Italy: INPS, INAIL, TFR and the 13th month  

Italian employment cost is built from:

• INPS employer contributions: about 30% of gross pay (29–32% by sector and size) . No lower band.
• INPS employee contributions: 9.19%, plus 1% on pay above €56,224 in 2026. For people first insured from 1996, contributions stop at €122,295 (INPS circular 6/2026).
• INAIL accident insurance: usually under 0.5% for office roles.
• TFR: about 6.91% of pay every year, paid on exit.
• 13th month (and often a 14th) is part of the annual gross salary (RAL), so it is in the base above.

Employee income tax (IRPEF) for 2026: 23% up to €28,000, 33% to €50,000, 43% above (Law 199/2025), plus regional and municipal surcharges. The employer withholds it monthly.

A €60,000 salary compared  

Irish figures use the A1 rate; at 11.40% from October 2026 the PRSI cost would be slightly higher. Italian total uses 1.36–1.40 × RAL. Run your own figures in the calculator .

Posting an Irish employee to Italy: A1 and Regulation 883/2004  

Ireland and Italy are both EU Member States, so Regulation (EC) 883/2004 coordinates social security; no bilateral treaty is needed. The basic rule: an employee pays social security where they work. The exception is a genuine posting:

• An employee normally working for an Irish employer and sent to Italy for up to 24 months can stay in Irish PRSI.
• The employer applies to the Department of Social Protection for an A1 certificate at least 4 weeks before the posting.
• The employer must carry on substantial business in Ireland and the employee must have been paying PRSI before the posting.

Italy also requires a posting notice to the Ministry of Labour and applies Italian minimum terms during the posting. A person hired in Italy to work in Italy, including an Irish citizen who moves there, is not a posted worker: INPS applies from day one. Tax is separate from social security; the Ireland–Italy double taxation agreement and Italian residence rules decide where income tax is due .

Why the gap is smaller than it looks  

The Italian figure looks high, but it buys more than Irish PRSI does. INPS contributions fund the employee’s State pension at a far higher replacement rate than the Irish State Pension, together with sickness, maternity, parental and unemployment benefits that in Ireland are partly paid by the State out of general taxation and partly left to company schemes. Many Irish employers of skilled staff already pay for private pension contributions above the MyFutureFund minimum, health insurance and income protection. When you add those to the Irish column, the difference narrows, although Italy remains more expensive per euro of gross salary.

Two Italian items also behave differently over time. TFR is a liability that grows with every month of service and is revalued each year, so it should be accrued, not expensed on exit. And the 13th and 14th months create cash peaks in December and in early summer. Plan the cash flow accordingly.

Finally, compare like with like. An Irish salary quoted as €60,000 is twelve monthly payments; an Italian RAL of €60,000 is the total of 13 or 14 payments. If you want an Italian employee to receive the same monthly gross as an Irish colleague on €5,000 a month, the RAL needs to be €65,000 (13 payments) or €70,000 (14 payments), and the employer cost rises with it.

Common questions  

Can our Italian employee join MyFutureFund? No. MyFutureFund is for employees on Irish payroll. An Italian employee is covered by INPS and may use TFR for a supplementary fund.

Can we pay from Ireland without an Italian entity? You would still need to register as an employer with INPS and run Italian payroll. An EOR avoids that.

What this means if you hire through an EOR  

With an EOR, you receive one monthly invoice covering gross pay, INPS, INAIL, TFR accrual, the 13th/14th month and our fee, with IRPEF withheld and paid in Italy. No Italian entity or INPS registration for your Irish company is needed. See Italian employment contracts , compare countries on Italy vs your country or contact us .

Related guides for Irish companies  

• Statutory redundancy vs TFR
• Annual leave, sick pay and working time
• Irish written statement vs the Italian contract

General information, not legal advice.