What makes up an Italian salary
From the RAL in the offer letter to the net pay in the employee’s account.
From gross to net
Offers in Italy state the RAL, the annual gross salary. It is split into 13 monthly installments, or 14 under agreements such as Commerce and services: the 13th is paid in December, the 14th in June or July.
From each gross installment the employer withholds:
- the employee's social security share, around 9–10% of gross pay;
- national income tax, IRPEF, which is progressive and reduced by employment tax credits;
- the regional and municipal income tax surcharges, which depend on where the employee lives.
On top of gross pay, the employer pays its own social security share (roughly 30%), INAIL insurance and the TFR severance accrual. See the cost calculator for a worked example.
[Worked gross-to-net example at €50,000 RAL, to be computed from the verified 2026 parameters.]
13th, 14th month and bonuses
- 13th month (tredicesima): mandatory for all employees, paid in December.
- 14th month (quattordicesima): paid only where the CCNL provides it, such as Commerce and services, usually in June or July.
- Performance and seniority bonuses: set by the CCNL, a company agreement or your own policy.
All of these are part of taxable pay and carry contributions like the regular salary. Both the 13th and 14th month accrue month by month, so an employee who joins or leaves mid-year receives the part they have accrued.
Pay elements on the payslip
| Element | What it is |
|---|---|
| Base salary (minimo tabellare) | The minimum for the job level under the CCNL |
| Above-minimum pay (superminimo) | Any amount you agree on top of the CCNL minimum |
| Seniority increments (scatti di anzianità) | Automatic raises every few years of service, set by the CCNL |
| Overtime | Paid with the surcharges of the CCNL, higher at night and on holidays |
| Shift and night allowances | For night, weekend or rotating shifts |
| Hazard pay | For roles with specific risks |
| Commissions and variable pay | For sales and target-based roles; taxed as salary |
| Performance bonus | Productivity bonuses under a company agreement can qualify for a reduced flat tax |
In 2026 productivity bonuses up to €5,000 a year are taxed at a flat 1% instead of normal rates.
Benefits in kind
- Meal vouchers (buoni pasto): exempt from tax and contributions up to €10 a day for electronic vouchers, €4 for paper ones (2026).
- Company car for business and private use: taxed on a flat share of a standard cost that depends on the car’s emissions.
- Health insurance: contributions to supplementary health funds, often set by the CCNL, are exempt up to €3,615.20 a year.
- Housing: rent paid or reimbursed by the employer, common in relocation packages.
- Fringe benefits (gift cards, utility bills, fuel): tax-free up to €1,000 a year, €2,000 for employees with dependent children (2026).
- Supplementary pension: the employee can send the TFR and extra contributions to a pension fund.
Contributions and other deductions
- INPS funds pensions, unemployment, sickness, maternity and family allowances. The employee pays around 9–10% of gross pay; the employer around 30%, depending on sector, size and contract type.
- Contribution ceiling: for employees first insured from 1996 onwards, pension contributions stop above a yearly earnings ceiling: €122,295 in 2026. The employee rate also rises by 1 point on pay above €56,224 a year.
- INAIL is paid by the employer only, at a rate set by the job’s risk class.
- Trade union dues are deducted from pay for members who ask for it.
- Pension fund contributions chosen by the employee.
Income tax (IRPEF)
IRPEF is progressive and withheld every month. Each band of taxable income is taxed at its own rate:
| Taxable income | Rate |
|---|---|
| Up to €28,000 | 23% |
| €28,000 – €50,000 | 33% |
| Above €50,000 | 43% |
Taxable income is gross pay minus the employee’s social security share. Employment tax credits reduce the tax, mainly on lower salaries. The regional and municipal surcharges are added on top.
What the employer’s contributions pay for
| Item | Covers |
|---|---|
| Pension (IVS) | Old-age, disability and survivors’ pensions; the largest share |
| Unemployment (NASpI) | Unemployment benefit |
| Sickness and maternity | INPS benefits during sick and maternity leave (not for all categories) |
| Family allowances (CUAF) | Family support schemes |
| TFR guarantee fund | Pays severance if an employer cannot |
| Wage guarantee funds | Short-time work schemes, depending on sector and size |
| INAIL | Workplace injury and occupational disease |
| TFR accrual | 6.91% set aside for severance (not a tax, it is the employee’s) |
[Per-item rates for the two example CCNLs to be filled from the verified parameters.]
State pension in brief
Contributions build the employee’s state pension. The standard old-age pension starts at 67 with at least 20 years of contributions. Early retirement is possible regardless of age after 42 years and 10 months of contributions for men, one year less for women.
From 2027 both requirements go up by one month, and by three months from 2028.