How an Italian payslip is built
The gross annual salary (retribuzione annua lorda, RAL) is the contractual pay for the year, including the extra monthly payments where the collective agreement provides them. The payslip then subtracts, in order: the employee's INPS contributions, the personal income tax (IRPEF) net of the employment tax deduction and the tax-wedge measures, and the regional and municipal surtaxes. What remains is the net pay.
| IRPEF bracket 2026 | Rate |
|---|---|
| up to €28,000 | 23% |
| up to €50,000 | 33% |
| above €50,000 | 43% |
The rates apply to slices of income, not to the whole amount: a €40,000 taxable income is not taxed at 33%. The first €28,000 are taxed at 23%, and only the part between €28,000 and €40,000 at 33%.
INPS, INAIL and TFR: the employer side
INPS (Istituto Nazionale della Previdenza Sociale) collects pension and other social security contributions. The calculator defaults to a 9.19% employee contribution rate. Actual employee and employer rates depend on the worker's classification and applicable scheme; 33% is the ordinary pension rate for many employees, not a universal total contribution rate.
INAIL (Istituto Nazionale per l'Assicurazione contro gli Infortuni sul Lavoro) insures employees against accidents at work and occupational diseases. The premium is risk-rated by sector and is paid by the employer; it is not a deduction from the employee's pay. The calculator folds it into the editable employer contribution rate instead of pretending to know your sector rate.
TFR (trattamento di fine rapporto) is the end-of-service allowance. The model uses gross annual pay divided by 13.5 as a simplified TFR estimate under article 2120 of the Civil Code; actual accrual depends on the applicable remuneration base and adjustments. It is not a contribution or a tax: it is a debt the employer accrues towards the employee and pays when the employment ends.
On a €30,000 gross salary with the default 30% employer rate, the tool estimates about €9,000 of employer contributions and about €2,222 of TFR, for a total employer cost of about €41,222 a year. The 30% default is a combined modelling assumption, not your company's assessed INAIL premium. Payroll administration itself is a service: our published fee estimator uses €550 per employee per year for payroll services, excluding VAT and subject to the agreed engagement.
Regional and municipal surtaxes
Regional and municipal surtaxes are estimated as flat percentages of the taxable income used for IRPEF. Regions may set their own rates and brackets, and municipalities set theirs within the limits of the law, so the 1.23% and 0.8% defaults are estimates to be corrected with the actual rate of the employee's region and municipality. Local thresholds, exemptions and progressive brackets are not calculated automatically.
13th and 14th month
Many Italian collective agreements provide a 13th monthly payment, and some provide a 14th. These are not a separate tax regime: they are taxable employment income like the other months, subject to the same contributions, IRPEF and surtaxes. For a fixed gross annual salary, the model's annual net pay does not change when you select 12, 13 or 14 payments. The average per payment does change; the 12-month equivalent remains the same.
What the calculator does not do
- It does not calculate family deductions, year-end adjustments, bonuses, overtime, sick leave, welfare or benefits.
- It does not apply INPS contribution ceilings automatically (the 2026 ceiling for members registered after 1995 is €122,295 of pay; the tool warns above it).
- It does not model the 2026 sterilisation of the IRPEF benefit for total income above €200,000; gross salary alone does not establish total income.
- It does not know your collective agreement, your INAIL rate or your region and municipality: it asks for the rates.
- It is an estimate, not a payslip: payroll obligations may be handled internally where permitted; if outsourced, they must be entrusted to a professional or organisation authorised under the applicable rules.
Hiring in Italy
A foreign company can employ someone in Italy through its own SRL, by registering directly with INPS and INAIL, or through an authorised staff-leasing agency. The payroll cycle is monthly and includes the payslip, the Libro Unico del Lavoro, the UniEmens return to INPS and the F24 payment of contributions and withheld tax. Our guide to hiring employees in Italy covers the routes, the collective agreement, the UNILAV filing and permanent-establishment risk.
If the company does not exist yet, start from opening an SRL in Italy and the company formation service. For ongoing payroll, bookkeeping and filings see payroll and HR and accounting and tax.
Sources
- Agenzia delle Entrate — IRPEF rates and calculation
- INPS — contribution rates
- Article 2120, Civil Code — TFR
- Italian payslip calculator and its guide
The verification of each claim, with the source and the date, is in the fact-check file of this page.