Income Tax (IRPEF)
What is IRPEF?
- IRPEF (Imposta sul Reddito delle Persone Fisiche) is the personal income tax in Italy, applied progressively. This means higher portions of income are taxed at higher rates.
How It’s Calculated: Italy’s tax brackets for 2024 are as follows:
- 23%: Income up to €15,000
- 25%: Income from €15,001 to €28,000
- 35%: Income from €28,001 to €50,000
- 43%: Income over €50,000
Regional Tax
What is Regional Tax?
- Regional taxes vary based on where you live in Italy, as regions can set their own rates. These typically range from 1.23% to 3.33% of your gross income.
How It’s Calculated: Assuming a 2.5% regional tax rate:
€54,444×2.5%=€1,361.10€54,444 \times 2.5\% = €1,361.10
Impact: This is a mandatory tax imposed by the regional government to fund local services.
Municipal Tax
What is Municipal Tax?
- Municipalities in Italy can levy additional taxes, ranging from 0% to 0.9% of gross income. The exact rate depends on the specific municipality where you reside.
How It’s Calculated: Assuming a 0.5% municipal tax rate:
€54,444×0.5%=€272.22€54,444 \times 0.5\% = €272.22
Impact: This tax helps fund local administrative expenses and services such as public transportation or community programs.
Social Security Contributions (INPS)
What is Social Security?
- Social security contributions fund pensions, unemployment insurance, and other social welfare programs. Both the employee and the employer contribute to these.
Employee Contribution Rate:
- Employees typically contribute 9.19% of their gross income, with an annual cap for higher salaries (above €105,014).
How It’s Calculated: For a salary of €54,444:
€54,444×9.19%=€5,003.40€54,444 \times 9.19\% = €5,003.40
Impact: This deduction ensures that employees have access to pensions and other benefits.
2024/25 Salary Calculator Italy – Salary After Tax Updates: What You Need to Know
Italy’s 2024/25 salary adjustments bring notable changes for employees across various sectors, ensuring a boost in take-home pay and streamlined progression for specific roles. These updates, implemented nationwide, aim to enhance financial stability and align pay structures with economic trends.
Key Highlights:
Salary Increases Across Sectors
A 4.5% average pay rise has been introduced across industries covered by collective bargaining agreements (CBAs).
These adjustments are retroactive to the 1st of January 2024, with back pay included for eligible employees.
Due to additional funding and negotiations, specific industries, such as healthcare and education, are expected to see higher-than-average increases.
Streamlined Progression for Skilled Roles
For roles covered under higher pay grades, progression up the salary scale has been reduced from 6 years to 3 years, making it easier for employees to reach top-tier earnings faster.
Enhanced bonuses and allowances are also being introduced for specialized professions.
Tax and Contribution Adjustments
The IRPEF tax brackets remain unchanged for 2024/25, but deductions for dependents and private pension contributions have been simplified.
Social security contributions (INPS) for employees remain steady at 9.19%, ensuring consistent pensions, maternity leave, and unemployment insurance benefits.
Payslip
Your payslip in Italy provides a detailed breakdown of your net pay and the amount you take home after all deductions. It clearly outlines how much your gross salary remains after covering income tax (IRPEF), regional and municipal taxes, and social security contributions (INPS). Look for the section labelled “Net Pay” or “Stipendio Netto” to understand where your hard-earned money is going and how various deductions impact your take-home pay.
Why You Should Check Your Payslip Regularly
- Keep Your Money in Check: Make sure taxes, social security, and other deductions are accurate. Every euro counts and errors can affect your take-home pay.
- Protect Your Benefits: Ensure contributions to pensions, health insurance, and benefits are correct to safeguard your future entitlements.
- Avoid Overpayments or Surprises: Spot mistakes early to prevent repaying overpayments or dealing with unexpected deductions later.
- Track Your Hard-Earned Pay: Know exactly where your money is going, from bonuses to taxes, so you can plan your finances confidently.
- Simplify Tax Time: Accurate payslips make filing taxes smoother and help you avoid penalties or missed refunds.
Comparing Net Salary in Italy and France: Key Factors to Consider
Deciding between living in France or Italy requires a thoughtful evaluation of not just net salary, but the broader financial and lifestyle implications. Here’s what you should weigh carefully:
Income Tax
Italy:
- IRPEF is the primary income tax, applied progressively:
- 23% for income up to €15,000.
- 25% for €15,001 to €28,000.
- 35% for €28,001 to €50,000.
- 43% for income above €50,000.
- Regional and municipal taxes are additional and vary by location, ranging from 1.23% to 3.33% (regional) and up to 0.8% (municipal).
France:
- Progressive income tax rates for 2024/25:
- 0% for income up to €10,777.
- 11% for €10,778 to €27,478.
- 30% for €27,479 to €78,570.
- 41% for €78,571 to €168,994.
- 45% for income above €168,994.
Additional social surcharges (CSG and CRDS) are levied at a combined rate of around 9.7% of gross income.
Social Security Contributions
Italy:
- Employees contribute 9.19% of their gross salary to INPS (social security). Employers contribute an additional 30-33%.
- Contributions fund pensions, unemployment benefits, and healthcare, but the employer's higher share makes take-home pay appear smaller compared to gross salary.
France:
- Employees contribute approximately 22% of their gross salary for social security, including healthcare, unemployment, and pension.
- Employers contribute around 45% to social charges, a higher percentage than in Italy.
Benefits and Allowances
Italy:
- Mandatory 13th-month pay (Tredicesima) provides an extra month’s salary in December, boosting annual income.
- Some sectors also offer 14th-month pay as a summer bonus.
- Tax credits are available for dependents, including children and spouses.
France:
- Employees benefit from universal public healthcare and generous family allowances for children.
- Additional tax reductions apply to large families and dependents.
Regional and Municipal Taxes
Italy:
- Regional and municipal taxes can vary significantly based on where you live, with wealthier regions like Lombardy having lower rates compared to Lazio or Campania.
France:
- Regional taxes have been largely abolished, with most deductions handled at the national level, simplifying tax compliance.
Tax-Free Thresholds
Italy:
- No national tax-free threshold exists, but deductions and allowances reduce taxable income.
France:
- A tax-free threshold of €10,777 ensures low-income earners pay no income tax, providing a more favourable system for lower salaries.
Net Salary Comparison
| Gross Salary (€) | Net Salary (Italy) (€) | Net Salary (France) (€) |
| 30000 | 18994.6 | 17896.7 |
| 35000 | 21643.6 | 19811.7 |
| 40000 | 24292.6 | 21726.7 |
| 45000 | 26941.6 | 23641.7 |
| 50000 | 29590.6 | 25556.7 |
| 55000 | 31840.03 | 27471.7 |
| 60000 | 34089.03 | 29386.7 |
| 65000 | 36338.03 | 31301.7 |
| 70000 | 38587.03 | 33216.7 |
| 75000 | 40836.03 | 35131.7 |
Personal Conclusion
Deciding between France and Italy depends on priorities. France offers lower net salaries due to higher taxes and social contributions but compensates with universal healthcare, strong family benefits, and a focus on work-life balance, including a 35-hour workweek.
Italy, with lower taxes and social contributions, provides higher take-home pay but ties benefits like pensions and healthcare closely to contributions. France’s cost of living is higher, especially in cities like Paris, while Italy offers more affordability, especially in southern regions. Choose France for structure and benefits; and Italy for culture, flexibility, and higher pay. Your choice depends on your lifestyle goals.
Net Pay France: Updated Tax Brackets and Take Home Pay Rules
Frequently Asked Questions:
How is my net salary calculated in Italy?
Net salary is determined by deducting social security contributions (INPS), income tax (IRPEF), regional and municipal taxes from your gross salary. Bonuses like the 13th-month pay are fully taxable.
What are the current income tax brackets in Italy?
Italy uses a progressive tax system with rates:
- 23% for income up to €15,000.
- 25% for €15,001–€28,000.
- 35% for €28,001–€50,000.
- 43% for income above €50,000.
Are there tax-free allowances in Italy?
While there's no universal tax-free threshold, deductions for dependents, private pensions, and certain expenses can reduce taxable income.
How do regional and municipal taxes affect my salary?
Regional taxes range from 1.23% to 3.33%, and municipal taxes can go up to 0.8%, varying by location. These add to your overall deductions.
How do I use a salary calculator for Italy?
Input your gross salary, region, and municipality into a salary calculator to estimate deductions and net pay. Tools also account for social contributions and bonuses.
Helpful resources:
Personalised net pay calculation in France, including adjustments for your circumstances, use the France Salary Simulator.
For a global salary calculator that compares net pay across multiple countries, explore the tool available at the link below.
Latest Italy Tax Updates: Agenzia delle Entrate
