What is the Italy Income Tax?
Italy taxes employment income through IRPEF at three national bands — 23%, 35% and 43% — plus regional (1.23%–3.33%) and municipal (up to 0.9%) surcharges that vary by where you live.
INPS social contributions of about 9.19% are deducted first, and an employment deduction (detrazione da lavoro dipendente) reduces IRPEF, tapering to zero around €50,000.
Formula & worked example
IRPEF = 23%/35%/43% bands − employment deduction
Total = IRPEF + regional + municipal surcharges
Worked example: a €40,000 salary pays €3,676 of INPS, leaving a base of €36,324. IRPEF after the employment deduction is about €8,166, and regional plus municipal surcharges add roughly €835. Net pay lands near €27,320 a year — an effective rate of 31.7%.
How to use this italy income tax calculator
- Enter your gross annual salary (RAL).
- Set the regional and municipal surcharges for your comune.
- Italian salaries are usually paid in 13 or 14 instalments.
- Note the employment deduction, which materially cuts tax at lower salaries.
Smart tips
- Italian job offers quote RAL (gross annual salary). Net pay is typically 60–70% of it.
- The tredicesima — a 13th month payment at Christmas — is standard, and some contracts add a 14th in June.
- Regional and municipal surcharges vary meaningfully; the same salary nets differently in Milan versus Rome.
- The impatriate regime offers large exemptions for workers relocating to Italy, subject to conditions.
- Supplementary pension (previdenza complementare) contributions are deductible up to an annual limit.
Frequently asked questions
What are Italian income tax rates?
IRPEF at 23% up to €28,000, 35% to €50,000 and 43% above, plus regional and municipal surcharges.
What is INPS?
The Italian social security institute. Employees contribute about 9.19% of salary, with employers paying substantially more.
What is the tredicesima?
A 13th monthly salary paid at Christmas, standard in most Italian employment contracts.
What is the impatriate regime?
A tax incentive exempting a large share of employment income for qualifying workers who move their tax residence to Italy.
Want the theory behind the numbers? Read our European tax guides on the Money Blog.