What is the Italy Income Tax?
Italy taxes employment income through IRPEF at three national bands — 23% up to €28,000, 33% from €28,000 to €50,000 (cut from 35% by the 2026 budget law) and 43% above — 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%/33%/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 €8,000, and regional plus municipal surcharges add roughly €835. Net pay lands near €27,489 a year — an effective rate of 31.3%.
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, 33% from €28,000 to €50,000 and 43% above, plus regional and municipal surcharges. The 2026 budget law cut the middle rate from 35% to 33%, with the benefit neutralised for incomes above €200,000.
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? Browse the Money Blog for worked guides.
Written by Gurjeet Singh, Sharpen Solutions. Last reviewed 15 Oct 2026. Sources: Agenzia delle Entrate — aliquote e calcolo dell’IRPEF (page updated 13 Jan 2026). How we check these numbers.