How Salary Deductions Work in Italy (2026 Guide)
Italy’s 2026 payroll story is a tax cut with a catch: the IRPEF middle rate fell from 35% to 33%, but the surtaxes most foreign guides ignore still add up to 4.23% at the top — and for newcomers, the post-2024 impatriate regime is worth more than any bracket change. Here’s everything on an Italian payslip this year.
IRPEF — the 33% middle-rate cut
Since the 2024 reform, national income tax (IRPEF) has just 3 brackets. The 2026 Budget Law (L. 199/2025) cut the middle rate from 35% to 33% from 1 January 2026: 23% up to €28,000, 33% from €28,001 to €50,000, 43% above €50,000. The cut saves up to €440 a year in the middle band — and above €200,000 of total income, a €440 reduction in the itemised-deduction envelope claws that saving back.
INPS — 9.19% plus 1% at the top
Employees pay 9.19% of gross pay to INPS (pension, unemployment, sickness and maternity), plus 1% on annual pay above €56,224. Contributions stop at the €122,295 annual ceiling (massimale) for workers first insured after 1 January 1996; pre-1996 contributors have no ceiling. INPS is deducted from gross before IRPEF is computed, and the employer adds roughly 30% on top (not your deduction, but why Italian labour costs run ~130% of salary).
Impatriate regime — the post-2024 rules
The regime for inbound workers (D.Lgs. 209/2023) now exempts 50% of Italian employment income from IRPEF for 5 years — 60% if you move with a minor child or a child is born or adopted during the regime — capped at €600,000 of income a year. Conditions: not Italian tax resident in the 3 prior tax years, a high qualification (a university degree plus a profession requiring it, or highly-qualified worker status with 5+ years of experience), work mainly in Italy, and a commitment to stay resident — leaving early triggers a clawback. The famous 70%/90% rates ended for new movers in 2024; they survive only for people who moved under the old regime (with its own extension rules).
Employment credit and the cuneo fiscale
Two mechanisms soften IRPEF for ordinary employees. The employment tax credit (detrazione lavoro dipendente) is €1,955 up to €15,000 of income, then tapers to zero at €50,000 — which creates a no-tax area of about €8,500 (23% × €8,500 = €1,955). On top of that, the cuneo fiscale (L. 207/2024) adds a non-taxable bonus for incomes up to €20,000 (7.1% up to €8,500, 5.3% to €15,000, 4.8% to €20,000 — about €960 at most) and an additional detrazione of up to €1,000 for incomes between €20,000 and €40,000. Child-related support now runs through the benefit-side Assegno Unico, not through tax credits.
Surtaxes — the part everyone forgets
On top of IRPEF, every employee pays a regional surtax (addizionale regionale, 1.23%–3.33% depending on region) and a municipal surtax (addizionale comunale, up to 0.9%), both on the same taxable base as IRPEF. Rome combines to 2.13% (1.23% + 0.9%); the maximum combination is 4.23%. Because they follow your comune of residence, two colleagues on identical pay in different cities net different amounts.
13th and 14th month — RAL, not monthly pay
Italian salaries are quoted as RAL (retribuzione annua lorda) — annual gross, which already includes the tredicesima, a legally required 13th month usually paid in December. Some sectors (commerce, tourism, food) also pay a quattordicesima (14th month). When comparing offers, always check whether a quoted monthly figure is RAL ÷ 12, ÷ 13 or ÷ 14 — the calculator handles all three and shows both the monthly average and the per-payslip net.
Worked examples
Example 1 — €3,000/month, 13 months, standard regime, Rome: Annual gross €39,000 → INPS €3,584.10 → taxable €35,415.90 → IRPEF €7,048.07 after credits → surtax €754.36 → net €27,613.47/year (€2,301.12/month average).
Example 2 — €5,000/month, 13 months, impatriate 50%, Rome: Annual gross €65,000 → INPS €6,061.26 → half of €58,938.74 exempt → taxable €29,469.37 → IRPEF €4,142.46 after credits → surtax €627.70 → net €54,168.58/year (€4,514.05/month average).
Common mistakes
1. Comparing monthly figures across countries without RAL. A €3,000 Italian monthly salary is €39,000 a year, not €36,000 — the 13th month changes every comparison.
2. Using pre-2026 rates. The 35% middle bracket and the 70%/90% impatriate rates are both gone for 2026.
3. Ignoring the surtaxes. At Rome rates they add €754 a year on a €39,000 salary — and up to 4.23% at the maximum.
Try it: Italy salary calculator →
Italy — frequently asked questions
Do I pay tax on the 13th month?
Yes — the tredicesima counts as employment income and is taxed at your marginal rates, with withholding applied during the year and a final year-end adjustment.
Can I claim the impatriate regime if I move to Italy in 2026?
If you meet the conditions — non-resident in Italy for the 3 prior years, a high qualification, and work mainly in Italy — the post-2024 regime exempts 50% of your Italian employment income for 5 years (60% with a minor child). The old 70%/90% rates only applied to pre-2024 movers.
What is the no-tax area for employees?
About €8,500 a year — the €1,955 employment tax credit fully offsets 23% IRPEF at that level, so no IRPEF is due below it.
Do regional and municipal surtaxes apply on top of IRPEF?
Yes — regional surtax of 1.23%–3.33% and municipal surtax of up to 0.9%, calculated on the same taxable income. The calculator defaults to Rome (2.13% combined).