Payroll in Italy 2026: INPS, IRPEF, TFR and payslips

In Italy the employer is the withholding agent (sostituto d'imposta): it deducts IRPEF income tax and the employee's 9.19% INPS pension contribution from each payslip and pays both with form F24 by the 16th of the next month. On top of gross pay it bears at least 23.81% for pension, other INPS contributions, the INAIL premium and TFR.

Payroll in Italy at a glance

INPS contributions and other employer costs

The Istituto Nazionale della Previdenza Sociale (INPS) collects social security for private-sector employees. The pension contribution (IVS: invalidità, vecchiaia e superstiti) for employees in the general pension fund is 33%. Since January 2007 9.19% of it is borne by the worker, so the employer pays 23.81%.

Everything else varies. INPS explains that sickness, maternity, unemployment, wage guarantee (Cassa Integrazione Guadagni) and other contributions may not apply, or apply at different rates, depending on the company's sector, its size (for example more or fewer than 15 employees for the extraordinary wage guarantee fund), its legal form and the worker's category. Your INPS classification (inquadramento) sets the full rate, so Italy has no single employer percentage.

What to watch:

• The employer pays both shares and recovers the employee's share only from the current payslip: contributions paid late generally cannot be charged back to the employee.
• The extra 1% is applied month by month on pay above €4,685 and trued up at the end of the year.
• TFR (trattamento di fine rapporto) is severance pay that the employer accrues and pays when the employment ends: the year's pay divided by 13.5, and, according to the Ministry of Labour, generally 6.91% a month after the 0.50% contribution under Law 297/1982. Employees can send it to a supplementary pension fund; otherwise employers that averaged at least 60 employees in the previous year must pay it into the INPS Treasury Fund (Fondo di Tesoreria) in 2026 and 2027, falling to 50 from 2028 and 40 from 2032.
• INAIL insures against workplace accidents and occupational diseases. The employer pays the whole premium through an annual self-assessment due by 16 February (advance for the year plus the adjustment for the previous one, payable in four instalments), with the wage declaration by 28 February.

IRPEF: income tax on salaries

The employer withholds IRPEF (imposta sul reddito delle persone fisiche) from each payment and adjusts the year's total in the conguaglio, at the end of the year or when the employment ends. The taxable base is gross pay minus the employee's social security contributions. The 2026 Budget Law (Law 199/2025) cut the second rate from 35% to 33%:

The tax on €50,000 is therefore €13,700. For taxpayers with total income above €200,000 the law takes back the benefit of the lower rate.

From the gross tax the employer deducts the employee tax credit (detrazione per lavoro dipendente, Article 13 of the TUIR), reduced for part-year employment:

The credit rises by €65 when total income is between €25,001 and €35,000.

Two further measures from the 2025 Budget Law (Law 207/2024) reduce the tax wedge for employees, and pensioners are excluded:

• Up to €20,000 of total income, a tax-free sum equal to 7.1% of employment income up to €8,500, 5.3% from €8,500 to €15,000 and 4.8% above €15,000.
• From €20,000 to €40,000, an additional tax credit of €1,000 up to €32,000, falling to zero at €40,000.

The employer pays both through payroll; an employee whose final income is too high must repay them. Low earners may also receive the trattamento integrativo of up to €1,200 a year, mainly where total income does not exceed €15,000.

Regional and municipal surcharges (addizionale regionale and addizionale comunale) apply to the same income at the rates set by the region and the municipality of the employee's tax domicile, and are also withheld through payroll.

Minimum wage, working time and mandatory pay

• No statutory minimum wage. Minimum pay by sector and grade comes from the national collective agreements (CCNL). Since 28 June 2026 the payslip must name the CCNL applied by its unique alphanumeric code.
• Tredicesima and quattordicesima. The 13th month (tredicesima), usually paid in December, comes from the collective agreements rather than from a statute, and some CCNLs add a 14th month (quattordicesima). Both are part of taxable pay and of the INPS base.
• Working time and overtime. Normal working time is 40 hours a week. Overtime is recorded separately and paid with the premiums set by the collective agreement; where no agreement governs it, overtime needs the employee's consent and is limited to 250 hours a year.

Monthly payroll calendar and filings

1. 1Before the first hire: register the company with INPS online (Iscrizione e Variazione azienda) or through the ComUnica start-up filing.
2. 2Every hire: notify it with the UniLav form in the Ministry of Labour's Comunicazioni Obbligatorie system, which passes the data to INPS and INAIL. A termination must be notified within 5 days.
3. 3Every payday: give each employee except executives (dirigenti) a payslip (prospetto paga) showing the name and job title, the pay period, family allowances and every element of pay, each deduction separately and the CCNL code, signed, initialled or stamped by the employer.
4. 4By the 16th of the following month: pay the IRPEF withheld and the INPS contributions with form F24 (online for employers with a VAT number); if the 16th is a Saturday or a public holiday, the next working day is in time.
5. 5By the end of the following month: send the UniEmens return and complete the month in the Libro Unico del Lavoro, the register of each employee's pay, deductions and attendance.
6. 6Every year: the INAIL self-assessment by 16 February, the Certificazione Unica to each employee and to the Agenzia delle Entrate by 16 March, and the Modello 770 return of the year's withholdings.

Worked example: €2,500 a month, 13 times a year

A white-collar employee on a permanent contract, single, no dependants, employed for the whole of 2026 on €2,500 gross a month plus the tredicesima, so €32,500 a year. The employee pays only the 9.19% pension contribution, and the regional and municipal surcharges are left out because they depend on where the employee lives:

How the IRPEF is reached: 23% of €28,000 is €6,440.00 and 33% of the remaining €1,513.25 is €499.37, so the gross tax is €6,939.37. The employee tax credit is €1,910 × (€50,000 − €29,513.25) ÷ €22,000, with the ratio taken to four decimals (0.9312), which gives €1,778.59, plus €65 because income is between €25,001 and €35,000. Income is between €20,000 and €32,000, so the full €1,000 additional credit applies. The tax-free sum does not, because income is above €20,000.

The per-payment column is an average, because IRPEF is withheld payment by payment and settled in the conguaglio. Add the other INPS contributions for your sector and the INAIL premium to get the full employer cost.

Common mistakes

1. 1Forgetting the extra 1% on monthly pay above €4,685, or using the 2025 rate of 35% for the second IRPEF band.
2. 2Mishandling the tax-wedge relief: paying the tax-free sum above €20,000 of income, or the €1,000 credit above €40,000.
3. 3Paying below the CCNL, or leaving out its tredicesima and quattordicesima.
4. 4Missing the F24 on the 16th, the UniEmens or the Libro Unico entries at the end of the following month.
5. 5Leaving the CCNL code off the payslip, required since 28 June 2026.
6. 6Budgeting only gross pay plus 23.81%, without the other INPS contributions, the INAIL premium and the TFR.

How Clientlly helps

Clientlly ships a built-in payroll profile for Italy: the IRPEF bands and allowance as modelled, the employee and employer contribution rates and the contribution ceilings, checked against official sources in October 2026. It calculates gross to net and the employer contributions, produces payslips, and supports recurring payroll adjustments and imports of employees and payroll data; an administrator can adjust the rates in the payroll tax settings.

The profile models one employee in a primary job, single, without dependants, at national level, so the regional and municipal surcharges, your collective agreement and personal circumstances must be checked. Its IRPEF calculation approximates the official rules, folding the employee tax credit and the tax-wedge relief into the bands, so check the result against the Agenzia delle Entrate rules before you rely on it.

Alongside payroll, the human resources module handles leave requests and approvals with a leave calendar and HR documents, and attendance and time tracking records working hours and overtime. To close the books after the payroll run, see our month-end close checklist.