How Italian net pay is calculated

Two steps, not one

Gross and net are not separated by a percentage. They are separated by two withholdings in sequence, and the fact that there are two of them, in that order, is the only thing you really need to understand.

1. the employee's INPS contributions come off the gross;
2. IRPEF is charged on what remains.

The second step does not start from the gross. Art. 51, comma 2, lett. a) of the TUIR says that compulsory social and welfare contributions "non concorrono a formare il reddito"¹: the employment income the tax applies to is already net of those contributions.

On a 35.000 € annual gross:

Applying the IRPEF brackets straight to the contract's 35.000 € overstates the year's tax by 1.780,97 €. It is the most expensive mistake available on this calculation, and it happens at the very first step.

The INPS contributions: one rate and two thresholds

The employee share is normally 9,19% of gross pay, for a private-sector employee in the Fondo Pensioni Lavoratori Dipendenti. The company pays a much larger share, but that one does not concern you: it never appears in your net.

Read that 9,19% carefully. It is not a percentage written into a statute the way the IRPEF rates are: it depends on the pension scheme, the sector and the codes on the employer's INPS position. The public sector, apprentices and several special funds differ. Your own rate is on your payslip, on the employee-contributions line.

Above that rate sit two thresholds, set every year by an INPS circolare. For 2026 these are the figures²:

The first threshold adds one percentage point to the employee's share, under art. 3-ter of decreto-legge 384/1992³. It applies to the excess only: on a 60.000 € gross the excess is 3.776 €, so the extra contribution is 37,76 € a year. Not 600 €. INPS withholds it month by month against a monthly 4.685 € threshold and settles it at the year-end conguaglio.

The second threshold runs the other way: above 122.295 € no IVS contribution is due, so the effective rate starts to fall. But the ceiling applies only to workers first enrolled in a compulsory scheme after 31 December 1995⁴, i.e. anyone who started work from 1996. With an earlier enrolment there is no ceiling and contributions are due on the whole gross.

IRPEF: the brackets, and then the credits

The three bracket rates of art. 11 TUIR apply to the taxable income. For 2026 the second one fell from 35% to 33% in the budget law⁶, and it is worth knowing because many published tables still print 35%.

"By brackets" means in slices: crossing 28.000 € does not re-tax the whole income at 33%, only the part above it. One euro past the line costs 33 cents.

The result of that step is the gross tax. From there you subtract the art. 13 TUIR detrazioni⁵, which for employment income follow a banded formula on total income:

A further 65 € is added between 25.000 € and 35.000 € of income, and, for employees only, an ulteriore detrazione of 1.000 € between 20.000 € and 32.000 €, tapering to zero at 40.000 €⁷.

A detrazione, though, never becomes a refund: art. 11, comma 3 of the TUIR applies it "fino alla concorrenza" of the tax. Where it is worth more than the tax, the difference is lost and IRPEF stops at zero.

The number that decides everything else

Here is the least obvious consequence of having two steps. The art. 13 detrazioni and both legge 207/2024 benefits are keyed on the reddito complessivo, and for an employee with a single income the reddito complessivo is exactly the gross net of contributions. The same reduced figure that governs the brackets governs the top-ups too.

A sharp example. On a 22.000 € annual gross the contributions are 2.021,80 €, so the total income is 19.978,20 €: 21,80 € below the 20.000 € line that legge 207/2024 uses to separate its two benefits. The result:

• you get the payroll top-up, 958,95 €;
• you do not get the 1.000 € ulteriore detrazione.

Read on the 22.000 € gross instead, the same contract would get the opposite pair: no top-up and a 1.000 € credit. Two errors at once, from one wrong number.

The surcharges are a switch

Above IRPEF sit two local taxes, the regional and the municipal surcharge, charged on the same base. Your region and your comune set the rates, so they have to be looked up: in the Dipartimento delle Finanze tables, or straight off your payslip.

The surprising part is the condition. The municipal surcharge "è dovuta se per lo stesso anno risulta dovuta l'imposta sul reddito delle persone fisiche"⁹, counting the detrazioni. It is all or nothing: if net IRPEF is zero you pay no surcharge at all, and one cent of IRPEF due brings both back in full on the whole base. They do not taper: they switch off.

When the net exceeds the gross

It sounds impossible and it is what the law says. The 1.200 € trattamento integrativo of decreto-legge 3/2020⁸ and the payroll top-up of legge 207/2024 are not tax credits: they are transfers, paid through the payslip and not limited by the tax.

On a 9.100 € annual gross the total income is 8.263,71 €, the gross tax 1.900,65 € and the detrazione 1.955 €: net IRPEF is zero, so neither surcharge is due either. But 1.200 € of trattamento integrativo and 586,72 € of top-up are still paid. The year's net is 10.050,43 € on a 9.100 € gross.

And one threshold is worth knowing, because it is steep. The trattamento integrativo is due where the gross tax exceeds the art. 13 detrazione "diminuita dell'importo di 75 euro", i.e. 1.880 €. Translated into contract terms, that test falls between 9.001 € and 9.002 € of annual gross: at 9.001 € the gross tax is 1.879,98 € and the test fails by two cents; at 9.002 € it is 1.880,19 € and the 1.200 € arrives. One euro more of annual gross is worth 1.200,98 € of net pay, about 100 € a month.

Why the tredicesima is smaller

The detrazioni are an annual amount, which the employer spreads across the twelve ordinary payslips. There is no thirteenth twelfth of relief to apply to the extra payment: that payment is taxed in full.

It is not a higher rate. It is a missing credit.

On a 35.000 € gross over 13 payments, the same 2.692,31 € of gross per payslip produces two very different nets:

Those 400,11 € of difference are why dividing the annual net by the payments does not give monthly pay: the average matches none of your payslips. The tredicesima article goes into how the twelfths accrue; the tredicesima calculator starts from the monthly pay.

A note on method, because almost every table online gets it wrong: the IRPEF on the extra payment must be computed as a difference: the whole year's gross tax minus the gross tax of the twelve ordinary payslips alone. Applying a single rate to the whole amount is wrong every time the payment straddles a bracket.

The worked example

A 35.000 € annual gross, 13 payments, a 1,23% regional surcharge and a 0,8% municipal one.

The total take is 8.903,79 €, 25,44% of the contract's gross. And there is no percentage to reuse: every layer is progressive, so that share moves with the income.

A rule like "net is 70% of gross" is thousands of euro out at both ends.

What is left out, and which way it errs

A calculation that starts from the gross stops at the detrazioni that depend on the amount. Left out are the credits for dependants in art. 12 TUIR and the 19% deductible expenses (medical costs, mortgage interest, education) which depend on your receipts, not on the contract.

That has a precise direction, and it is worth knowing: those items can only reduce the tax, so the net you work out this way is a floor for anyone entitled to them, not an estimate that could err either way. If your real net is higher, that is the likeliest reason.

Also out of scope are fringe benefits, overtime and performance bonuses taxed at 5%, and pension-fund contributions: for deductible charges there is a dedicated field in the IRPEF calculator.

From the gross to your own number

The formula is two lines, the variables are not: your contribution rate, the number of payments in your CCNL, your region's and your comune's rates, the bracket the year lands in. The net salary calculator puts them together and shows every line of the journey, keeping the ordinary month's net apart from the tredicesima's instead of handing you an average.

If the tax side interests you for its own sake (how much each bracket weighs, how the detrazione moves, what deductible charges do), the IRPEF calculator starts straight from the taxable income, and the 2026 IRPEF rates and brackets carry all the tables.