Moving to Italy for work: how your salary is taxed
Italy takes 9.19% of your salary for INPS and charges IRPEF at 23%, 33%, 43% on the rest, before generous employee deductions and regional and municipal surcharges. On a €40,000 RAL in Milan you take home about €2,151 in each of 13 payments. If you qualify for the impatriati regime, only half of your salary is taxed for five years.
How your salary is taxed
- INPS: 9.19% of gross pay for your pension, plus 1% on pay above €56,224. Your employer pays about 30% more on top.
- IRPEF: 23% up to €28,000, 33% up to €50,000 (cut from 35% in 2026) and 43% above, charged on pay after INPS.
- Employee deduction: the detrazione per lavoro dipendente cancels IRPEF completely on low salaries and fades out by €50,000. From €20,000 to €40,000 an extra tax-wedge deduction of up to €1,000 is added, and up to €20,000 you receive a tax-free payment instead.
- Regional and municipal surcharges: from about 1.23% to 3.33% for the region and up to about 1% for the city, charged on the same taxable income.
Because the deductions phase out, the marginal rate in the middle is higher than the brackets suggest: at €36,000 each extra €1,000 costs you about 61% in tax and contributions.
Worked example: €40,000 a year
Milan, single, 13 payments, 2026
| Item | Year | Per payment | Monthly average |
|---|---|---|---|
| Gross salary | €40,000.00 | €3,076.92 | €3,333.33 |
| INPS social security | −€3,676.00 | −€282.77 | −€306.33 |
| IRPEF income tax | −€7,540.16 | −€580.01 | −€628.35 |
| Regional surcharge | −€533.07 | −€41.01 | −€44.42 |
| Municipal surcharge | −€290.59 | −€22.35 | −€24.22 |
| Take-home pay | €27,960.18 | €2,150.78 | €2,330.02 |
Take-home pay at common salaries
| RAL | Milan, per payment | Rome, per payment | Milan, a year | With impatriati, a year |
|---|---|---|---|---|
| €25,000 | €1,582 | €1,560 | €20,570 | €23,903 |
| €30,000 | €1,802 | €1,793 | €23,425 | €28,098 |
| €35,000 | €2,002 | €1,972 | €26,032 | €31,784 |
| €40,000 | €2,151 | €2,114 | €27,960 | €35,182 |
| €50,000 | €2,505 | €2,457 | €32,568 | €42,272 |
| €60,000 | €2,889 | €2,829 | €37,555 | €49,637 |
| €80,000 | €3,641 | €3,558 | €47,339 | €63,639 |
| €100,000 | €4,394 | €4,287 | €57,122 | €77,632 |
13 payments a year, single, no dependants. Impatriati figures for Milan with the standard 50% exemption.
RAL, the 13th month and TFR
Job offers in Italy quote the RAL (retribuzione annua lorda), the gross yearly salary. It is usually paid in 13 instalments, the 13th in December; some collective agreements add a 14th in the summer. On top of the RAL your employer sets aside TFR, severance pay of about one month's pay a year, which you receive when you leave or can send to a pension fund. It is not part of your monthly take-home pay. Since 1 July 2026, private-sector employees hired for the first time are enrolled automatically in a supplementary pension fund, which then receives their TFR, unless they opt out within 60 days.
The impatriati regime
If you move your tax residence to Italy and qualify, only 50% of your employment income is subject to IRPEF and the surcharges, or 40% if you move with a minor child or have one while in the regime, for 5 years and up to €600,000 of income a year. INPS is still charged on the full salary. The main conditions:
- You were not resident in Italy for the previous three tax years, or six or seven if you work for the same employer or group as before.
- You are highly qualified or specialised and work in Italy for most of the year.
- You commit to staying resident in Italy for at least four years, or repay the benefit.
Tax residence
You are tax resident in Italy if, for most of the tax year (183 days, or 184 in a leap year), you have your residence or your domicile there, or are physically present in Italy. Since 2024 domicile means the place where your personal and family relationships are mainly centred, and any part of a day spent in Italy counts as a whole day, so working remotely from Italy can be enough. Being registered with the anagrafe of a municipality for most of the year makes you presumed resident unless you prove otherwise.
Residence applies to the whole calendar year: Italian law has no split year, so in the year you arrive your income from before the move can be taxable in Italy too. A few tax treaties, including those with Germany and Switzerland, split the year; for other countries the treaty's tie-breaker rules decide where you are resident.
First steps after you arrive
- Get your codice fiscale, the tax code you need for your job, bank and lease, from the Agenzia delle Entrate or an Italian consulate.
- Register your residence with the anagrafe of your municipality within 20 days of moving.
- Register with the national health service (SSN) at the local health authority (ASL), which is compulsory for employees from outside the EU, and choose a family doctor.
- Tell your employer about deductions: dependants, and the impatriati regime if you qualify.
- Keep your Certificazione Unica, the yearly pay and tax statement your employer gives you in March.
The tax return
Your employer withholds tax each month and settles the year in the conguaglio, usually with your December pay and at the latest by 28 February. If your only income is that salary and the surcharges were withheld, you do not need to file. Otherwise you file the 730, pre-filled by the Agenzia delle Entrate, by 30 September of the following year, and any refund is paid through your salary from about July.
The 730 is not available if you were not resident in Italy in the year of the income or the year you file, so for the year you arrive you usually file the Modello Redditi PF instead, for example to report foreign income or claim the impatriati regime.
The flat tax for wealthy new residents
People moving to Italy with large foreign income can instead pay a flat €300,000 a year (plus €50,000 for each family member included) on all their income from abroad, for up to 15 years. That amount applies to people who move their residence from 2026; it was €200,000 for those who moved from 10 August 2024. Italian income, including a salary from an Italian employer, is still taxed normally.
What changes in 2027
A new consolidated income tax code (D.Lgs. 117/2026) replaces the current one from 1 January 2027. It mainly reorganises the rules: the impatriati regime moves to a new article with the same wording. The 2027 Budget had not yet been presented to Parliament in mid-October 2026; we will update the calculator if it changes IRPEF or the tax-wedge measures.
Sources
- TUIR article 11 (IRPEF brackets, version in force in 2026)
- Legge 199/2025 (2026 Budget), article 1 paragraph 3: second bracket cut to 33%
- Legge 207/2024, article 1 paragraphs 4 to 9 (tax-wedge measures)
- INPS: circolare 6/2026 (2026 thresholds and contribution ceiling)
- D.Lgs. 209/2023 article 5 (impatriati regime)
- TUIR article 2: tax residence
- Agenzia delle Entrate: circolare 20/E of 4 November 2024 (tax residence)
- Agenzia delle Entrate: tax code for foreign citizens
- DPR 223/1989 article 13: registering a change of residence within 20 days
- D.Lgs. 286/1998 article 34: SSN registration for non-EU workers
- Agenzia delle Entrate: 730/2026 instructions
- TUIR article 24-bis: flat tax for new residents
- D.Lgs. 252/2005 article 8: automatic pension fund enrolment
- D.Lgs. 117/2026: new income tax code from 2027
- Our methodology and the full list of sources for the calculator
Frequently asked questions
How much is €40,000 after tax in Italy?
In Milan, a €40,000 RAL leaves €27,960 a year in 2026, or €2,151 in each of 13 payments, after €3,676 INPS, €7,540 IRPEF and €824 of regional and municipal surcharges.
Is there an expat tax regime in Italy?
Yes. Under the impatriati regime, qualifying people who move their tax residence to Italy are taxed on only 50% of their employment income (40% with a minor child) for 5 years, up to €600,000 a year. On €80,000 in Milan it is worth €16,301 a year.
Do I have to file a tax return in Italy as an employee?
Not if your only income is a salary from an Italian employer that withheld the tax correctly. You file (usually the 730) if you had other income, want to claim deductions such as medical expenses or rent, or need to claim the impatriati regime your employer did not apply.
When am I tax resident in Italy?
When, for most of the tax year (183 days, or 184 in a leap year, counting part days as whole days), you have your residence or your domicile (the centre of your personal and family relationships) in Italy, or are physically present there. Being registered with an Italian municipality for most of the year makes you presumed resident unless you prove otherwise. Italian law has no split year; only a few tax treaties, such as those with Germany and Switzerland, allow one.
This guide explains the general rules for employees and is not personal tax advice. Rules change and individual situations differ, so check with the tax authority or a tax adviser before making decisions. Spotted something out of date? Email [email protected].