Payroll taxes
in Italy.

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What is the average employer tax rate in Italy?

Italy has both a corporate income tax (imposta sul reddito sulle società, or IRES) and a regional production tax (imposta regionale sulle attività produttive, or IRAP). The average combined tax is just under 30 percent.

Italy – 2023 CIT tax rates

Taxable income (EUR)	Tax rate
All income (IRES)	24%
All income (IRAP)	3.9%

What is the average employee tax rate in Italy?

Employees in Italy pay both income tax (which is withheld and remitted by the employer) and payroll tax. The average employee payroll contribution tax rate in Italy is 10%. Income tax is an additional tax and it depended on how much the employee makes yearly.

The breakdown of income tax based on income is as follows:

Italy – Individual Income Tax

Taxable Income (EUR)	Tax rate 2023
Up to 15,000 EUR	23%
15,000 – 28,000 EUR	25%
28,000 – 50,000 EUR	35%
Over 50,000 EUR	43%

Employer contributions in Italy

Employers in Italy contribute to many social security benefits for employees. This is similar to what is known as ‘payroll tax‘ in the United States. The below social security programs are covered in Italy for all employees:

Health insurance
Retirement pension insurance
Unemployment insurance
Sickness benefit insurance
Maternity and paternity leave insurance
Social mobility
Accidents, death in the workplace and occupational disease insurance.

Contributions are made by both employers and employees, with the total amount coming to around 40 percent of an employee’s gross compensation: The employer pays around 30 percent, and the employee 10 percent.

Italy – Employer contributions

Contribution item	Contribution rate
National Pension Scheme	10%
Other Contributions	20%

Employee contributions in Italy

Employees contribute to the same above-mentioned social security programs as their employers.

Italy – Employee contributions

Contribution item	Contribution rate
National Pension Scheme	3.3%
Other Contributions	6.6%

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FAQs

What is the tax bureau of Italy called?

The Italy Tax Administration is a branch of the Ministry of Finance. The National Institute for Social Security (INPS) is the bureau in Italy that handles social security contributions.

Is there an employer payroll tax contribution in Italy?

Yes. Employer’s in Italy contribute to many social security benefits for its employees. The below social securities are covered in Italy for all employees:

Health insurance
Retirement pension insurance
Unemployment insurance
Sickness benefit insurance
Maternity and paternity leave insurance
Social mobility
Accidents, death in the workplace and occupational disease insurance

How does the payroll tax system of Italy work?

Each paycheck the employer must withhold roughly 10% of the employee’s salary to contribute to national social security benefits. In addition, the employer needs to contribute 30% of the employee’s salary to the same social security benefits.

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