How much is my income taxed?
Have you just received a job offer from an Italian company, looked at the gross salary and wondered what the amount would be after taxes? First of all, it is important to notice that your income is taxed on three different institutional levels: the State, the Region and the Municipality. We will analyse all of these in detail.
National taxation
As you might expect, national taxation is the most consistent one, and it varies from 23% to 43%. Italy is based on a progressive taxation system, where the higher the income, the more your taxes will increase.
National taxation
As you might expect, national taxation is the most consistent one, and it varies from 23% to 43%. Italy is based on a progressive taxation system, where the higher the income, the more your taxes will increase.
Depending on your gross annual salary, the taxation will be the following:
INCOME
TAX BRACKET
From
To
0
€15,000
23%
€15,000
€28,000
27%
€28,000
€55,000
38%
€55,000
€75,000
41%
€75,000
43%
Regional taxation
Depending on your region of residency, you will also be charged a Regional Income Tax, which ranges from 0.9% to 1.4%.
Municipal taxation
Finally, each taxpayer has to pay a Municipal Tax to the city or town he lives in. This tax will vary from 0.1% to 0.8%.
Depending on your region of residency, you will also be charged a Regional Income Tax, which ranges from 0.9% to 1.4%.
Municipal taxation
Finally, each taxpayer has to pay a Municipal Tax to the city or town he lives in. This tax will vary from 0.1% to 0.8%.
Tax reductions
There is no need to worry because the Italian tax system provides for many deductible expenses, including medical costs, rent, transport passes, educational expenses and many others. You can find an exhaustive list here (Cafacli.it). These expenses must be declared in your tax return and will be deducted from your tax bill.
Tax benefits for new residents
For foreigners who decide to relocate and work in Italy, there is also an exciting tax incentive, i.e. a 70% reduction of the taxable income. This means that for the first 5 years following relocation (extendable to 10 years in some cases), a person will only have to pay 30% of the taxes that are due under normal conditions.
For further details, please refer to our website to find out all the benefits of this measure.
If you would like to know if you are eligible, or would like to take advantage of it, please do not hesitate to contact us:
Income Taxed Expat Italy / Income Taxed Expat Italy
