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Italian tax-wedge cut: the tax-free payroll sum

If your total income is EUR 20,000 or less, your employer adds a tax-free sum to your pay: 7.1% of employment income up to EUR 8,500, 5.3% up to EUR 15,000 and 4.8% above. The rate is picked on your income scaled up to a full year, then applied to what you actually earned.

2026 rules — verified on September 25, 2026Free, no account

This content is part of the path: Hiring your first employee· Step 5 of 11· Next step: Italian severance pay (TFR): yearly accrual and revaluation

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Sources and assumptions

  • Gazzetta Ufficiale — tax year 2026, verified on September 25, 2026
    Excerpt from the source : « che hanno un reddito complessivo non superiore a 20.000 euro e' riconosciuta una somma, che non concorre alla formazione del reddito »
  • Gazzetta Ufficiale — loi 207/2024 — tax year 2026, verified on September 25, 2026
    Excerpt from the source : « a) 7,1 per cento, se il reddito di lavoro dipendente non e' superiore a 8.500 euro; »
  • Gazzetta Ufficiale — loi 207/2024 — tax year 2026, verified on September 25, 2026
    Excerpt from the source : « a) 7,1 per cento, se il reddito di lavoro dipendente non e' superiore a 8.500 euro; »
  • Gazzetta Ufficiale — loi 207/2024 — tax year 2026, verified on September 25, 2026
    Excerpt from the source : « b) 5,3 per cento, se il reddito di lavoro dipendente e' superiore a 8.500 euro ma non a 15.000 euro; »
  • Gazzetta Ufficiale — loi 207/2024 — tax year 2026, verified on September 25, 2026
    Excerpt from the source : « b) 5,3 per cento, se il reddito di lavoro dipendente e' superiore a 8.500 euro ma non a 15.000 euro; »
  • Gazzetta Ufficiale — loi 207/2024 — tax year 2026, verified on September 25, 2026
    Excerpt from the source : « c) 4,8 per cento, se il reddito di lavoro dipendente e' superiore a 15.000 euro. »

Calculation assumptions

  • Rates and thresholds of Law no. 207/2024, art. 1, paragraphs 4 and 5, as in force for tax year 2026.
  • Employment income is scaled to a full year by days, over a 365-day year; total income is entered net of the main home and its appurtenances.
  • Pension income does not qualify. The extra allowance for incomes above EUR 20,000 and the trattamento integrativo supplement are not included.

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This result is provided for information purposes only and does not constitute personalised tax advice. Check your situation with the tax authorities or a professional.