Italy: from gross to net, where the money goes

What the RAL is, and what it does not tell you

RAL stands for retribuzione annua lorda, gross annual salary: what the employer pays you in a year, before contributions and taxes. It is the number in contracts and job ads. The net is what arrives in your account.

There are three things the RAL does not tell you. How many payslips you get: 13 or 14, and with the same RAL the payslip of someone with the 14th-month pay is lighter. The TFR (severance pay), which the employer sets aside separately and you see at the end of the employment. And what you cost the company, which on top of the RAL also pays its own contributions.

The five steps, in order

From the RAL to the net you always go in this order:

1. INPS contributions: usually 9.19% of the RAL, plus 1% on the part above €56,224. They go to your pension, and no tax is paid on them.
2. Gross IRPEF: the 2026 brackets apply to the taxable amount, that is the RAL minus contributions. 23% up to €28,000, 33% from €28,000 to €50,000, 43% above.
3. Deductions: from the IRPEF comes off the employee deduction, higher for low incomes, which goes to zero at €50,000. Between €20,000 and €40,000 of income there is also the further deduction of the wedge cut, up to €1,000.
4. Extra sums: under €20,000 of income the wedge cut instead arrives as a tax-free sum on the payslip. Up to €15,000 you may also be entitled to the supplementary treatment: €1,200 a year.
5. Surtaxes: on the taxable amount you pay the regional and municipal ones, at the rates set by region and municipality. They are only paid if IRPEF remains to pay after deductions. What is left, divided by the number of monthly payments, is the average net per month.

The example: €30,000 in Puglia

A contract with 13 monthly payments, municipal surtax at 0.8%, no dependants. The year’s sum:

• INPS contributions at 9.19%: €2,757.00;
• gross IRPEF on the €27,243 taxable amount: €6,265.89;
• deductions: €2,044.26 for employee work and €1,000 of the wedge cut, so net IRPEF is €3,221.63;
• regional surtax €460.28 (Puglia raised its rates in May 2026) and municipal €217.94;
• net for the year €23,343.15: €1,795.63 a month over 13 payments, €1,667.37 if there were 14.

Why the more you earn, the less you keep out of 100

IRPEF is progressive: each extra euro is taxed at its bracket’s rate, and meanwhile the deductions fall. With a €15,000 RAL in Puglia about €1,083 a month arrives and, thanks to the wedge cut and the supplementary treatment, you keep 94 out of 100. With €30,000 you keep 78, with €60,000 about €2,851 a month, 62 out of 100.

Moving up a bracket never loses you money: the higher rate applies only to the part above it. What can lose you money are threshold bonuses. In Puglia, with a €16,518 RAL the taxable amount is €15,000 and the year’s net about €15,180; with €2 more the supplementary treatment disappears and the net falls to about €15,050.

Why one month’s payslip does not match the calculation

The calculation’s net is a year average. In the real payslip, month by month, other things come in:

• the 13th-month pay: IRPEF is withheld on it without deductions, which are already spread over the normal payslips, so it comes out lower than a normal month;
• the surtaxes: the ones you pay this year are last year’s, in installments. The regional one and the municipal balance in at most 11 installments, the 30% municipal advance in at most 9 installments from March;
• the 730: if you file it, from July the refund arrives on the payslip, or what you owe is withheld;
• overtime, bonuses, reimbursements and days of absence, which a calculation on the RAL does not know.

What to check in your payslip

• the RAL and the collective agreement level, compared with the hiring letter;
• the monthly payments, 13 or 14, and in which months the extra ones arrive;
• deductions for dependent family members: the employer applies them only if you ask with the proper declaration;
• the Certificazione Unica, which you receive in March: it is the year’s summary and you need it for the 730.