Italy TFR (severance pay) calculator 2026

How much TFR you accrue year by year, how much comes from revaluation and how much is left, estimated, at the end of employment.

Gross TFR

€10,890

after 5 years, before IRPEF

about €8,560 net
IRPEF about €2,330
average rate 23%

With €30,000 a year for 5 years you accrue about €10,890 of gross TFR: €10,361 of accruals and €529 of revaluation, already taxed at 17%.

After the IRPEF of separate taxation, about €8,560 is left: out of every €100 of gross TFR, €79 net.

The gross TFR, split

Net (estimate)€8,56079%
IRPEF at the end of employment (estimate)€2,33021%

I’m not an accountant or a financial advisor. This is an estimate, for information only. Check with a professional before you decide.

Your numbers

example: change the numbers

Annual gross pay

Usually the RAL: everything you receive on a non-occasional basis counts, expense refunds excluded. The collective agreement may exclude some items.

Years of work

With the same employer. Whole years are counted.

Pay rise every year

Seniority steps and contract renewals, on average. If you do not know, leave 0.

Average inflation

It is used for the revaluation: every year the TFR grows by 1.5% plus three quarters of inflation. 2% is the European Central Bank’s target.

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The TFR year by year

Year	Year’s accrual	Revaluation	17% tax	TFR at year end
1	€2,072.22	€0.00	€0.00	€2,072.22
2	€2,072.22	€62.17	€10.57	€4,196.04
3	€2,072.22	€125.88	€21.40	€6,372.75
4	€2,072.22	€191.18	€32.50	€8,603.65
5	€2,072.22	€258.11	€43.88	€10,890.10
Total	€10,361.11	€637.34	€108.35	€10,890.10

How it works

Each year an amount is set aside: the year’s pay divided by 13.5 (Civil Code, art. 2120).
From that amount 0.50% of the pay is taken off: it is a contribution to the INPS that the employer pays and then recovers from your TFR (law 297/1982). You do not see it on your payslip, but it weighs on the TFR.
Every December 31 the TFR accumulated up to the previous year (not the year’s accrual) grows by 1.5% plus 75% of the inflation measured by ISTAT. The employer immediately withholds 17% on the revaluation.
At the end of employment the accruals pay IRPEF under separate taxation: a reference income is calculated (accruals × 12 ÷ years), the average IRPEF rate of that income is taken with the 2026 brackets and a small tax credit is subtracted (decree of March 20, 2008).

Worked example

€30,000 a year for 5 years, inflation at 2%. Each year’s accrual: 30,000 ÷ 13.5 = €2,222.22, minus €150.00 of contribution = €2,072.22. Revaluation of 3% a year (1.5% plus 75% of 2%): in 5 years €637.34, minus €108.35 of 17% tax. Gross TFR: €10,890.10. Separate taxation: reference income 10,361.11 × 12 ÷ 5 = €24,866.67, all in the first bracket, average rate 23%; tax €2,383.06 minus €53.06 of tax credit, about €2,330. Estimated net: about €8,560.

Sources

Numbers checked on September 29, 2026

Good to know

The net is an estimate. The employer withholds IRPEF at the average rate; then the Agenzia delle Entrate reassesses with the average rate of the previous 5 years and may ask you for a difference or refund you. How that rate is calculated is not published in full: it is not calculated here.
It uses the 2026 IRPEF brackets. By law, if they are more favorable, the 2006 ones apply to the TFR: this comparison is not done here.
Illness, accident, maternity and wage supplement fund do not lower the TFR: by law what counts is the pay you would have had by working. It does not, however, consider advances already taken, TFR accrued before 2001 and fractions of a year.
It applies to the TFR left with the company. If it goes to a pension fund it follows other rules, for returns and for taxes.
The 17% on the revaluation is withheld by the employer year by year: in the end that part pays nothing more.

Frequently asked questions

How is the TFR calculated?

Each year the annual pay divided by 13.5 is set aside, minus the 0.50% that the employer pays to the INPS and takes off the accrual. With €30,000 a year: €2,222.22 minus €150 makes €2,072.22. Every December 31 the TFR already accumulated is revalued by 1.5% plus 75% of inflation.

When do you get the TFR?

You are owed it in any case when the employment ends: resignation, dismissal, end of a fixed-term contract, retirement (Civil Code, art. 2120). The payment times are usually found in the collective agreement.

Can I ask for an advance on the TFR?

Yes, after at least 8 years with the same employer: up to 70% of what you have accrued, once only, for extraordinary medical expenses or to buy a first home for yourself or your children. Each year the requests granted may be at most 10% of those entitled and 4% of employees; the contract may provide better conditions.

How is the TFR taxed?

With separate taxation: it is not added to the other income of the year, but pays the average IRPEF rate of a reference income (the accruals times 12, divided by the years). In the example the average rate is 23% and the IRPEF about €2,330. Then the Agenzia delle Entrate rechecks with the income of the previous 5 years.

Is it better to leave the TFR with the company or in a pension fund?

It depends on your situation, and it is not decided with a calculation: in a pension fund the TFR follows other rules, for returns and for taxes. This calculation applies to the TFR left with the company. Note: from July 1, 2026 those hired for the first time in the private sector are automatically enrolled in their contract’s pension fund, and have 60 days to opt out. The funds’ rules are explained by the COVIP, the authority that supervises pension funds.