How income tax works in Italy
Italy income tax is based on residence. Italian tax residents are taxed on worldwide income, while non-residents are taxed only on Italian-source income.
The national IRPEF brackets are 23% up to EUR 28,000, 35% from EUR 28,001 to EUR 50,000 and 43% above EUR 50,000. On top of that, most taxpayers also pay regional surtax and municipal surtax, which vary by location.
Employment income is usually subject to payroll withholding and social security. Employee INPS contributions are generally around 10% and the total employment social security burden is often around 40% of gross pay when employer and employee contributions are combined.
Income tax brackets in Italy
| Bracket | Rate | Notes |
|---|---|---|
| EUR 0 - EUR 28,000 | 23% | National IRPEF rate before surtaxes and credits. |
| EUR 28,001 - EUR 50,000 | 35% | Middle bracket for national IRPEF. |
| Over EUR 50,000 | 43% | Top national IRPEF rate. |
Tax rates at a glance
- Personal income tax
- 23% - 43%Progressive
- Regional surtax
- 1.23% - 3.33%
- Municipal surtax
- 0% - 0.9%
- Employee social security
- around 10%
- Tax on wages
- withholding applies
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
ExpatsEmployeesFreelancersHigh earnersDigital nomads
Watch out for
- Italian tax residence can be triggered by physical presence, residence or domicile for more than 183 days, counted with fractions of days.
- Modello 730 is available only in specific cases. Many self-employed people and taxpayers with foreign income use Redditi PF instead.
- The 2026 Budget Law increased the new-resident lump sum tax to EUR 300,000 and the family member amount to EUR 50,000 for arrivals from 1 January 2026.
- Crypto gains are taxed separately and, from the 2026 tax period, the standard flat rate rose to 33% in most cases.
Frequently asked questions
Do expats pay income tax in Italy?
Yes, if they are Italian tax residents. Residents are taxed on worldwide income, while non-residents are taxed only on Italian-source income.
What are the main IRPEF rates?
The national IRPEF brackets are 23% up to EUR 28,000, 35% from EUR 28,001 to EUR 50,000 and 43% above EUR 50,000, before regional and municipal surtaxes.
How do payroll taxes work in Italy?
Employment income is usually subject to payroll withholding and INPS social security. The employee share is often around 10%, while the employer bears most of the remaining payroll cost.