Italy’s personal income tax (IRPEF) is progressive: your taxable income is sliced into bands, and each slice is taxed at its own rate. Since 2025 the national schedule uses three brackets. Payroll and pensions withhold tax monthly using these bands, then the annual return reconciles the numbers with deductions and credits. Below you’ll find the 2025 bands, the exact calculation method, worked examples, and how regional and municipal add-ons interact with the national IRPEF.
Contents
The 2025 national IRPEF bands at a glance
For tax year 2025 the three national brackets are:
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23% on income up to €28,000
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35% on the slice from €28,001 to €50,000
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43% on the slice above €50,000
IRPEF applies to your taxable income (reddito complessivo net of deductible items). The calculation is cumulative: you pay 23% on the first €28,000, then 35% only on the part between €28,001 and €50,000, and 43% on anything above €50,000.
Shortcut formulas you’ll see on payslips
Many HR/payroll systems display the closed-form equivalents:
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Income ≤ €28,000 → 23% of the whole amount.
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Income €28,001–€50,000 → €6,440 + 35% of the part over €28,000.
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Income > €50,000 → €6,440 + €7,700 + 43% of the part over €50,000
(because €6,440 = 23% of €28,000; €7,700 = 35% of €22,000).
These formulas are just a compact way to present the progressive bands.
Worked examples (national IRPEF only)
To keep things clear, these illustrations exclude deductions, tax credits, and local add-ons. They show the national IRPEF on the taxable base.
Example 1 — €24,000 taxable income
All taxed at 23% → €24,000 × 23% = €5,520.
Example 2 — €40,000 taxable income
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First €28,000 at 23% → €6,440
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Remaining €12,000 at 35% → €4,200
Total IRPEF: €10,640
Example 3 — €55,000 taxable income
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First €28,000 at 23% → €6,440
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Next €22,000 at 35% → €7,700
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Last €5,000 at 43% → €2,150
Total IRPEF: €16,290
Your actual tax due may be lower after credits (for work or pension income, dependents, mortgage interest, and other qualifying expenses) and may be higher once local add-ons are included.
What counts as taxable income (and what reduces it)
IRPEF is computed on your taxable income after deductible items (oneri deducibili)—for example, certain social-security contributions or specific alimony—are subtracted from gross income. Once you get the taxable number, you apply the bands above to obtain gross IRPEF. Then you reduce that amount with tax credits (detrazioni), most notably:
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Employment income credits (for employees and similar categories)
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Pension income credits (for pensioners)
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Family-related credits (e.g., dependent spouse/children, where applicable)
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Expense-based credits (e.g., medical expenses, education, certain building works, insurance premiums within legal limits)
Credits apply after you’ve calculated IRPEF on the bands, so two people with the same income can owe different tax if their credits differ.
How payroll withholding and the annual return work together
Employers and pension providers act as withholding agents, estimating your annual income and withholding IRPEF monthly using the 2025 bands and the credits they can recognize in payroll (work/pension credits, dependent family if declared, etc.). If your situation changes during the year—bonuses, months without pay, new dependents, or switching jobs—the withholding may overshoot or undershoot your true liability. The difference is reconciled in your tax return.
If you want a step-by-step filing overview (forms, who can use the prefilled return, key dates), read What Is the 730 Tax Form in Italy and Who Can Use It? and then come back here to map how your bands flowed into your final balance.
Regional and municipal add-ons: how they sit on top of the bands
On top of national IRPEF, residents also pay:
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Regional add-on (addizionale regionale IRPEF)
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Municipal add-on (addizionale comunale IRPEF)
Both are calculated on the same taxable income used for national IRPEF (after deductibles, before credits). Rates are set locally, so they vary by region and municipality. Some authorities adopt a single rate, others use tiered rates aligned to national bands. Municipalities can also set exemption thresholds (below which no municipal add-on is due). Because these are local decisions, you’ll need to check the current rates where you’re resident for the tax year.
Withholding mechanics. Employers typically withhold the regional add-on during the year and the municipal add-on in instalments (an advance and a balance) according to the current rules. When you file the annual return, both add-ons are recalculated and any difference is settled.
Common situations that change the tax you actually pay
Partial-year income. If you work part of the year, payroll may have over-withheld assuming twelve months of income. The annual return usually corrects the over-estimate via a refund. The reverse can happen if large bonuses arrive late in the year.
Multiple sources. Two part-time jobs, or a salary plus a pension, are often withheld separately by each payer as if they were your only income. The return adds them together and may produce a balance due because progressive bands apply to the combined taxable income.
Fringe benefits and bonuses. Certain benefits are taxable and increase your taxable base; some have thresholds or special rules. If your total crosses €50,000, remember that only the slice above enters the 43% band—the earlier slices remain taxed at 23% and 35%.
Deductions vs credits. A deduction lowers your taxable income (affecting which slices fall into which band), while a credit directly reduces the tax computed on those bands. Large deductible items (e.g., specific pension contributions) can pull income down a band; large credits can zero out residual tax.
Pensioners vs employees. Both use the same bands, but the payroll credits differ: pensioners get pension-income credits, employees get work-income credits. At low incomes these credits can reduce IRPEF to zero.
A practical checklist for accurate banding
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Confirm your taxable base. Check your annual CU (Certificazione Unica) and any freelance income statements; make sure deductible items are correctly included.
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Verify local add-ons. Look up your Region and Municipality rates for the relevant tax year, and note any exemptions.
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Simulate mid-year. If your income changes (raise, bonus, switch to part-time), ask payroll for an updated simulation so withholdings track the new annual projection.
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Track credits. Keep receipts for eligible expenses and ensure dependents are properly declared; credits apply after the bands.
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Align with your return. When you prepare the 730, reconcile national IRPEF and local add-ons with what was withheld; expect either a refund or a balance due based on your full-year picture.
Understanding how the three national bands interact with deductions, credits, and local add-ons is the key to predicting what you’ll actually pay—and to avoiding surprises when your annual return reconciles everything.
