40k Salary After Tax - Payroll Example for Italy in 2021/22

This Italy salary after tax example is based on a €40,000.00 annual salary for the 2021 tax year in Italy using the income tax rates published in the Italy tax tables. The 40k salary example provides a breakdown of the amounts earned and illustrates the typical amounts deducted via payroll each month, week, day and hour. This is particularly useful if you need to set aside part of your income in Italy for overseas tax payments or use international payroll services etc.

The table below provides an overview of your payroll deductions that you will typically see on a 40k salary in Italy. We have used Toscana as an example region to calculate the regional income tax rate. You can review the exact payroll calculations used on below the salary example, each of the payroll deductions is calculated using income tax rates in Italy for 2021 and uses the payroll formula from the Italy Income Tax Calculator

Italy €40,000.00 Income Tax Calculations for 2021
YearlyMonthly4 Weekly2 WeeklyWeeklyDailyHourly%1
Social Security Contributions4,000.00333.33307.69153.8576.9215.812.2010.00%
Taxable Income36,000.003,000.002,769.231,384.62692.31142.2919.7890.00%
National Income Tax Due9,999.99833.33769.23384.62192.3139.535.4925.00%
Regional Income Tax Due533.3044.4441.0220.5110.
Municipal Income Tax Due216.0018.0016.628.314.150.850.120.54%
Total Income Tax Due10,749.29895.77826.87413.43206.7242.495.9126.87%
Total Deductions14,749.291,229.111,134.56567.28283.6458.308.1036.87%
Salary After Tax25,250.712,104.231,942.36971.18485.5999.8113.8763.13%
Employer Social Security Contributions12,000.001,000.00923.08461.54230.7747.436.5930.00%
Cost of Employee52,000.004,333.334,000.002,000.001,000.00205.5328.57130.00%

How to calculate income tax in Italy on €40,000.00

Income tax in Italy is calculated using income tax rates and thresholds, these are different for resident taxpayers and non-resident taxpayers. In this Salary Example we use the resident tax tables to produce the Italy salary example, you can calculate non-resident salary examples on the Italy Tax Calculator.

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Italy Taxable Income Calculation

In order to calculate the amount of income tax due on €40,000.00, we first need to calculate the taxable income on €40,000.00. We do this be calculating specific expenses and allowances, these tax deductible items are then subtracted from the total income (€40,000.00) to produce the taxable income.

Italy: Taxable Income Calculation 2021
€40,000.00 Annual Income in 2021
+€4,000.00 Italy Employees Social Security Contributions on €40,000.00 in 2021

=€36,000.00 Your Taxable Income in 2021

Italy Resident Income Tax Calculation

The table below illustrates how a taxable income of €36,000.00 is applied against the 2021 Income Tax Rates and Thresholds to produce the total income tax due.

Italy: Total Income Calculation 2021
€9,999.99 Italy National Income Tax due in 2021
+€533.30 Italy Regional Income Tax due in 2021
+€216.00 Italy Municipal Income Tax due in 2021

=€10,749.29 Total Income Tax due in Italy in 2021

Income tax in Italy is calculated by combining the income tax due at the national level (based on progressive tax tables), the regional income tax rate (between 1.23% & 3.33%. in 2021) and municipal tax rate (between 0% & 0.8%. in 2021). Regional and Municipal tax rates vary depending on your location in Italy. Please see the individual income tax calculations below for details on how we calculated the income tax for each part of the total income tax due in Italy. Note that in order to produce this salary example we used a regional tax rate of 1.33% and a municipal tax rate of 0.6%. You can select your location and choose specific regional and municipal tax rates with the Italy Income Tax Calculator.

Italy: Resident National Income Tax Calculation 2021
€ - €15,000.0023%€3,450.00
+€15,000.01 - €28,000.0027%€3,510.00
+€28,000.01 - €36,000.0038%€3,040.00

=Total Income Tax Due€9,999.99
Italy: Toscana Regional Income Tax Calculation 2021
+€ - €15,000.001.42%€213.00
+€15,000.01 - €28,000.001.43%€185.90
+€28,000.01 - €36,000.001.68%€134.40

=Total Regional Income Tax Due€533.30
Italy: Municipal Income Calculation 2021
€36,000.00 Taxable Income in 2021
x0.6% Italy Municipal Tax Rate in 2021

=€216.00 Municipal Income Tax due in Italy in 2021

Employer Social Security Calculation on €36,000.00 Salary

Italy: Employer Social Security Contributions Calculation 2021
€40,000.00 Salary in 2021
x30% Italy Employers Social Security Contribution Rate in 2021

=€12,000.00 Italy Employers Social Security Contributions on €40,000.00 in 2021

Total Cost of Employee Calculation on €36,000.00 Salary

Italy Cost of Employee Earning €40,000.00 Salary per Annum Calculation
€40,000.00 Annual Salary in 2021
+€12,000.00 Italy Employers Social Security Contributions on €40,000.00 in 2021

=€52,000.00 Total Payroll cost of Employee in 2021

Employee Social Security Calculation on €36,000.00 Salary

Italy: Employee Social Security Contributions Calculation 2021
€40,000.00 Salary in 2021
x10% Italy Employee Social Security Contribution Rate in 2021

=€4,000.00 Italy Employees Social Security Contributions on €40,000.00 in 2021

About this tax calculation

We used the following information from the Italy Tax Calculator to work out your salary after tax on your €40,000.00 Salary in 2021. We made estimates for the amount of expenses incurred for education and medical expenses and also the amount you give to charity. These assumptions are for the salary illustration only, you can edit these and produce your own specific salary example using the Italy Salary After Tax Calculator

Italy Salary Example Considerations
Tax assessment year2021
Annual Salary€40,000.00
Your Age30
Number of Children0
Number of Children eligible for dependents deduction0
Number of working days you work per year253
Number of hours you work per week35
Number of weeks worked per year for weekly calculation52

Note: This salary example is for a resident of Italy, if you are a non-resident, you can produce a salary example using the 2021 Italy Salary Calculator

Italy Income Tax Rates and Salary Calculators

You may also find the following income tax rates for Italy and Italy tax calculators useful: