In Italy, stipendio lordo (gross salary) refers to the total contractual remuneration before any statutory deductions, while stipendio netto (net salary) is the amount actually credited to the employee after the employer withholds IRPEF (Imposta sul Reddito delle Persone Fisiche — personal income tax) and the employee's share of INPS social security contributions (approximately 9.19 percent of gross). The difference between gross and net can be substantial, often 25 to 35 percent depending on income level and personal circumstances.
IRPEF is applied on a progressive basis with rates ranging from 23 percent on income up to EUR 28,000 to 43 percent on income exceeding EUR 50,000 (2025 bands). Employees may also benefit from detrazioni (tax credits) for employment income, dependent family members, and certain expenses, which reduce the effective tax burden. Regional and municipal income surcharges (addizionali) apply on top of the national IRPEF rate.
Employers report the full cost of employment on a separate line, which includes the employer's INPS and INAIL contributions on top of gross salary. This total employer cost (costo del lavoro) is typically 35 to 45 percent higher than the gross salary figure shown on the busta paga (payslip).