Italy TFR Calculator: Trattamento di Fine Rapporto Accrued Per Year
Work out the Italian TFR (trattamento di fine rapporto) accrued in one year — the severance/leaving entitlement Italian employers set aside for each employee — calculated as your annual gross salary divided by 13.5.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | TFR accrued in the year |
|---|---|
| €27,000 salary (€2,000/yr) | $2,000.00 |
| €35,000 salary | $2,592.59 |
| €20,000 salary | $1,481.48 |
| €50,000 salary | $3,703.70 |
How This Calculator Works
Enter your annual gross salary and the legal divisor (13.5). The calculator returns the gross TFR set aside for that year. Over your employment these yearly quotas accumulate (and are revalued annually) to form the lump sum paid when the job ends. The TFR is deferred pay accrued throughout employment, not an extra cost added at the end.
The Formula
Cost per Unit
Total Amount is the full cost or price, Quantity is the number of units it covers
Worked Example
On a €27,000 gross annual salary, the TFR accrued in the year is €2,000 (27,000 ÷ 13.5). The TFR (often called liquidazione) is a lump sum every Italian employee receives when their employment ends — for any reason, including resignation. Each year roughly one-thirteenth-and-a-half of gross pay is set aside; the accumulated balance is revalued annually (a fixed 1.5% plus 75% of inflation) and paid out, with favourable separate taxation, when you leave.
Key Insight
The TFR is one of the most distinctive features of Italian employment, and a few points clarify how it builds up. The annual quota is gross salary ÷ 13.5 (about 7.41% of pay); from this a small 0.50% INPS contribution is deducted, so the net annual accrual is marginally lower than the simple division shown here. The accumulated TFR is revalued each year by a fixed 1.5% plus 75% of the ISTAT inflation rate, so it broadly keeps pace with prices. Crucially, the TFR is owed regardless of why the job ends — resignation, dismissal, or retirement all trigger payment — making it deferred salary rather than a severance penalty. Where the money sits depends on a choice: employees can leave the TFR with the employer (in firms with 50+ employees it is transferred to an INPS treasury fund) or direct it into a supplementary pension fund (previdenza complementare), which can offer higher long-run growth and tax advantages but locks the money for retirement. When paid out, the TFR is subject to tassazione separata — a separate, generally favourable tax regime based on your average rate over prior years — rather than being added to that year's income. This calculator shows the gross yearly set-aside; your actual leaving lump sum is the sum of these quotas across all years of service, net of the INPS contribution, plus annual revaluations, and before separate taxation. Verify the divisor and the contribution if you need a precise figure, and remember a destinazione choice (employer vs pension fund) changes how the balance grows.
Lordo vs Netto: how separate taxation works
The figure above is the gross (lordo) TFR set aside for the year. When the TFR is paid out at the end of employment, it does not get added to the regular income of that year. Italian law applies tassazione separata — separate taxation at an average rate computed on the average income of the preceding five years. This is generally favourable, because it prevents the lump sum from pushing you into the top marginal bracket in the year you receive it.
Practically, the effective tax rate on a paid-out TFR is usually between roughly 23% and 35% — close to the lower IRPEF brackets — and the bank or employer withholds it at source. The Agenzia delle Entrate may then issue a small adjustment when it reconciles the calculation with your historical income tax records.
A common exception: if you direct the TFR into a previdenza complementare (supplementary pension fund), the tax treatment on the eventual payout is even better — typically 15%, reduced by 0.30% for every year of contribution beyond the 15th, down to a floor of 9%.
Annual revaluation (rivalutazione)
The TFR balance left with the employer is revalued every year by a fixed component of 1.5% plus 75% of the annual change in the ISTAT consumer price index (FOI ex-tobacco). At 2% inflation the revaluation rate is therefore 1.5% + 0.75 × 2% = 3%; at 4% inflation it becomes 1.5% + 0.75 × 4% = 4.5%.
The revaluation is itself taxed at a separate 17% substitute tax (imposta sostitutiva) — a higher rate than it used to be, but still applied only to the revaluation component, not to the new yearly quota itself. The revaluation is computed on the balance at 31 December of the previous year, not on contributions made during the current year.
Over a long career the cumulative revaluation matters: on a €30,000 salary held flat for 30 years, the revaluation portion of the final TFR is roughly €39,000 — a meaningful share on top of the €66,667 of contributions, as shown in the multi-year accrual table below.
Where the TFR goes: with the employer or into a pension fund
Every employee makes a one-time choice on what to do with their TFR. Leaving it 'in azienda' (with the employer) means the company holds and revalues the fund at the statutory 1.5% + 75% inflation rate; for firms with 50+ employees the TFR is instead transferred to the INPS Fondo di Tesoreria, with the same revaluation formula.
Conferring the TFR to a fondo pensione complementare (supplementary pension fund, fondo negoziale, fondo aperto, or PIP) shifts the money into a real investment fund. The return then depends on the comparto chosen (garantito, obbligazionario, bilanciato, azionario) and on the fund's costs — over long horizons equity-heavy compartments have historically outperformed the statutory revaluation, but they carry market risk.
If the employer has a matching contribution provision in the contratto collettivo, conferring the TFR to a fondo pensione can also unlock that match — effectively free money the employee loses by leaving the TFR in azienda. The decision is irrevocable by default, but the destination can be moved between qualifying funds.
TFR accrual over a career (€30,000 salary, 2% inflation)
The yearly quota is €2,222 (30,000 ÷ 13.5). Each year the balance carried forward is revalued by 1.5% + 75% × inflation — here a 3% revaluation rate — and then the new quota is added. Over a 30-year career the revaluation alone adds €39,000 on top of contributions.
| Year of service | Balance (lordo) | Total contributed | Cumulative revaluation |
|---|---|---|---|
| 1 | €2,222 | €2,222 | €0 |
| 5 | €11,798 | €11,111 | €687 |
| 10 | €25,475 | €22,222 | €3,253 |
| 15 | €41,331 | €33,333 | €7,998 |
| 20 | €59,712 | €44,444 | €15,267 |
| 25 | €81,021 | €55,556 | €25,465 |
| 30 | €105,723 | €66,667 | €39,056 |
Figures are gross (lordo) before tassazione separata and ignore the 17% substitute tax on the revaluation portion, the 0.50% INPS fund contribution deducted from each year's quota, and any salary growth.
TFR with the employer vs in a supplementary pension fund
The destinazione choice is one of the most consequential personal-finance decisions for an Italian employee. The headline differences:
| Aspect | Leave with employer | Convey to fondo pensione |
|---|---|---|
| Annual revaluation | 1.5% + 75% × ISTAT inflation, fixed by law | Market return on the chosen investment line (variable) |
| Tax on revaluation | 17% substitute tax on the revaluation portion | 20% on financial returns, but on net-of-rebates basis |
| Tax on lump-sum payout | Separate taxation, average rate ~23–35% | 15%, reduced by 0.30% per year over 15 yrs (floor 9%) |
| Employer matching | None | Often available if covered by CCNL — effectively free money |
| Liquidity | Paid at end of employment; limited advances allowed | Locked until retirement, with hardship exceptions (home, illness, unemployment) |
| Investment risk | None — guaranteed by employer / INPS | Yes — depends on comparto chosen (garantito to azionario) |
Frequently Asked Questions
How is the annual TFR calculated?
Divide your annual gross salary by 13.5. On €27,000 that is €2,000 set aside for the year. A small 0.50% INPS contribution is then deducted, so the net accrual is slightly lower, and the accumulated balance is revalued each year.
What is the TFR?
The trattamento di fine rapporto — a lump sum every Italian employee receives when their employment ends, for any reason including resignation. It is deferred pay accrued throughout the job (about one-thirteenth-and-a-half of gross salary each year), revalued annually, not an extra payment the employer adds at the end.
Why divide by 13.5?
Because Italian law sets 13.5 as the divisor for the yearly TFR quota — annual gross salary ÷ 13.5 gives the gross amount accrued in the year (roughly 7.41% of pay). It is a fixed legal figure, not derived from the number of monthly payments.
Is the TFR revalued over time?
Yes. The accumulated TFR is revalued each year by a fixed 1.5% plus 75% of the ISTAT inflation rate, so it broadly keeps pace with prices. This calculator shows the gross quota set aside in a single year, before revaluation of the running balance.
How is the TFR taxed when paid out?
Under tassazione separata — a separate, generally favourable regime based on your average tax rate over prior years — rather than being added to that year's income. If you direct the TFR into a supplementary pension fund instead of leaving it with the employer, different (often more favourable) rules apply.
References & Authoritative Sources
- Codice Civile — Art. 2120 — Disciplina del trattamento di fine rapporto · consulted May 31, 2026 · Statutory definition of TFR, divisor 13.5, revaluation formula
- INPS — Trattamento di Fine Rapporto (TFR) — schede informative · consulted May 31, 2026 · Operational rules and Fondo di Tesoreria for firms with 50+ employees
- COVIP — Guida introduttiva alla previdenza complementare · consulted May 31, 2026 · Authority on pension funds — supplementary pension fund rules, tax treatment, fund types
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Methodology & Review
The yearly TFR quota is the annual gross salary divided by 13.5, the legal divisor set by Italian law. It gives the gross amount set aside in one year and does not apply the small INPS fund contribution (0.50%), the annual revaluation (1.5% plus 75% of inflation), or the separate taxation applied when the TFR is paid out.
Updated