IRPEF Tax Brackets 2026: Italian Income Tax Rates Guide

What Is IRPEF?

IRPEF (Imposta sul Reddito delle Persone Fisiche) is Italy's personal income tax. It applies to all residents on their worldwide income and to non-residents on Italian-source income. IRPEF is a progressive tax — the rate increases as your income rises — and it is the single largest deduction you will see on your Italian payslip (busta paga).

IRPEF is regulated by the Testo Unico delle Imposte sui Redditi (TUIR, DPR 917/1986) and is collected through payroll withholding (ritenuta alla fonte) by the employer, who acts as a tax substitute (sostituto d'imposta). The tax is calculated on your taxable income (imponibile fiscale), which is your gross salary minus INPS social security contributions.

The 2026 Tax Brackets

Since 2024, Italy has used three IRPEF brackets (scaglioni). This simplified structure was made permanent from 2025 and continues unchanged into 2026:

Note: until 2023 there were four brackets, with a separate 25% band for income between €15,001 and €28,000. The 2024 reform merged this into the 23% bracket, giving a tax cut to middle earners.

How Progressive Taxation Works

A common misconception is that moving into a higher bracket means all your income is taxed at the higher rate. This is incorrect. Italy's IRPEF is calculated per bracket (a scaglioni progressivi): each rate applies only to the slice of income that falls within that bracket.

For example, if your taxable income is €35,000:

• The first €28,000 is taxed at 23% = €6,440
• The remaining €7,000 (€35,000 − €28,000) is taxed at 35% = €2,450
• Total gross IRPEF = €6,440 + €2,450 = €8,890

Your marginal rate is 35% (the bracket your last euro falls into), but your effective rate is €8,890 / €35,000 = 25.4% — significantly lower than the marginal rate.

Effective vs Marginal Rate

Understanding the distinction between these two rates is essential for financial planning in Italy:

• Marginal rate (aliquota marginale): the rate applied to your next euro of income. This tells you how much tax you will pay on a raise, a bonus, or overtime. If you earn €40,000, your marginal rate is 35%.
• Effective rate (aliquota effettiva): the total IRPEF divided by total taxable income. This represents your actual average tax burden. At €40,000 the effective rate is about 26.2%, because the first €28,000 was taxed at only 23%.

The effective rate is further reduced by deductions (detrazioni), meaning the real-world bite is lower still. You can model both rates with our IRPEF calculator.

Employment Income Deductions

After calculating gross IRPEF, employees benefit from the detrazione per lavoro dipendente (employment income deduction). This is a tax credit that directly reduces the amount of IRPEF owed. The deduction is inversely proportional to income: the lower your income, the larger the deduction.

For 2026, the key thresholds are:

• Income up to €15,000: deduction of €1,955 (with a minimum floor of €690 for permanent contracts, €1,380 for fixed-term)
• Income €15,001 to €28,000: €1,910 + €1,190 × (28,000 − income) / 13,000
• Income €28,001 to €50,000: €1,910 × (50,000 − income) / 22,000
• Income above €50,000: no deduction

Calculation Examples

Here are quick IRPEF examples at several income levels (before deductions):

For a detailed, personalised calculation including deductions and surcharges, use our IRPEF calculator.

Surcharges on Top of IRPEF

The IRPEF brackets described above represent only the national component of Italian income tax. On top of IRPEF, every taxpayer must also pay two local surcharges: the addizionale regionale (regional surcharge) and the addizionale comunale (municipal surcharge). These are calculated on the same taxable income (imponibile IRPEF) but are separate levies set by your region and municipality of residence.

The regional surcharge ranges from 0.7% to 3.33% depending on the region. Some regions, such as Lombardia, apply relatively low flat rates (around 1.23%), while others, notably Lazio and Campania, impose progressive rates that can reach the legal maximum of 3.33% for higher incomes. The municipal surcharge ranges from 0% to 0.9%, set independently by each of Italy's approximately 7,900 municipalities. Major cities such as Rome (0.9%) and Milan (0.8%) apply rates near the maximum (source: Ministero dell'Economia e delle Finanze).

In practice, these surcharges can add between 1.5% and 4% to your effective tax rate. For example, consider Giulia, a teacher in Rome earning a taxable income of €30,000. Her national IRPEF is €7,140 (effective rate 23.8%). On top of this, she pays approximately €690 in regional surcharge (Lazio progressive rate ~2.3%) and €270 in municipal surcharge (Rome at 0.9%), bringing her total income tax burden to approximately €8,100 — an effective rate of 27.0%. To understand exactly how surcharges affect your pay, see our detailed guide to regional and municipal surcharges.

IRPEF for Non-Residents

Italian tax law distinguishes between residents and non-residents for IRPEF purposes (Art. 2 and Art. 3 of the TUIR, DPR 917/1986 — see normattiva.it). A person is considered tax resident in Italy if, for the greater part of the tax year (more than 183 days), they are registered in the anagrafe (civil registry), have their domicile (domicilio) in Italy, or have their habitual residence (residenza) in Italy.

Non-residents are taxed only on Italian-source income (redditi prodotti in Italia). For employment income, this means wages earned for work performed on Italian territory. The same IRPEF brackets (23%, 35%, 43%) apply to non-residents, but there are important restrictions:

• No employment income deduction: non-residents are generally not entitled to the detrazione per lavoro dipendente (Art. 13 TUIR), unless they are residents of an EU/EEA country and earn at least 75% of their worldwide income in Italy.
• No family deductions: deductions for dependent family members (detrazioni per carichi di famiglia) are not available to non-residents under the same conditions.
• No cuneo fiscale benefit: the tax wedge benefit applies only to employment income of resident dependent employees.
• Regional and municipal surcharges: non-residents who earn income in Italy must still pay the addizionale regionale (typically at the rate of the region where the income is produced) and may be subject to the municipal surcharge as well.

For example, Thomas, a German consultant who works three months per year at a client office in Milan but remains a tax resident of Germany, would pay IRPEF on his Italian-source employment income at the standard progressive rates, but without the benefit of the employment income deduction. On €20,000 of Italian income, Thomas would owe €4,600 in gross IRPEF with no deduction to offset it, compared to an Italian resident who might owe as little as €2,645 after the detrazione per lavoro dipendente. Double taxation relief may be available under the Italy-Germany tax treaty (source: Agenzia delle Entrate — Convenzioni contro le doppie imposizioni).

How to Optimise Your IRPEF

While IRPEF rates are fixed by law, there are several legitimate strategies to reduce your taxable income or the tax owed. Italian tax law provides a range of deductions (deduzioni, which reduce the tax base) and credits (detrazioni, which reduce the tax owed) that can significantly lower your effective IRPEF burden.

Deductions that reduce your taxable income (deduzioni)

• Supplementary pension fund contributions (fondi pensione complementari): contributions to an approved pension fund are deductible up to €5,164.57 per year (Art. 10, comma 1, lett. e-bis TUIR). For example, if Roberto earns €40,000 and contributes €3,000 to a pension fund, his taxable income drops to €37,000, saving him €1,050 in IRPEF (at his marginal rate of 35%). This is one of the most powerful deductions available to employees (source: Agenzia delle Entrate).
• Mandatory social security contributions (INPS): the employee's share of INPS contributions (9.19%) is automatically deducted from gross salary before IRPEF is calculated. This is already applied by your employer, so no action is needed on your part.
• Alimony payments: periodic alimony payments to a former spouse are deductible from taxable income (not lump-sum settlements).

Tax credits that reduce your IRPEF bill (detrazioni)

• Medical expenses: you can claim a 19% tax credit on medical and healthcare expenses exceeding a €129.11 annual threshold. This includes doctor visits, specialist consultations, prescription medications, dental work, and physiotherapy. The expenses must be documented and, since 2020, paid via traceable methods (card, bank transfer) except for medications and medical devices (Art. 15, comma 1, lett. c TUIR).
• Mortgage interest on primary residence: a 19% tax credit applies to mortgage interest payments up to a maximum of €4,000 per year on loans taken to purchase your primary residence (prima casa). On the full €4,000, this yields a credit of €760 per year.
• Education expenses: university tuition fees (both public and private, up to a cap set annually by the Ministry of Education), nursery school fees (up to €632 per child), and certain school-related expenses qualify for a 19% tax credit.
• Home renovation and energy efficiency: the Superbonus, ecobonus, and bonus ristrutturazione provide tax credits of 36% to 65% on qualifying renovation and energy-efficiency works. These credits are spread over 10 annual instalments and can substantially reduce IRPEF owed each year.
• Donations: donations to recognised non-profit organisations (ONLUS, APS, ODV) qualify for either a 30% tax credit (up to €30,000) or a full deduction from taxable income, depending on the type of entity.

A practical example: Anna, a project manager in Bologna, earns a taxable income of €45,000. Her gross IRPEF before deductions is €12,390. She contributes €4,000 to a supplementary pension fund (reducing her taxable income to €41,000 and her gross IRPEF to €10,990), has €2,500 in medical expenses (yielding a 19% credit on €2,371 after the threshold = €450), and pays €3,200 in mortgage interest (19% credit = €608). After the employment income deduction and these credits, her net IRPEF drops to approximately €8,200 — an effective rate of just 18.2% on her original €45,000, compared to a headline marginal rate of 35%. This demonstrates how proactive tax planning can meaningfully reduce the IRPEF burden within the bounds of the law (source: Agenzia delle Entrate — Detrazioni e deduzioni).

Frequently Asked Questions