How Italian income tax works in 2026
Italy taxes personal income with IRPEF (Imposta sul Reddito delle Persone Fisiche), a progressive national tax. A 2024 reform collapsed the old four brackets into three, and the 2026 Budget Law (Legge di Bilancio 2026) went further, cutting the middle bracket from 35% to 33% — a change affecting around 12.5 million taxpayers. The 2026 scale is therefore: 23% to €28,000, 33% from €28,001 to €50,000, and 43% above €50,000.
IRPEF is only the national layer. On top of it, your region levies an addizionale regionale (roughly 0.9%–3.33%) and your municipality an addizionale comunale (0%–0.9%), both depending on where you were resident on 31 December. These surtaxes are why two Italians with identical salaries can pay different total tax.
The move to three brackets was a deliberate simplification. Before 2024, Italy used four rates — 23%, 25%, 35% and 43% — with the first jump landing at just €15,000, which pushed even modest earners into the second bracket quickly. The reform merged the old second and third brackets and stretched the 23% band to €28,000, cutting tax for most middle earners. The 2026 cut from 35% to 33% continues that direction: for someone on €50,000, gross IRPEF is now €13,700 (6,440 + 7,260) versus €14,140 under the 2025 rules — a €440 annual saving that the government estimates reaches about 12.5 million taxpayers.
For employees, IRPEF is withheld monthly by the employer (sostituto d'imposta) through the payslip, with a year-end reconciliation (conguaglio) adjusting for the exact annual figure; most employees then file nothing further unless they have other income. The self-employed instead pay through the Modello Redditi return with advance payments (acconti) during the year.
Methodology
+ 33% × min(max(income − €28,000, 0), €22,000)
+ 43% × max(income − €50,000, 0)
Surtax (optional, approximate) = income × surtax %
The calculator shows gross IRPEF before detrazioni (tax credits for employment income, dependents, and expenses), which reduce the bill and depend on personal circumstances — so treat the result as the pre-credit figure. The optional surtax field applies your combined regional+municipal rate flat to income as an approximation; real surtax scales are progressive, so consider it a close estimate rather than exact. For incomes above €200,000, note that 2026 caps certain deductions (a €440/year reduction), which is not modelled here.
Worked example
€60,000 taxable income, 2026, no surtax:
- €28,000 × 23% = €6,440
- €22,000 × 33% = €7,260
- €10,000 × 43% = €4,300
- Total IRPEF = €18,000 — effective rate 30.0%
Under the 2025 rules (35% middle bracket), the same income would have cost €18,440 — the 2026 reform saves this taxpayer €440 before surtaxes.
Frequently asked questions
What changed in Italy's 2026 budget for IRPEF?
The middle bracket was cut from 35% to 33% (Legge di Bilancio 2026, effective 1 January 2026). The 23% and 43% brackets are unchanged. Separately, the capital-gains flat tax rose from 26% to 33%.
What are the addizionali regionale and comunale?
Surtaxes levied by your region (about 0.9%–3.33%) and municipality (0%–0.9%) on top of IRPEF, based on your residence at year-end. Enter their combined rate in the calculator for an approximate total.
Does this include INPS social-security contributions?
No. Employee INPS contributions (roughly 9–10% up to caps) are separate from IRPEF and are not included here.
Are employment tax credits (detrazioni) included?
No — detrazioni depend on your income level, contract type and family situation, so the calculator shows IRPEF before credits. Your actual bill will usually be lower.
What if I earn over €200,000?
From 2026, deductions are reduced by €440/year above €200,000, and detrazione caps (€14,000 for €75k–€100k; €8,000 above €100k) continue to apply. These refinements are not modelled in this calculator.
Is the 3-bracket system permanent?
The 3-bracket structure dates from the 2024 reform and remains in force for 2026, with the middle rate now 33%. Future budget laws could adjust it again — check the "last reviewed" date above.
Figures verified for tax year 2026 (Legge di Bilancio 2026) · Last reviewed September 2026 · Sources: farrelly-caizzone.com (2026 budget analysis); morrirossetti.it tax alert — Legge di Bilancio 2026