Italian TFR Severance Pay Calculator 2025
🏠 Free ToolTFR simulator: calculate Italian severance pay from gross salary, years of service and ISTAT inflation rate. View annual accrual, revaluation, separate taxation and net TFR.
How it Works
TFR (Trattamento di Fine Rapporto) is Italy’s mandatory severance pay entitlement for all employees. It functions as forced savings: each year the employer sets aside a portion equal to the gross annual salary divided by 13.5, which accrues with annual revaluation.
Our simulator calculates the gross TFR accrued taking into account the annual revaluation of 1.5% fixed plus 75% of ISTAT inflation. Enter your gross annual salary, years of service and expected inflation rate to get a realistic estimate of your gross and net TFR, with details on separate taxation and the 17% tax on revaluation.
The choice between keeping TFR with the employer or directing it to a supplementary pension fund has significant tax and financial implications. Pension funds may offer higher returns and more favourable final taxation, but come with liquidity constraints. Consult a financial adviser for the option best suited to your situation.
Frequently Asked Questions
How is TFR calculated?
TFR is calculated by dividing the gross annual salary by 13.5. The accrued amount is revalued each year by a fixed 1.5% plus 75% of the ISTAT consumer price index.
How is TFR taxed?
TFR is subject to separate taxation. The rate is determined by calculating a reference income (TFR divided by years of service times 12) and applying average IRPEF rates. The revaluation component is taxed at 17%.
Is it better to keep TFR with the employer or in a pension fund?
Pension funds generally offer greater tax advantages: deductible contributions, preferential tax on returns (20% vs 26%), and a final tax rate between 9% and 15% instead of IRPEF separate taxation.