How much do Italians keep in their pockets for every 100 euros earned?

Understanding Taxation in Italy

Have you ever wondered how much of an Italian’s earnings go towards taxes and how much actually stays in their pockets? It’s a question that many people ponder to determine whether they are truly working for themselves or if a significant portion of their salary ends up in the government’s coffers.

Undoubtedly, the tax burden in Italy is very high, reaching 47.5% in 2023.
This means that, on average, Italians leave almost half of what they earn to the tax authorities.
The purchasing power of the average Italian has significantly decreased over the years, mainly due to the rising taxes and levies that every citizen is required to pay.

Not Just Income Tax

The maximum personal income tax (IRPEF) rate applied to income brackets is 43%, but it only concerns those earning more than €50,000.
Those earning below €28,000 pay a 23% IRPEF, while those surpassing this amount but staying below €50,000 pay 35% on the excess over the first bracket.
How does this lead to an overall tax burden of 47.5%?

Italians not only pay income taxes, but they are also subject to a myriad of other levies.
Property tax (IMU), waste tax (TARI), TV license fee (canone Rai), car stamp duty (bollo auto), fee for occupying public land (TOSAP), just to name a few, add up to the IRPEF.
Additionally, let’s not forget about Value Added Tax (VAT), which everyone has to pay when purchasing goods or services, ranging from 4% to 22%.

Calculating Tax Liberation Day

For over 20 years, the Mestre branch of the CGIA has calculated the Tax Freedom Day, the day when Italians stop pouring their salary into taxes and start working to satisfy their needs.
This day is purely symbolic but conveys a strong message.

This year, Tax Freedom Day falls on June 3rd (compared to June 8th in 2023), marking the first day Italians work for themselves.
On average, Italians have to work 154 days to pay all their taxes throughout the year.

Calculating how much of our earnings go to the government reveals that out of every 100 euros earned, Italians keep €57.90 while €42.10 go to taxes.
To calculate the net amount that remains in our pockets after taxes, one can divide the gross salary by 366 (2024 being a leap year), multiply the result by 154 (the days worked to pay taxes).
The difference between the gross salary and the tax amount represents what stays in our pockets.
If calculated annually, one should use the gross annual salary and the same formula, considering that 154 is the valid number for 2024.