Pension fund deductibility 2024, how much do you save on Irpef?

The pension fund is one of the most advantageous tools for saving on the Irpef to be paid thanks to its deductibility.
The Italian legislator favors the stipulation of contracts for membership of pension funds, the objective is to ensure that workers can receive amounts at the end of their working career that allow them to maintain a good standard of living through a supplementary pension.
In fact, with the entry into force of the Dini Reform, there was a historic transition from the salary-based pension calculation system to the contributory one.
It follows that over time the amounts of pension benefits will decrease.
To compensate for this loss, the sums paid into pension funds are deducted.
However, the deductibility of the pension fund has limits, let's see how much you can save by choosing to join forms of supplementary pension.
Pension fund deductibility, how much do you save? Discipline and limit to the deductibility of the pension fund Pension fund deductibility for first-time workers How does the deductibility of the pension fund work? How the pension fund deduction is applied Discipline and limit to the deductibility of the pension fund Pension funds are governed by Legislative Decree 252 of 2005, the deductibility of payments made into pension funds is provided for by art.
10 co.
1 letter e-bis) of the TUIR.
This establishes the deductibility of contributions paid to forms of complementary social security, in compliance with article 8 of decree 252/2005 which identifies the deductibility limit at 5,164.57 euros.
Every year it is possible to subtract this sum from the overall income, reducing the tax base.
If amounts exceeding the limit are paid during the year, the excess sums cannot be deducted.
If the taxpayer has multiple open pension funds, for example one for himself and one for a tax-dependent child or both for himself, the limit remains unchanged and the sums paid into each fund are added.
The taxpayer, having reached the receipt of the public pension, can decide not to start collecting the supplementary pension, but to continue making payments to the pension fund, for example to enjoy it at an older age or to ensure that the amounts of the supplementary pension increases, in this case it is still possible to take advantage of the deductibility of payments to the pension fund within the limits set.
read also What is the supplementary pension and how does it work? Is it worth it? Pension fund deductibility for first-time workers The limit seen above can be exceeded in a particular case: for first-time workers, paragraph 6 of article 8 of Legislative Decree 252/2005 provides that the limit is increased by 2,582, 29 euros per year for a maximum period of 20 years.
However, there are conditions.
The legislator starts from the assumption that a first-time worker has a not particularly high income, which does not allow him to make significant payments to the pension fund.
It follows that he will not be able to fully exploit the deductions provided for payments to forms of supplementary pension.
To protect him, the legislator allows him to accumulate residues in the first 5 years of work, for example, in year 1 he paid 1,000 euros, so he does not take advantage of the deduction for an amount of 4,164.57 euros, this sum is set aside.
For the first 5 years it is possible to set aside all residues.
From the sixth year onwards of membership of the pension fund, the worker can deduct the annual payments up to an amount of 5,164.57 euros and add the sums set aside in previous years, for a maximum annual amount of 2,582.29 euros.
The sums "virtually set aside" can be deducted for a maximum period of 20 years.
These taxpayers will be able to obtain a maximum pension fund deductibility of 7,746.86 euros each year.
However, always if they pay these sums during the year, i.e.
in the sixth year the worker who pays 7,000 euros will be able to fully deduct this sum.
How does pension fund deductibility work? The first thing to remember is that deductions are applied to overall income and reduce the tax base, with the possibility of also leading to the application of a lower Irpef rate determined by a different income bracket.
A person who has a total income of 30,000 euros could see the application of the second Irpef rate of 35%, but if he makes payments to the pension fund for 4,000 euros during the year, his tax base is reduced to 26,000 euros , consequently the rate of 23% is applied (from 2024 first bracket).
The economic savings linked to the deductibility of the pension fund could be particularly interesting.
In this regard we must remember that for the year 2024 the Irpef rates have changed, reduced from 4 to 3.
The new rates are: 23% on incomes up to 28,000 euros; 35% on incomes between 28,000 and 50,000 euros; 43% on incomes exceeding 50,000 euros.
read also Irpef: what it is, who pays it, how it works and what the rates are How the pension fund deduction is applied We remind you that the deductions apply to the sum of income received.
Only after having done this operation is the rate applied and the "potential" tax to be paid is determined.
Finally, only after having completed this operation can tax deductions be applied, for example the deduction for employed work, deductions for dependent family members, educational costs, mortgage payments.
Finally, it must be remembered that investments in pension funds, in addition to allowing the deductibility of the sums paid, provide for preferential taxation of returns.
Returns accrued from the pension fund are subject to 20% tax, more favorable than the 26% that applies to most forms of financial savings.
On the portion of the return deriving from the possession of government bonds and similar securities, taxation is set at 12.5%.
read also Deductions 730/2024: the complete list of expenses that can be downloaded