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In short: In 2026, IRPEF in Italy has three brackets: 23% on income up to €28,000, 33% on the part between €28,001 and €50,000, and 43% on the part above €50,000 (as of 2026; if in doubt, check official sources). On top of this come the regional surcharge (roughly between about 0.9% and 3.33%) and the municipal surcharge (up to about 0.8%). Lower incomes may fall within the “no-tax area“. This text is for educational purposes and is not tax advice.

Income tax basics in Italy (IRPEF)

Kontoo editorial team · Updated 06/24/2026 · 5 min read

In Italy the main tax on personal income is called IRPEF (Imposta sul Reddito delle Persone Fisiche — personal income tax). It is a “progressive“ tax: the higher your income, the higher the rate applied to the portion of income above each threshold. Understanding how the tax is built up — national brackets, local surcharges and deductions — helps you read your payslip and plan your household budget. This chapter explains the basics with figures current for 2026.

Work out your taxable income: from gross income, subtract social-security contributions (INPS) and deductible expenses.
Apply the national IRPEF brackets: each income band has its own rate, charged only on the part of income that falls within that band.
Add the regional and municipal surcharges, which vary depending on where you live.
Subtract deductions and tax credits (for employment, dependent family members, medical costs and so on) to reach the net tax actually due.

What matters

IRPEF is the core of income taxation in Italy and is administered by the Agenzia delle Entrate (the Revenue Agency). The principle is bracket-based progressivity: taxable income is split into bands and each band is charged its own rate. It is important to understand that the highest rate does not apply to all of your income, only to the part that exceeds the bracket threshold. For 2026 there are three brackets: 23% up to €28,000, 33% from €28,001 to €50,000, and 43% above €50,000. The main change introduced by the 2026 Budget Law is the reduction of the second rate from 35% to 33%, worth at most a few hundred euros a year for middle incomes.

On top of national IRPEF come local surcharges: the regional surcharge (roughly between about 0.9% and 3.33% depending on the region) and the municipal surcharge (up to about 0.8%). On the consumption side, VAT (IVA) applies, with a standard rate of 22% and reduced rates of 10%, 5% and 4% for specific goods and services such as basic foodstuffs, books or certain utilities. All the figures given here are current for 2026 (“as of 2026“): since they can change every year with the Budget Law, when in doubt it is always best to verify on the Agenzia delle Entrate website. This chapter is purely educational and does not replace advice from a professional.

The three 2026 IRPEF brackets: 23% up to €28,000, 33% up to €50,000 and 43% above — each rate applies only to the income within its bracket.

ExampleSimplified example (as of 2026) for a taxable income of €35,000. First bracket: €28,000 × 23% = €6,440. Second bracket: (€35,000 − €28,000) = €7,000 × 33% = €2,310. Gross IRPEF ≈ €8,750, before deductions and before the regional and municipal surcharges. With employment deductions the net tax will be noticeably lower.

To estimate how much you could set aside over time after tax, try Kontoo’s compound interest calculator. For official, up-to-date figures always check the Agenzia delle Entrate (Italian Revenue Agency).

In depth

Deductions and the no-tax area

Deductions reduce the tax due directly. For the lowest incomes they effectively create a “no-tax area“ (roughly around €8,500 a year for employees and pensioners, as of 2026). There are also deductions for dependent family members, medical costs, renovations and more: they often make the net tax much lower than the gross.

Local surcharges and residence

Regions and municipalities apply their own surcharges on IRPEF. The 2026 Budget Law extended a transitional regime that lets local authorities keep their own rate structure for now. As a result, your overall tax burden also depends on where you live.

Important note

The figures given here (rates, thresholds, deadlines) are current for 2026 and can change every year with the Budget Law. This chapter is for information only and is not tax, legal or financial advice: for your personal situation consult an accountant (commercialista) or the Agenzia delle Entrate.

Checklist

IRPEF is progressive: the higher rate hits only the part of income above each threshold, not all of your income.
In 2026 there are three brackets: 23%, 33% and 43%.
Beyond the national tax you also pay regional and municipal surcharges, which vary by place of residence.
VAT (IVA) is separate from IRPEF: it taxes consumption, with a standard rate of 22%.

Common myths

Myth: “If I reach the 43% bracket I pay 43% on all of my income.“

Reality: False. The system is bracketed: 43% applies only to the part of income above €50,000. The lower bands stay taxed at the lower rates.

Myth: “Earning one euro more and crossing into a higher bracket leaves me worse off.“

Reality: No. Because the higher rate only touches the excess, a higher gross income always means a higher net; you cannot “earn less by earning more“ simply by changing bracket.

Sources

Education, not advice. How we work and check figures: Editorial. Figures as of 2026, last reviewed 06/24/2026.

Frequently asked questions

What is the difference between IRPEF and VAT?

IRPEF is the tax on your personal income (salary, pension, self-employment income and so on). VAT (IVA) is instead a tax on consumption, included in the price of goods and services: the standard rate is 22%, with reduced rates of 10%, 5% and 4% for specific categories.

What is the “no-tax area“?

It is the lowest income band on which, thanks to deductions, you effectively pay no IRPEF. For employees and pensioners it is roughly around €8,500 a year (as of 2026). Social-security contributions are still due regardless.

Why do two people with the same salary pay different amounts?

Because the regional and municipal surcharges depend on where you live, and deductions (dependants, medical expenses, employment) vary from person to person. The final net tax can therefore differ even on the same gross income.

Do I always have to file a return?

Many employees use the 730 form, often in a pre-filled version. IRPEF is already withheld each month on the payslip based on an annual estimate, and the return reconciles it (refund or balance due). Deadlines change every year, so check the Agenzia delle Entrate.

All lessons · Glossary · Editorial · Kontoo does the math and explains – this is general education, not tax, legal or financial advice.

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