Italy Severance Pay (TFR) Calculator
Worked example (the default inputs above): €35,000 gross, 5 years of service, 2% inflation → yearly accrual €2,418 (gross ÷ 13.5 less 0.50% INPS) → five years of accruals revalued at 3.00% a year (1.5% + 75% of 2% inflation) → about €12,835 total. Without revaluation the same five years would be €12,088 — the revaluation adds about €747.
Key fact: TFR (trattamento di fine rapporto) is Italy’s mandatory severance pay, set by article 2120 of the Italian Civil Code. Every year your employer sets aside your annual pay divided by 13.5 (about 7.41%), less a 0.50% INPS contribution — in practice about 6.91% of your gross pay — and the accrued amount is revalued every year at 1.5% plus 75% of ISTAT inflation.
What this calculator does
This calculator estimates the severance pay (TFR) you have built up as an employee in Italy. It applies the statutory formula — annual gross pay divided by 13.5, less the 0.50% INPS contribution — for each year of service, then revalues the running balance each year at 1.5% plus 75% of the inflation rate you enter, and deducts any advance (anticipazione) you have already taken.
→ Free Italy gross to net salary calculator — see what your Italian pay is really worth
How to use it
- Enter your annual gross salary in euros (include the 13th and 14th month if your contract pays them).
- Enter your years of service — months of at least 15 days count as full months.
- Enter the expected inflation rate — 2% is a reasonable default for a forward estimate.
- If you already took a TFR advance, enter it — the result shows what is left.
→ Free France severance pay calculator — the French equivalent
The formula
Yearly accrual = (gross ÷ 13.5) − (gross × 0.50%). That is about 6.91% of gross pay each year. Revaluation each 31 December = 1.5% + 75% × the ISTAT consumer-price increase. Total TFR = the sum of every year’s accrual, each revalued for the years after it was earned. Example: €35,000 gross → €35,000 ÷ 13.5 = €2,593, less €175 INPS = €2,418 a year, revalued at 3.00% a year at 2% inflation.
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Worked example with real numbers
A warehouse worker in Milan earns €35,000 gross a year and stays five years. Each year €2,418 accrues (6.91% of gross). After year one the balance is €2,418. After year two it is revalued by 3.00% and another €2,418 is added: €4,908. By the end of year five the balance is about €12,835. At €50,000 gross over 10 years at 2% inflation, the same maths gives about €39,593 — the revaluation compounds, so long service is worth much more than the simple 6.91% × years suggests. Tax on the payout is separate and usually lower than ordinary income tax (a separate rate applies to TFR); check with a commercialista before you resign.
→ Severance pay estimator — the general European version
Reference table
Estimated TFR at different salaries and service lengths (2% inflation, no advance taken):
| Gross per year | 5 years | 10 years | 20 years |
|---|---|---|---|
| €25,000 | €9,168 | €19,796 | €46,401 |
| €35,000 | €12,835 | €27,715 | €64,962 |
| €50,000 | €18,336 | €39,593 | €92,802 |
| €80,000 | €29,338 | €63,349 | €148,484 |
→ Best bank accounts in Italy for expats — the flagship Italy guide
TFR in a pension fund or in the company?
Since 2007, employees choose where their TFR goes: left in the company, or paid into a pension fund (fondo pensione). Since 1 July 2026, new hires are enrolled in a pension fund by default unless they opt out within 60 days. A pension fund usually earns more than the statutory revaluation over a long career, and it is protected if the employer goes bankrupt (INPS guarantees TFR left in the company, but the fund route removes the risk entirely). The trade-off: money in a fund is harder to touch early, while TFR left in the company can be advanced (up to 70% after 8 years of service, for a first home or medical costs). This calculator estimates the accrued amount either way — where it sits does not change the formula.
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Sources and disclaimer
Rates used: Italian Civil Code art. 2120 — accrual gross ÷ 13.5 less 0.50% INPS (about 6.91% net), revaluation 1.5% + 75% of the ISTAT consumer-price index increase; INPS guidance on TFR for employees; the 1 July 2026 default pension-fund enrolment for new hires. IMPORTANT LIMITS: this is an estimate, not a payslip. The real figure depends on your collective agreement (some exclude certain pay items), part-time fractions, unpaid leave, and advances taken. Tax on the payout is separate. Rates and rules can change each January; verify the current rules with INPS or a payroll adviser before relying on the figure.
Estimate only — not tax or financial advice. This tool estimates only. It is not tax, legal or financial advice and does not determine your actual severance, loan or lender decision — check your national tax authority, bank or a qualified adviser for your situation. Always verify current figures with the official source or a qualified adviser before making decisions.
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