How to read an Italian payslip?
Are you trying to read an Italian payslip (or “busta paga” as it’s called in Italy) for the first time? We can imagine it can be quite complex to read a foreign payslip. Italy has one of the most complex payslips globally, so you’re not the only one who is having trouble. Allow us to help you out. We will help you gain a good grasp on the main sections of Italian payslips.
Three main sections
Italian law describes the content that must be included, but not how the content must be organized. Therefore, placement of key information may vary on Italian payslips. Luckily, payslips are comprised of three sections that always have specific key information:
- The header; which contains information about the employer, the employee and the elements of remuneration.
- The middle section; which has information about the period (let’s say the previous month), earnings and deductions.
- The footer; where you have adjustment, contributions and taxes, holidays accrued and severance. And most important; total amounts and net amount.
Let’s get into more detail on each section of the payslip.
The header
As stated above the header provides all information about both employee and employer. They can be read as:
- Employer information: Company’s code, Employer’s name, address, Fiscal code, INPS number, INAIL number and INPS’s Branch.
- Cost Center: External employee/Internal employee.
- Period of salary: month and year, variables of month/year.
- Employee’s information: (code from the payroll software, surname, name, fiscal code, date of birth, start date, end date, level, serial number from the payroll software).
- Elements of remuneration: weeks (usually 4), days contributions for INPS (usually 26), working days (it depends on the month 22 or 21), worked days and hours, days deductions (30 or 31), next seniority step (every 3 years of employee’s seniority), monthly gross salary’s components (Minimum “Paga base”
- (1.1), Contingency “CONTING.”
- (1.2), Third Element “3° ELEMEN.”
- (1.3), Function allowance “IND.FUNZ.”
- (1.4), A.F.A.C.
- (1.5), Absorbable super minimum “SUP.ASS.”
- (1.6) and total.
The middle section
This is where you find additional elements that are included in the gross salary for the month. These can differ from month to month. We can mainly devide the middle section in 5 columns:
- Variables entries of the month contains regular monthly items such as:
- Monthly pay (a)
- 13th monthly salary (b)
- 14th monthly salary (c) and allowance if it’s in the contract and occasional items such as bonus, overtime hours, sick leave, maternity/paternity leave, holiday taken, bank holiday
- Pension contribution (d) is 9.19% of monthly gross salary
- FIS D.Lgs. 148/2015 fino a 15 dip (e) “Fondo Integrazione Salariale” (Wage Integration Fund) is 0.26667% of monthly gross salary while
- ENTE BILATERALE 1a Fascia (f) is 0.05% of minimum and contingency
- Gross IRPEF (h) is calculated on the IRPEF tax base (g)
- IRPEF deduction (j) is the result obtained by subtracting the earned income credit (i) from gross IRPEF (h)
- The useful retribution to the TFR (k) is listed as well as the monthly severance accrual (l)
- INAIL base (m) is calculated on gross salary.
- Basic amount of each item
- Reference is expressed in days, hours, month and percentage. The risk item INAIL 0722 refers to office activities in the example.
- Withheld: all amounts withheld for each item. The withheld amounts are obtained by multiplying the basic amount and the related reference of each item of the column variables entries.
- Entitlements: all amount entitled for each item. The entitled amounts are obtained by multiplying the basic amount and the related reference of each item of the column variables entries.
The footer
This is where you find information relating to social security and tax deductions, and of course the net pay for the month, “netto in busta”. The footer has these specific items (always referred to a calendar year):
- Adjustment displays in December payslip related to the calendar year for deductible expenses, taxable income, IRPEF gross, IRPEF deductions, regional tax and municipal tax.
- Progressive contributions (INPS base, INAIL base) and taxes (IRPEF base and IRPEF paid).
- Severance (T.F.R.) is listed as the amount of severance accrued during the year.
- Holidays’ accruals (residual previous year, accrued in the year, enjoyed in the year, total). Here is an example with Vacation in days and Ex-festività in hours accrued and the total.
- Total section (total entitlements, total withheld and net amount of the month)
- Communication box
How can we help you?
Are you struggling to decipher your payslip or seeking reliable payroll solutions in Italy? Look no further! Our dedicated HR experts in Italy are poised to assist you. Whether it’s understanding your earnings statement or streamlining your payroll process, we’ve got you covered. Contact us today, and let’s simplify your payroll experience together!
