TFR
TFR means Trattamento di Fine Rapporto, the Italian end-of-employment fund built up during an employee’s service.
Example: Each year a share of eligible remuneration is set aside and the existing fund is subject to statutory revaluation rules.
Italian employment glossary
Understand RAL, TFR, IRPEF, INPS, CCNL and other terms used in Italian payslips and employment contracts.
RAL
RAL means Retribuzione Annua Lorda, the Italian gross annual salary before employee contributions and income tax.
Example: A €30,000 RAL is not the same as €30,000 take-home pay.
IRPEF
Italy’s personal income tax. For employees, it is normally withheld by the employer as the tax substitute.
Example: Gross IRPEF can be reduced by deductions and other reliefs provided by the tax rules.
INPS
The Italian National Social Security Institute, which administers much of Italy’s social security and welfare system.
Example: An employee contribution is deducted from gross pay before the final take-home amount is calculated.
CCNL
The Italian National Collective Labour Agreement, which sets sector-specific rules such as minimum pay, working conditions and additional salaries.
Example: A 14th salary is not universal because it may depend on the applicable CCNL.
Taxable income (imponibile)
The amount used as the base for a particular tax or contribution. Taxable income can differ between tax and social-security calculations.
Example: The income base for IRPEF is not always identical to the social-security base.
Tax deductions (detrazioni)
Amounts that reduce gross tax when the relevant legal conditions are met.
Example: The employee deduction can vary with income and the period worked.
Social contributions (contributi)
Social-security and welfare payments due in connection with employment.
Example: The split between employee and employer contributions depends on the applicable rules.
13th salary (tredicesima)
An additional salary payment commonly accrued in proportion to useful months, according to the contract and applicable rules.
Example: Six useful months can represent half of the reference monthly base in a simplified calculation.
14th salary (quattordicesima)
An additional salary payment provided only by some CCNLs or individual employment agreements.
Example: Before estimating it, verify that your CCNL actually provides this payment.
Net salary (netto)
The amount left after the tax, social-security and other deductions applied to gross pay.
Example: Net pay can change because of local taxes, deductions and year-end adjustments.
Gross salary (lordo)
Pay before employee tax and social-security deductions.
Example: Monthly gross salary is not always simply RAL divided by the number of payments.
Superminimo
A contractual pay element above the applicable minimum. Its absorption rules must be checked in the contract and CCNL.
Example: A superminimo can affect gross monthly pay and some accrual bases.