There is no payroll tax.
Social security and pension scheme contributions
In Italy the following contributions in favour of the employees are mandatory by law:
- contributions for pension schemes;
- contributions for social security covering life insurance, health, maternity, disability, unemployment and family allowances.
All the above contributions must be paid by the employer to the public body “I.N.P.S.”.
Employers must withhold social security and pension scheme contributions due by the employee (part of the contributions for the employee is due directly by the employer). The amount of social security and pension scheme contributions depends on the type and size of the business and the rank of the employee.
The aggregate contributions range from approximately 40% to 45% of the aggregate remuneration accrued in the relevant year. The aggregate contributions are normally borne by the employer for 80% to 85% of their amount; the rest is borne by the employee and must be withheld by the employer.
Social security contributions are deductible for corporate income tax purposes.