The Italian TFR or “Trattamento di Fine Rapporto” is something that many foreign employers are curious about.

The TFR is something all employers are required to set a side as a severance payment for the employees, and it is paid to the employee when they leave the company, whether it is to search for a new employment or at the end of their career.

The calculation for the TFR is as follows: 

  • Take the employee’s gross annual salary (from 1 January to 31 December) and divide it by 13.5. 
  • From that result you deduct the taxable income that regards INPS (Italian Social Security / pension agency) multiplied by 0.5%. 

The TFR is then increased according to a percentage that is communicated by ISTAT (the National Statistical Institute).

Learn more on TFR on the INPS website here or read more about our services here. If you need more support, please contact Internago: info@internago.com

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