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 contact Internago: info@internago.com

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