As the year unfolds, payroll updates in Italy 2025 continue to reshape the HR landscape, presenting key developments that businesses must track. Whether you are already operating in Italy or planning to expand, staying informed can help you avoid unwanted situations and ensure effective workforce management.
Updated Income Tax Brackets
Italy’s income tax system (IRPEF) was streamlined in 2024 and remains in place for 2025:
- 23% for income up to €28,000
- 35% for €28,000–€50,000
- 43% for income above €50,000
The legislative reform (Legislative Decree 216/2023) increased the tax deduction for employees earning up to €15,000 to €1,955 from January 1, 2024—a rate that remains confirmed in 2025, according to “Informazione Fiscale”
This deduction serves as a tax credit, effectively creating a “no‑tax” buffer of €1,955 for low-income earners, and payroll systems must reflect this to ensure accurate withholding.
Digital Payroll Registry
The mandatory Digital Payroll Registry continues in 2025, requiring monthly electronic submissions of payroll data to Italian authorities. This digital shift supports transparency and audit readiness, but it also means investing in compliant software.
Parental Leave
Italy’s parental leave has been extended to 10 months for couples (or 11 months for single parents), with enhanced compensation during the early months:
- Two months at 80% of salary in 2024, within the first six years of the child’s life
- In 2025, the first month remains at 80% and the second at 60%—with up to 10 months total entitlement
Green Payroll Incentives
Italy’s Green Payroll initiative encourages eco-friendly payroll practices—like digital payslips and paper reduction—with potential tax benefits for compliant companies.
Conclusion
Regulatory change in Italy continues to evolve toward digitalization, equity, and sustainability. By staying compliant and adapting early, companies can reduce risk and support a more efficient payroll operation.
For more insights on managing payroll in Italy or across Europe, get in touch with Internago—we are here to help. Also read our other blogs about Italy, such as “Tax obligations for foreign employers“, “The cost of employing in Italy“, “registering as a foreign employer in Italy” and many more.
Contact us at info@internago.com or visit www.internago.com.
Disclaimer:
This blog post provides a general overview and introductory examples related to payroll. In practice, there are many additional factors to consider, and this article should not be regarded as comprehensive guidance. For a more in-depth discussion tailored to your specific needs, please feel free to contact us.