TFR Calculator
Calculate Italian severance pay and compare options
TFR Calculator - Italian Severance Pay Calculator | DailyHub
Calculate the TFR (Trattamento di Fine Rapporto) you would receive at the end of your employment. Estimate the gross amount, ISTAT revaluation, separate taxation, and compare whether it is more convenient to leave TFR with your employer or direct it to a pension fund.
How It Works
- Enter your gross annual salary (RAL) in euros
- Enter the number of years of service (current or projected)
- Set the average income tax rate (default 23%)
- Select where your TFR is held (employer or pension fund)
- Read the result and the comparison between both options
Frequently Asked Questions
How is TFR calculated?
Gross TFR is calculated by dividing the gross annual salary by 13.5 for each year of service (art. 2120 Italian Civil Code). Annual revaluation is added at 1.5% fixed plus 75% of ISTAT inflation (historically ~2.5% average).
Employer vs pension fund: what is the difference?
TFR kept with the employer grows at a guaranteed rate (~2.5% historically). TFR in a pension fund can yield more (~3.5% average estimated) but with variability tied to financial markets.
How does separate taxation work?
TFR is taxed with so-called separate taxation (art. 17 TUIR): an income tax rate is applied based on the average income from the last 5 years, usually lower than the ordinary marginal rate. The exact calculation is done by the Italian Revenue Agency.
Can I change where my TFR is allocated?
Employees hired after 2007 have 6 months to choose. Once directed to a pension fund, you cannot revert to employer holding. If kept with the employer, you can still direct it to a fund at any time.