Italian TFR Calculator (Severance Fund)

The TFR (Trattamento di Fine Rapporto) is a mandatory severance fund set aside by Italian employers each year. It equals roughly one month of gross pay per year of service (RAL / 13.5) and is paid out when employment ends, whether through resignation, dismissal, or retirement.

By law, 0.50 % of the RAL is deducted from each annual TFR quota and paid to INPS. The quota that compounds each year is the net figure (RAL / 13.5 minus 0.50 % of RAL).

Each year, the TFR stock already set aside is revalued (rivalutazione) at a statutory rate of 1.5 % fixed plus 75 % of the annual ISTAT consumer-price increase. This revaluation compounds over a career and can add thousands of euros compared to a simple flat accumulation.

Italian law (art. 2120 Civil Code) defines the annual TFR quota as the total annual remuneration divided by 13.5. This is equivalent to approximately 7.4 % of RAL per year and is fixed regardless of whether you are paid over 12, 13, or 14 mensilite.

The TFR is not taxed as ordinary income. It is subject to tassazione separata at a rate derived from the average tax rate applied to the employee over the preceding five years. The rivalutazione accrued from 1 January 2001 is taxed separately at a flat 17 % imposta sostitutiva. This calculator does not compute the tax due at liquidation.

If you elected to transfer future TFR accruals to a complementary pension fund (fondo pensione), the amount no longer accumulates with the employer. This calculator covers only TFR retained by the employer.