Let’s break down the Busta Paga – your Italian paycheck. The busta paga or your paycheck arrives with every payment, normally at the end of the following month. But we’ve got to be honest, it is really tough to read. In fact, majority of Italians can’t even tell you what they are looking at. But understanding your busta paga will help you understand how much money arrives to you each month, and understand things like your taxes, your vacation days, and various bonuses. It’s important to know how to read a busta paga.
So, let’s jump into it, here is a little guide to help you navigate your next paycheck in Italy.
How to Read a Busta Paga: Breaking it Down
Grab your last busta paga and you’ll notice there is a lot of information on there. It will make it easier if we break it down into the various parts. You can break it down into three clear sections.
After reading all this information, you’ll be able to check:
- the actual amount of your salary;
- the number of hours, accrued vacation days, and leave;
- the amount of social security contributions paid by the employer.
But let’s go into detail to understand how to read the busta paga better.
Busta Paga Header- The Demographics
Right at the top you’ll find the most basic information that you probably already know – employer’s data (including INPS identification number, INAIL territorial insurance position) and the employee’s personal data. You’ll also find details on the contract – the level of your CCNL contract, your position title, the date hired, and how long you have been working there.
The Real Info -Your Salary
Reading further down, in the central part you’ll be able to see more information about your gross salary. Here you will also see information about overtime, unpaid leave, and more variables.
You’ll see information on – such as vacation, permessi, and allowed leaves. As well as so-called “protected events” including Maternity, parental leaves, sickness, etc.
Potentially you could have details on business trips, company bonuses or events, if relevant.
You’ll also see a payment for INPS- social security – contributions (contributi previdenziali). You’ll also see a reference to the TFR – Trattamento di Fine Rapporto, which is a small amount of the pay that is retained during work, to be returned and paid when your contract ends.
Other information you will find:
- “Importo base”: This is your base salary that is offered with the contract. The cost of each work hour is usually established by law through the CCNL contracts.
- “Riferimento”: known simply as reference, this will state the hours you worked, both regular and overtime. It will also list the vacation days here.
Onto the Deductions- Trattenute
The section on Trattenute, or deductions, will clarify what taxes and contributions are paid.
So what are the main deductions? You will see the ones for INAIL, INPS, and IRPEF, all related to social security and tax deductions.
Social security contributions are the ones that the employer is required to pay to the National Social Security Institute (INPS) and the National Institute for Insurance against Accidents at Work (INAIL) in order to guarantee the employee’s pension or disability, economic benefits in case of illness and maternity, redundancy fund, and family allowances. A portion of these contributions is deducted from the employee’s payslip, while the remaining share is the employer’s responsibility, meaning paid from the company, not relevant to your earnings,
Tax deductions, on the other hand, are deducted from the employee’s salary and subsequently paid to the relevant authorities. The Personal Income Tax (IRPEF) deductions are calculated based on the employee’s earnings. Here are the 2023 IRPEF percentages:
- up to €15,000- 23%;
- between €15,000 and €28,000 – 25%;
- between €28,000 and €50,000 t- 35%;
- Over €50,000 – 43%.
Finishing up – How to Read a Busta Paga Footer
At the end of your paycheck, you can find other subjects such as vacation days earned, ROL (leave time), and banked hours (when applicable). This is of course also where you will find your final amount to be received.
These are all regulated according to the National Collective Bargaining Agreement (CCNL) contracts. Vacation days are usually managed as follows: 2 weeks of leave per year, and the rest is based on individual needs within the following 18 months.
Also, in the payroll footer, you will see your competenze (the pay coming in), minus the trattenute, to share the netto al mese – your net salary.
If you found this information helpful you can show your support by buying me a glass of wine 🥂. I really appreciate it and each glass inspires me to research more into life in Italy!