Italian TFR Calculator (Trattamento di Fine Rapporto)
TFR is money your Italian employer sets aside each year and pays out whenever the employment relationship ends — whether you resign, are dismissed, retire, or your contract simply expires. It is not severance pay for unfair dismissal, which is negotiated separately in Italy; it is deferred salary you are always entitled to. This calculator applies the mechanism in article 2120 of the Italian Civil Code to estimate how much you have built up, based on your gross annual salary, years worked, and inflation over the period.
Estimate under article 2120 of the Italian Civil Code: each year accrues gross annual salary divided by 13.5 minus the 0.50% INPS Guarantee Fund contribution, and the existing fund is revalued by a fixed 1.5% plus 75% of the change in the ISTAT FOI index. It does not account for advances already drawn, unpaid leave, or TFR paid into a supplementary pension fund, where growth depends on fund performance. Final taxation on payout uses separate taxation based on your income over the previous five years. Consult a consulente del lavoro for your specific case.
Net accrued TFR
Gross fund:
Yearly accrual
Accrued revaluation
Substitute tax (17%)
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How it works
Each year sets aside an amount equal to your gross annual salary divided by 13.5. From that figure you subtract 0.50% of the salary, which funds the INPS Guarantee Fund — the insurance that pays your TFR if the company goes bankrupt. On a €30,000 salary the arithmetic gives €30,000 ÷ 13.5 = €2,222.22, less €150 of contribution, so €2,072.22 actually accrues that year. What is already in the fund does not sit still: every 31 December it is revalued at a rate made of a fixed 1.5% plus 75% of the change in the FOI index published by ISTAT. With 2% inflation, the year rate is 1.5% + 1.5% = 3%. One detail most calculators skip: the current year quota is not revalued, only the previous balance. On that revaluation the employer pays a 17% substitute tax, deducted straight from the fund, which is why the net figure here is the gross minus that tax.
The three moving parts, as the law defines them
Article 2120 of the Italian Civil Code sets every component of TFR. These are the exact rules this calculator applies:
| Component | Statutory rule | What it applies to |
|---|---|---|
| Yearly accrual | Gross annual salary ÷ 13.5 | The gross pay for the year, including 13th and 14th month salaries |
| Guarantee Fund contribution | 0.50% of gross salary | Deducted from the accrual; funds the INPS scheme covering insolvency |
| Fixed revaluation component | 1.5% per year | The fund accrued as at 31 December of the previous year |
| Variable component | 75% of the FOI change | ISTAT consumer price index for blue and white collar households |
| Substitute tax | 17% of the revaluation | The revaluation only, never the contributions themselves |
Keeping it with the employer versus moving it to a pension fund
Every Italian worker chooses whether their TFR stays with the company or goes into a supplementary pension fund. The choice changes how the money grows and how it is taxed:
| Aspect | TFR held by employer | TFR in a pension fund |
|---|---|---|
| Return | 1.5% + 75% of FOI, guaranteed by law | Depends on the chosen fund performance, no guarantee |
| Tax on returns | 17% substitute tax | 20% substitute tax, cut to 12.5% on government bonds |
| Tax on payout | Separate taxation based on 5-year income | From 15% down to 9%, falling 0.30 points a year after year fifteen |
| Access | 70% advance after 8 years, for listed reasons | Advances per the fund rules, with their own conditions |
| Employer contribution | Not applicable | Many collective agreements add an employer top-up if you join |
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Preguntas frecuentes
- Do I get the TFR if I resign?
- Yes. TFR is paid whenever the employment relationship ends, regardless of who ends it or why. Voluntary resignation, dismissal, retirement, expiry of a fixed-term contract, or company closure — in every case you receive it in full. That is the key difference from dismissal compensation, which does depend on the reason.
- Why divide by 13.5 and not by 12?
- The 13.5 divisor comes from Law 297/1982 and is not an exact monthly salary. It splits pay across thirteen and a half monthly instalments, a figure agreed in the reform that replaced the old indennità di anzianità. In practice it makes the yearly accrual slightly smaller than one month of pay: on thirteen instalments of €2,308 a year the accrual is around €2,222, not €2,308.
- Can I draw an advance before leaving?
- Yes, under conditions. After eight years with the same employer you may request up to 70% of the accrued amount, and only for listed reasons: extraordinary medical costs, buying a first home for yourself or your children, or periods of parental or training leave. The company may cap advances at 10% of eligible employees and 4% of total headcount in any given year.
- How long does payment take after I leave?
- Collective agreements set the deadline, usually thirty to forty-five days from the termination date. If the TFR sits in a pension fund the timing follows the fund rules and tends to be longer. Where the company is insolvent the INPS Guarantee Fund steps in and pays once the claim is verified in the insolvency proceedings, which can take several months.
- Does the revaluation keep up with inflation?
- Only partly, and by design. The formula recognises 75% of the FOI change plus a fixed 1.5%, so with low inflation the TFR gains purchasing power and with high inflation it loses some. At 2% inflation the rate is 3% and you gain; at 8% the rate reaches 7.5% and you lose half a point in real terms. The fixed 1.5% is what cushions years of stable prices.