Gross to net Payroll Engine Italy

G2N Nova is Italy’s leading Gross to Net engine, built to deliver precise, real-time payroll tax calculations across Italy and over 100 global markets.

This advanced Payroll tax engine for Italy runs on a unified, native platform — without storing or accessing employee-identifiable information. Designed to align with Italy’s stringent data protection laws, G2N Nova keeps sensitive employee data securely within your systems.

By performing gross-to-net calculations without ever handling personal data, G2N Nova offers a seamless, compliant, and future-ready payroll solution for modern enterprises operating in Italy and beyond.

Ready to transform your payroll operations?  Request your demo today.

---

Gross to net payroll tax engine for Italy

Looking for a smarter way to manage payroll compliance in Italy? Our cloud-based Tax Engine Italy, powered by G2N, delivers real-time, automated payroll tax updates—so you’re always in sync with the latest regulations.

This Payroll Calculator Italy seamlessly integrates with your historical payroll data and works alongside your existing HCM, ERP, or WFM systems—no need for a full payroll system replacement.

• Keep your current systems in place
• Automate tax updates with a plug-and-play solution
• Ensure accuracy and compliance at every step

Solutions

• HCM / ERP / WFM Systems: G2N integrates effortlessly with all major HCM, ERP, Time & Attendance, and Payroll systems. Organizations can continue using their existing infrastructure without disruption, while benefiting from real-time tax updates and accurate payroll processing.
• System Integrators: G2N empowers system integrators to easily incorporate cross-border payroll capabilities into their platforms. This simplifies global payroll management and offers full control over the user experience—delivering tailored, seamless payroll solutions for their clients.
• Enterprises: Simplify your payroll operations with G2N’s unified platform. Eliminate processing complexities, free up valuable internal resources, and refocus on strategic initiatives—whether it’s business growth, product development, or long-overdue innovation.
• SMEs: Designed for flexibility and scalability, G2N grows with your business. From a handful of employees to tens of thousands, our solution ensures precise, real-time payroll processing, making it an ideal choice for small and mid-sized companies navigating evolving compliance requirements.
• Service Providers: Deliver greater value to your clients with G2N’s robust, automated payroll processing platform—trusted by leading Fortune Global 500 companies. Focus on what matters most: client satisfaction, operational efficiency, and sustainable growth.

How It Works

Input Components

• Employee Information: Collects key details including salary, benefits, and personal data to ensure comprehensive payroll processing.
• Leave and Absence Management: Efficiently tracks employee leave, absences, and time-off, keeping payroll data accurate and up to date.
• Time and Attendance Monitoring: Records working hours, attendance, and overtime to support precise payroll calculations.

G2N Nova Payroll Process

• Local Compliance and Filing: Seamlessly connects with Italian statutory bodies to handle tax and social security filings accurately and in full compliance with local regulations.
• Regulatory Adherence: Backed by a dedicated compliance team, G2N Nova ensures that all payroll activities align with Italy’s complex legal requirements.
• Real-Time Payroll Calculations: Our Salary Calculator Italy delivers immediate and precise gross-to-net salary computations, guaranteeing correct payments and deductions every pay cycle.

Output Components

• Financial Reporting: Generates detailed general ledger entries to support accounting and reconciliation.
• Cash Flow and Treasury Reports: Provides valuable insights to optimize treasury management and cash flow planning.
• Bank Transfer Files: Prepares secure payment files for smooth and timely salary disbursements.
• Payslips: Produces clear, detailed payslips that outline all deductions, taxes, and net salary amounts for employees.

Why Choose G2N Nova for Italy?

Designed for adaptability and growth, G2N Nova offers a secure, real-time payroll platform tailored to the unique demands of the Italian market. It integrates effortlessly with your existing systems, simplifying payroll management and enhancing transparency. Our Salary Calculator Italy ensures you stay compliant while providing accurate and timely salary calculations, making payroll processing more efficient than ever.

Features of G2N Payroll Engine Italy

Benefits

Streamlined Payroll Processing

G2N Payroll Engine Italy delivers fast, accurate, and fully compliant payroll processing, supported by a robust tax calculation system tailored specifically to Italy’s regulatory requirements.

Seamless Integration with Payroll and HR Systems

Our platform offers effortless integration with Italy’s payroll and HR systems, ensuring smooth data flow, enhancing operational efficiency, and reducing errors in payroll tax calculations.

Automating Data Extraction

G2N automates the extraction of payroll data, significantly cutting down manual input and associated errors, thanks to its advanced payroll calculation capabilities designed for the Italian market.

Multi-Country Payroll Management

G2N empowers businesses operating in Italy to manage payroll across multiple countries efficiently, maintaining compliance with local tax laws and streamlining payroll processing through one unified system.

Everything you need to know about Gross to Net Calculation in Italy

Managing payroll in Italy involves navigating a complex web of tax regulations, social security contributions, and statutory deductions. Accurate gross-to-net salary calculations are essential—not only for compliance, but also for maintaining employee trust and payroll efficiency.

The following is the information required to calculate gross to net salary:

Gross Salary

G2N Payroll Engine Italy ensures exact computation of gross remuneration, aligned with national payroll legislation. It takes into account all relevant contributions and statutory deductions, delivering fully compliant and dependable results.

• Non-taxable and contribution-exempt compensation: Certain benefits or reimbursements are excluded from both social security charges and withholding tax.
• Taxable but contribution-exempt compensation: Specific forms of income may be subject to income tax while remaining outside the scope of social security obligations.
• Fully liable compensation: Standard earnings that are subject to both withholding tax and social security contributions as per Italian payroll laws.

With G2N, every element of compensation is processed with attention to regulatory detail—ensuring transparency, accuracy, and compliance across your Italian payroll operations.

Region of residence

Your region of residence as of January 1st of the given fiscal year is a determining factor in the regional IRPEF (personal income tax) surcharge. Each of Italy’s 20 regions, including autonomous provinces like Trento and Bolzano, may set their own additional income tax rates within limits established by national law.

This surcharge directly influences net salary and must be considered in every payroll cycle. Here’s a list of all applicable regions:

• Abruzzo
• Basilicata
• Bolzano (autonomous province)
• Calabria
• Campania
• Emilia-Romagna
• Friuli-Venezia Giulia
• Lazio
• Liguria
• Lombardy
• Marche
• Molise
• Piedmont
• Apulia
• Sardinia
• Sicily
• Tuscany
• Trentino-Alto Adige
• Umbria
• Aosta Valley
• Veneto

Number of Monthly Payments

Italian payroll practices often include more than 12 payments per year, based on employment contracts and industry norms:

• 12 Payments: The basic setup, where salary is split across 12 months. It’s less common in Italy.
• 13 Payments (Tredicesima): Standard across most sectors. The 13th salary, usually paid in December, serves as a holiday bonus. It is taxable, but calculated and withheld separately from the base salary.
• 14 Payments (Quattordicesima): Common in sectors like commerce, tourism, and metalworking, the 14th month salary is typically disbursed in June or July, also with separate tax handling.

Municipal Surcharge

Each municipality may apply its own additional income tax. For example, Milan’s municipal surcharge is often pre-filled in many salary tools. To find the applicable rate for your city of residence, refer to the Italian Department of Fiscal Policies. This percentage is critical in final salary computations.

Meal Voucher

Meal vouchers are a popular employee benefit and vary in form and tax treatment:

Types

• Monetary compensation in a paycheck
• Paper vouchers – tax-free up to €4.00/day
• Electronic vouchers – tax-free up to €8.00/day
• Company canteen access

Amounts exceeding the tax-free limits are considered part of the taxable salary and must be reported accordingly. Electronic vouchers—such as those issued by providers like Coverflex—are exempt from taxation up to €8.00 per day, while paper vouchers are tax-free up to €4.00 per day.

Employers may offer vouchers that exceed these thresholds; however, any amount beyond the exemption limit is considered taxable income for both the company and the employee, and is included in the employee’s taxable base.

Days worked per month

Payroll calculations factor in the number of actual working days per month, especially for part-time contracts, sick leave, and unpaid absences.

Dependent Spouse

Indicate whether your spouse qualifies as a dependent (i.e., has no or very limited income).

Children Over 21

Children remain fiscally dependent if their annual income is below:

• €4,000 (if under 24 years old)
• €2,840.51 (if 24 years or older)

Other Dependent Family Members

As of 2025, only cohabiting ascendants—such as parents and grandparents—will qualify for tax benefits.

Children with Disabilities

Additional tax deductions and social contributions may apply.

Fringe Benefits

Italy allows for several fringe benefits and welfare options that reduce taxable income, supporting both employees and their families:

General Fringe Benefits

• Tax-free up to €1,000/year, increased to €2,000 if the employee has dependent children.

Free Time

No tax-exempt ceiling applies; used to support well-being through cultural or leisure services.

Public Transport

Tax-free reimbursements are available for transport costs incurred by the employee and dependents.

Instruction

Supports tax-free reimbursements for educational expenses of the employee and dependents.

Family Care

Using this benefit, you may request reimbursement for health care services provided to dependent family members over the age of 75 or who are not self-sufficient.

Pension Funds

Contributions are deductible up to €5,164.57 per year, providing long-term savings and immediate tax advantages.