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Budgeting for taxes to lighten the tax burden - Your tax consultant in South Tyrol

Wages / Salary

The wage and the related labor costs play a central role in the economic world. Labor costs consist of gross salary and additional costs (health insurance, accident insurance and other specific expenses).

Experience has shown that contract negotiations have to be based on the gross salary, due to the fact that wage agreements (13 monthly salaries in craft industries/manufacturing, 14 monthly salaries in trade/services sector) and the personal factors affecting the worker (such as tax exemption status and progressive taxation burden) are likely to have a considerable influence on net salary.

Generally, the final costs for the company can be determined by raising the gross salary by 40 percent. If desired, we can provide a more detailed breakdown of gross- and net salary.

One particularity of the Italian labor law system is the payment of so-called ”severance pay“, at the moment of termination of the employment contract.. This payment, however, is not comparable with an “end-of-contract gratuity”. The amount of the severance pay equals one month’s salary for each year of service and is due to the employee in all cases, regardless of the actual reason for the termination of the contract (severance pay is also due in the event of dismissal).