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30.10.2013 - Social security contributions

In the last article we have found out that the net salary is the result of the following operations:

NET SALARY

Gross salary

less (-) Social security contributions (INPS)
equals (=) Taxable income
less (-) (IRPEF deduction less tax exemptions)
equals (=) Net salary free of deductions
more (+) Family allowance
equals (=) Net salary presented on the pay slip

Let’s take as an example a gross salary of 1.399,00 euro.

FIRST STEP

It all starts with the social security contributions. They are called FAP on the pay slips and represent INPS contributions (Istituto Nazionale della Previdenza Sociale - National Institute of Social Insurance) at the expense of the employer equal to 8,89% plus, if the business segment provides so, a certain rate for CIGS (Cassa Integrazione Guadagni - unemployment insurance fund) equal to 0,30%, which gives us the total of 9,19%. For the employee, this total is deductible. It means that it will not be a subject of taxation.

In this way, we have come to a fundamental result – the taxable income which in our case is equal to 1.270,43 euro

NET SALARY

Gross salary

1.399,00 €
less (-) Social security contributions 9,19%(INPS) 128,57 €
equals (=) Taxable income 1.270,43 €
less (-) (IRPEF deduction less tax exemptions)
equals (=) Net salary free of deductions
more (+) Family allowance
equals (=) Net salary presented on the pay slip

Next steps will be presented in the following articles.

To be continued...

For more information and assistance contact us

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