The calculation of regional and municipal income tax surcharges (IRPEF) for an employee is done in the December payslip of the previous year, as it is in this month that the employee’s final taxable income is determined. This process is regulated by Article 50, paragraph 3, of Legislative Decree 446/1997 and the provisions issued by the Ministry of Economy and Finance (MEF).
As stipulated by the regulations, the surcharge withholding mechanism consists of two distinct stages:
Calculation and Determination of the Tax: In December of the previous year, the total amount due for the regional and municipal surcharges is calculated based on the employee's final taxable income. This calculation is made in accordance with the rates set by the respective regions and municipalities of residence, as provided by law and the MEF's guidelines.
Payment of the Surcharges: From January to November of the following year, the total amount of surcharges is divided into 11 equal monthly instalments, which are withheld from the employee's salary. The deductions include both the regional and municipal surcharges and are subject to the rates set by each local authority (the municipality and the region of residence). For example, in December 2025, the regional and municipal surcharges for 2026 will be calculated, and these will then be distributed in 11 monthly instalments from January to November 2026.
Advance Payments: Starting in March each year, advance payments for the regional and municipal surcharges are made based on the taxable income of the previous year and the rates set for the current year.
The system for determining and paying the regional and municipal surcharges follows the guidelines issued by the Ministry of Economy and Finance (MEF), which provides for the distribution of amounts due based on the employee's place of residence and the decisions made by individual local authorities. The rates may vary each year according to the annual resolutions passed by each municipality and region. Therefore, it is always necessary to refer to the updated provisions published on the website of the MEF's Department of Finance.