Tax and social security burden

The tax and social security burden indicators are estimated by a microsimulation model which uses data from Istat survey “Income and living conditions” (Eu-Silc European Statistics on Income and Living Conditions) and data provided by the Italian Revenue Agency and Inps (the National Social Security Institute). These indicators allow to estimate the weight of the tax burden by various characteristics of individual and households in Italy.

In 2011, the average labour cost, defined as the sum of gross wage and social security contributions paid by employers, is of 31,049 euros per year. The disposable net income which remains available to the worker reaches 16,666 euro, or just over half of the total labour cost (53.7%) and the tax wedge, which is the sum of personal income tax and social security contributions of the employee and the employer, reaches an average value of 14,383 euro, or 46.3% of labour costs.

The largest component of the high tax wedge is represented by the social security contributions of employers (25.6%), while the remaining 20.8% is paid by the workers: 14.1%, in the form of direct taxes and 6.7% of social contributions.

All components of labour costs are on average higher in the North-west, with a consequent decline in the share of net income to the worker. Gender differences are noticeable: the cost of labour of female employees is on average equal to 75% of the male employees and the net income is 78% of that of men.

For information:
Socio-Economic Statistics Directorate

Gabriella Donatiello
ph. +39 06 4673.4579
email donatiel@istat.it

Paolo Consolini
ph. +39 06 4673 4580
consolin@istat.it