The tax and social security burden indicators at individual and household level 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 2012, the average labour cost, defined as the sum of gross wage and social security contributions paid by employers, was 30,953 euros per year. The disposable net income which remained available to the worker reached 14,455 euros, or just over half of the total labour cost (53.3%) and the tax wedge, which is the sum of personal income tax and social security contributions of the employee and the employer, reached an average value of 14,455 euros, or 46.7% 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 21.1% is paid by the workers: 14.4% as direct taxes and 6.7% as social contributions.
All components of labour costs were on average higher in the North-west area, with a consequent decline in the share of net income to the worker. Gender differences are noticeable: the cost of labour of female employees was on average equal to 76% of the male employees and the net income was 79% of that of men.
Household Economic Conditions Division
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