For members


‘Tredicesima’: What is the 13th salary in Italy and how is it calculated?

At this time of year, many Italian employees are awaiting their 13th or even 14th salary instalment. How does this work - and who gets it?

Swiss cash bills seen up close
Italian employees can count on an extra paycheck this month to cover festive spending. File photo: PHILIPPE HUGUEN / AFP

People who move to Italy are often surprised to find that employees of Italian companies are paid 13 times a year instead of 12.

As December payday approaches, almost 34 million people in Italy are looking forward to getting double their usual salary thanks to the tredicesima, or ‘thirteenth’.

While people from Anglophone countries like the US and UK are unlikely to be familiar with the concept of getting paid a double salary in December, similar systems exist in some other European countries, including Switzerland.

Here are a couple of things to know about the tredicesima.

Who gets a 13th salary and when?

This payment is due to all workers in both the public and private sector with an employment contract, either fixed-term or open-ended. Pensioners also get a 13th payment in December.

This means the self-employed, including freelancers and contractors, do not get a 13th payment.

READ ALSO: Freelance or employee: Which is the best way to work in Italy?

Thirteenth salaries are fully paid by the employer, while the payment for pensioners comes via the state social security agency, INPS.

There is no fixed date for receiving the payment, but it generally comes before December 20th. The exact terms and conditions will depend on the company and the sector you’re employed in.

For those working in public administration, the tredicesima is set to be paid along with the 12th salary instalment in December.

The 13th salary is not a bonus

It might sound like Italian employers are handing out generous end-of-year bonuses, and it is in fact sometimes referred to as a gratifica natalizia, or Christmas bonus.

And while it is no doubt helpful (and very pleasant) to get a lump sum at the end of the year, technically the tredicesima is not an extra perk but just another way of dividing up an employee’s salary.

Having it paid in this way is an expectation, and a compulsory part of all employment contracts, unless employees request otherwise.

It is believed to have begun as an optional Christmas bonus, but in 1937 it became a requirement under Italian law for certain types of employers, eg. factory owners, to give all manual workers a 13th payment in December. The rule was then extended to cover all employees, and from this point the ‘extra’ sum was included in the annual salary as standard.

How is it calculated?

There’s no one standard way of calculating this payment under Italian employment law. It depends on the individual collective labour agreements made between industry groups and trade unions in each sector.

Generally, it’s a fixed sum equal to one-twelfth of the gross salary received during the year, without taking into account any overtime or bonuses.

READ ALSO: How sick leave pay in Italy compares to other countries in Europe

Deductions may be made from the payment due to absences which affected the gross salary amount, though this is not affected by, for example, certified sickness absence or parental leave.

Why not just pay 12 salaries?

The idea behind this system is that the 13th instalment paid out in December (in effect, two months’ salary at once) will help pay for Christmas expenses and other end-of-year bills.

But some companies and sectors do pay higher monthly wages (in 12 installments) instead. Individual employees can also request to be paid this way, even if 13 payments is standard practise in their sector.

Millions of people in Italy will get an extra salary payment in December to help pay for Christmas shopping and other end-of-year costs. (Photo by FILIPPO MONTEFORTE / AFP)

And some employees even get a quattordicesima, or 14th payment, usually paid in June to help cover the cost of a lengthy Italian summer break – though this is more unusual and, unlike the 13th, it’s not a legal requirement for employees in any sector.

A 14th salary instalment is a perk which is usually only available to high earners on particularly good employment contracts or those with gold-plated pensions.

What about bonuses?

Bonuses are independent of the 13th payment and depend on the sector and the employer.

Italian law doesn’t contain any requirement that employers provide a bonus, which may consist of money, shares, stock options in the company, or other perks. 

This is perhaps not surprising when you consider that Italy doesn’t even have a national minimum wage law.

READ ALSO: ‘It’s crazy’: What to expect when you work for an Italian company

But, mainly due to the strong influence of Italy’s trade unions, there are strict but varying rules on pay, conditions, and the terms and conditions set out in employment contracts in each sector.

If you’re unsure what your Italian employment contract contains or are concerned that it may not comply with Italian employment law, speak to a trade union body representing your sector or an independent legal advisor.

Member comments

  1. “A 14th salary instalment is a perk which is usually only available to high earners on particularly good employment contracts or those with gold-plated pensions”

    Absolutely not the case. It completely depends on which CCNL (collective national labour contract) one is on. The very common “Commercio” contract offers the the quattordicesima to everyone, regardless of salary level.

    But the whole point of the 13ma/14ma is that one’s annual salary is the same, it’s simply being divided up 13 (or 14) ways. If you think of your compensation in terms of annual gross salary then it makes little difference when you’re paid it; only if you exclusively think of your salary in terms of the monthly net (admittedly as many Italians consider it….) should getting a thirteenth or fourteenth mensilità be considered something to shout about!

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For members


EXPLAINED: How your Italian pension works

If you work in Italy you’ll pay a chunk of your income every month towards a pension - but how does the Italian pension system work, and what else should you know when planning your retirement?

EXPLAINED: How your Italian pension works

According to the World Economic Forum, Italy is among the most generous countries in the world when it comes to what its state pension provides. But when it comes time to get yours, you’ll quickly learn that navigating Italy’s pension system can be complicated.

Generally speaking, Italy has three types of pension: the state or public pension, “closed” or professional pensions, and private pension funds. Of these, the first is the most common, and most important to know about.

State pension

Up until 1995, workers’ social security payments guaranteed them a defined pension benefit that increased with every year of work. Usually, it ended up at around 80 percent of your most recent salary.

But facing a rapidly aging population and shrinking base of contributors, Italy switched to what’s called a “notional defined contribution” system, where your state pension amount depends on how much you and your employer contributed to the pension system over your years of work. (Generally, your employer contributes €2 for every €1 you do.)

Given that 1995 is almost 30 years ago (gulp), we’ll assume for the sake of this article that few of you reading this were contributing to an Italian pension before the system changed. If this does describe you, your pension calculations will be more complex, and you might want to seek advice from a commercialista or another financial expert.

All residents of Italy are entitled to claim a state pension once they reach 67 years of age, provided they have made contributions for at least 20 years. (Anyone who has made less than 20 years of contributions may still receive a pension, but at a lower rate, depending on their circumstances.)

Italy’s retirement age is not permanently fixed — it’s pegged to average life expectancy and re-evaluated every two years, so it may be different by the time you retire.

READ ALSO: Pensions in the EU: What you need to know if you’re moving country

When you apply for your pension, your annual pension amount will be calculated based on your and your employers’ total contributions over the course of your working life, adjusted according to some other variables.

First, your total contributions are adjusted to match the country’s rate of growth in gross domestic product (GDP) since you started making contributions. In the last 10 years, that’s been an average of about one percent — still lagging quite far behind the average rate of inflation.

But that’s not all. Some of your pension — though, if you receive a substantial amount, not all — will also be adjusted to take into account changes to the cost of living.

Finally, your annual payout will also be adjusted by what’s called a “transformation coefficient”. This formula takes into account your likelihood of death, whether or not you will leave behind a spouse, and whether or not you have children.

The transformation coefficient means that what age you retire can have a big impact on your annual payout. If you retire relatively young — say, right at 67 — you will be assumed to be cashing your pension for about 18 years. That means you’ll be paid around 5.5 percent of your contributions each year. If you wait until you’re 71, that amount is more like 6.5 percent. Delaying retirement will increase your payout, and it’s possible to defer retirement as long as you like.

When you do receive your pension, it will be paid out, like your paycheck, 13 times per year

There is a certain minimum monthly entitlement established each year by the Italian government — for 2023, that’s €503.27. 

Photo by Giulia Squillace on Unsplash

If your contributions put you below this amount, or if you are otherwise ineligible for a pension, there is such a thing as old age assistance (assegno sociale), which provides for this minimum amount (and a little extra if you’re over 70 years of age). Eligibility is means-tested, and you can only apply if you’ve resided in Italy for 10 years.

Whatever your pension amount, keep in mind it will be taxed according to normal tax rates — though you won’t need to make social security contributions off the top.

But what if you want to retire early? Italy’s state pension system allows for a number of exceptions to the retirement age through an ever-changing array of schemes.

Currently, if you’ve contributed enough that your monthly pension amount is calculated to be 2.8 times the government minimum, you can take retirement as much as three years early.

Alternatively, if you’ve already made contributions for 41 years and 10 months as a woman, or 42 years and 10 months as a man, or if you’ve been made redundant, work as a caregiver, or work in certain industries deemed arduous, you can retire even if you haven’t yet reached retirement age, under certain conditions.

READ ALSO: From visas to language: What Americans can expect when retiring in Italy

Another early retirement scheme, known as the Opzione Donna, allows working women to retire as early as 60, if they have made 35 years of contributions. If you have a child, you can retire even earlier, at 59. Two children, and you can retire at 58.

Because many of these schemes are temporary and the Italian state pension system is constantly being reformed, you may want to review the INPS website to be sure of what programs are available, and your eligibility for them.

Professional and private pensions

Much less common in Italy, but still occasionally a factor, are professional and private pension funds.

Professional pensions are pension funds organized by a union or professional association — if you are eligible for one, your employer should make this known to you and provide you the option of joining.

Generally, these funds allocate payments that would otherwise go towards a severance fund and invest it for retirement. Known in Italian as fondi pensione chiusi or “closed” pension funds, they are much less common in Italy than in countries like the US and Canada.

Private pensions are pension funds offered through banks, insurance companies, and other private providers, known in Italian as a piano individuale pensionistico (“individual pension plan”, PIP) or fondi pensione aperto (“open pension fund”, FPA). 

Though these schemes are often a necessary alternative for self-employed workers, some analysts say they frequently offer worse returns and flexibility than simply investing your retirement savings.

If you choose to pursue a private pension fund option, it may be a good idea to consult a commercialista or other financial expert to ensure you are getting your money’s worth.

What about my contributions in other countries?

If you’ve contributed to a public pension scheme in another country for part of your working life, the good news is that this money could still be of use to you.

Italy has signed a number of bilateral agreements and treaties that mean those contributions can more often than not count toward your Italian pension amount.

Any contributions made within the European Union are guaranteed to be included in your calculations, and Italy has bilateral agreements with Canada, the US, and Australia too.

READ ALSO: What to know about Italy’s flat tax offer for pensioners

One glaring absence is the United Kingdom, which lost its agreement with Brexit. Instead, you may be able to consolidate your pension amounts using a British Qualified Recognized Overseas Pension Scheme (QROPS), which allows for the transfer of UK pension amounts abroad under different rules.

Keep in mind that pension payments are often taxed at higher rates if you are a non-resident — so consolidating your pension payments could help save you a lot of cash.

Please note that The Local cannot advise on individual cases. For more information about how Italy’s pension rules may apply in your circumstances, consult an Italian commercialista or another qualified tax professional.