The same work, done by the same person with the same take-home pay, can cost a company 34.5% to 88% more. It depends on how it pays, and on how much. A €30,000 invoice from a contractor on Italy’s flat-rate regime (the forfettario), turned into a salary with the same take-home pay, becomes a company cost of €40,362. An €85,000 invoice, the ceiling of the regime, becomes one of €159,758.
It is the calculation I did in September on a consulting job, for a company that is considering moving a few flat-rate contractors onto the payroll. 2026 parameters, and one reference contractor: a professional registered with the INPS Gestione Separata, 5% tax, 78% profitability coefficient. I took that 78% as the reference. It changes with the ATECO activity code (from 40% for retail and food service to 86% for construction and real estate): with another coefficient the whole table changes.
What does it cost to move a contractor from the flat-rate regime onto the payroll?
| Invoice today | Take-home pay | Gross salary at equal take-home | Company cost | Increase |
|---|---|---|---|---|
| 30,000 | 23,035 | 29,395 | 40,362 | +34.5% |
| 40,000 | 30,713 | 46,338 | 63,626 | +59.1% |
| 50,000 | 38,391 | 61,644 | 84,644 | +69.3% |
| 60,000 | 46,069 | 77,274 | 106,105 | +76.8% |
| 70,000 | 53,747 | 92,904 | 127,566 | +82.2% |
| 85,000 | 65,265 | 116,348 | 159,758 | +88.0% |
In the first two rows the employee tax credits in article 13 of the Italian income tax code matter; in the first row also the €1,000 that the 2025 budget law adds between €20,000 and €32,000 of income (it falls to zero at €40,000). With the credits, the gross salary that matches a take-home pay of €23,035 is €29,395, even less than the invoice.
With higher invoices the increase grows, because the flat-rate contractor pays a flat tax and the salary does not. The gross salary that matches their take-home pay climbs into the income-tax brackets, 33% above €28,000 of income and 43% above €50,000, where the credits disappear too. Above €56,224 of pay one extra point of contributions is added.
How much does a flat-rate contractor actually keep?
76.8% of what they invoice. Contributions are calculated on the flat-rate income, which is 78% of the invoice, and for those without a professional fund of their own they go to the INPS Gestione Separata at 26.07% (INPS circular 8/2026). The 5% tax is paid on what is left. On €30,000 that makes €6,100 of INPS and €865 of tax, leaving €23,035 in their pocket.
The 5% applies for the first five years of activity and only with certain requirements. At the ordinary 15% rate the net share falls to 71.0% and the range narrows, from 21.7% in the first row to 71.8% in the last.
Adding up the two rates, 5% and 26%, as if both hit the whole invoice, gets it wrong on the high side. The contractor seems to lose 31% instead of 23.2%, and matching their take-home pay seems to cost less than it does.
What does an employee cost the company, on top of the gross salary?
A gross annual salary (the RAL, the figure on the contract) of €30,000 costs the company €41,193, 37.3% more: €9,000 of employer contributions, €2,073 of TFR, the Italian statutory severance accrual, and €120 of INAIL, the workplace-injury premium.
Contributions at 30% and INAIL at 0.4% are budget assumptions, which change with the collective agreement and the risk class: the labour consultant confirms them. The TFR follows the law. It is the salary divided by 13.5 (article 2120 of the civil code), minus the 0.50% the employer pays to INPS, about 6.91% of the gross salary. Regional and municipal surcharges (2.3% in my calculation model) are paid by the worker, so they are not in the company cost, but they decide how much gross salary it takes to match the take-home pay.
Today, in companies with fewer than 50 employees, if the worker does not send it to a pension fund, the TFR stays on the balance sheet as a liability towards them. If the company is sold one day, the buyer counts it as cash that will have to leave, one of the items people fight over when they talk about net financial position.
At the same take-home pay, what does the employee get on top?
The same take-home pay does not mean the same deal, and this is where a real conversion gets negotiated. The TFR is deferred pay and goes to the person: about €2,000 a year in the first row of the table, about €8,000 in the last. Then there are paid holidays, at least four weeks a year by law, which the contractor pays for themselves by not invoicing. And pension contributions, which for the employee are calculated on the whole salary.
That is why the increase in the table is the ceiling of the conversion, not its price. A slightly lower take-home pay, with TFR, holidays and pension included, can be worth as much to the person as the old one, and how much lower is for the negotiation to decide.
What is in the cost of a person that is not the payslip?
If hiring requires a new company, the structure costs money even when it is empty. In the model, incorporation and payroll setup come to €4,500 one-off, while accountant, labour consultant, chamber of commerce fee, certified email, digital signature and insurance come to €6,630 a year. These are estimates from 2026 accountants’ price lists.
Then there is the time of whoever coordinates, which nobody puts in the accounts. Going from three people to thirty does not buy ten times the work you had before: you have to change the way that work holds together. That item is not in the model. If anyone has found a serious way to put it into numbers I would like to hear it.
Is a flat-rate contractor better than an employee?
The contractor has hard limits. Whoever goes over €85,000 leaves the regime the following year, whoever goes over €100,000 leaves it at once. You engage them for a skill they already have, and inside your company you do not grow them. And if they work continuously, mainly in person and with methods set by the company, the law applies the rules of employment to them (article 2 of legislative decree 81/2015), and the saving becomes a risk.
The employee costs more, up to almost double near the ceiling of the regime, but you buy what the contractor does not sell: continuity, presence, the chance to train someone. For a project-based skill, paying that extra through the payroll is an expensive way to feel safe.
I have already written that I prefer a junior with outsized AI skills to a senior who has stopped moving, and that the junior costs less. I do not measure that comparison here: the table compares the same take-home pay paid in two ways.
Was the Italian system designed well?
I am left with a question the calculations cannot settle. The same work, with the same take-home pay, costs up to 88% more if you pay it as a salary. I think a gap this obvious sets off market dynamics that end up distorting the market itself.
A company that has to balance a budget has a reason to buy work by invoice even when it needs a person on the team. The professional has a reason to stay under €85,000, by postponing a payment or turning down a job. And whoever hires, trains and offers continuity starts from a higher cost than whoever does not.
I do not have an answer. I have a calculation, and it says that today, near the ceiling of the regime, the form of the contract can weigh on the price of work almost as much as the work itself. Whoever decides on a hire can at least do it knowing that, instead of letting a tax rate choose for them. And if anyone reading writes or studies these rules, I would like to know whether this imbalance is intended or a side effect.
Note: 2026 parameters, verified on 1 September and checked again on 1 October 2026; they change with every budget law. This is management reasoning, not tax or employment advice: on a real case the numbers get redone with your accountant and your labour consultant.
Sources: INPS circular no. 8 of 3 February 2026 for the Gestione Separata; INPS circular no. 6 of 30 January 2026 for the first pensionable earnings band; Chamber of Deputies dossier on the 2026 budget law (Law 199/2025) for the income-tax brackets; Revenue Agency circular 4/E of 16 May 2025 for the employee tax credits; article 13 of the income tax code; Revenue Agency page on the flat-rate regime for thresholds, rates and contributions; annex 2 to Law 145/2018 for the profitability coefficients; article 2120 of the civil code and Law 297/1982, article 3, for the TFR; the same Chamber dossier (pp. 344-345) for the TFR in companies with 50 or more employees; article 10 of legislative decree 66/2003 for paid holidays; article 2 of legislative decree 81/2015 for collaborations organised by the client; calcolonetto.it for the cross-check on company cost; internal calculation model, parameters verified on 1 September 2026, table recalculated on 1 October and 7 October 2026.