Italy flat-rate tax regime: how much do you actually keep?
The Italian forfettario is often presented as the ideal solution for self-employed workers. But between substitute tax and INPS contributions, how much do you actually take home from €35,000 in revenue? This guide does the maths honestly.
What is the forfettario regime?
The flat-rate regime (L. 190/2014) is available to self-employed workers with annual revenues up to €85,000. Instead of calculating actual expenses, the law applies a fixed percentage — the profitability coefficient — to revenue to determine taxable income.
Why it is called 'flat-rate': Expenses are not actually deducted — they are assumed by the percentage that is not taxed. If the coefficient is 78%, the law presumes 22% of revenue goes to costs. If your real expenses are higher, the standard regime may be more advantageous.
Profitability coefficients by sector
| Sector | Examples | Coeff. |
|---|---|---|
| Professional and technical activities | Lawyers, engineers, accountants, psychologists | 78% |
| IT and communication services | Developers, designers, web designers, copywriters | 67% |
| Crafts and construction | Plumbers, electricians, carpenters, hairdressers | 86% |
| Wholesale and retail trade | Physical shops, e-commerce, resellers | 40% |
| Accommodation and food services | Restaurants, bars, B&Bs, catering | 40% |
| Transport and other services | Couriers, rental, cleaning, gardening | 67% |
The substitute tax: 15% or 5%?
5% — New business
For the first 5 years of a new activity, if you have not carried out a similar activity in the previous 3 years.
15% — Standard rate
The standard rate for those not in the startup phase or who have completed their 5 favourable years.
⚠ Important: The substitute tax replaces IRPEF, IRAP and local surtaxes, but does NOT replace INPS contributions — which are always due on top.
INPS contributions: the minimum makes the difference
The substitute tax does not include INPS contributions, which are always added and are often the heaviest item. How they are calculated depends on your social-security scheme.
Gestione Separata (professionals without a fund)
26.07% of taxable income, with no fixed minimum contributions: you pay a pure percentage of what you earn. Earn little, pay little.
Artisans and traders
They work with a minimum (minimale): up to €18,808 of income (2026) you pay a fixed contribution of about €4,500/year regardless; above the minimum you add 24% (artisans) or 24.48% (traders) on the excess. Forfettari can request a 35% reduction.
Professional funds (lawyers, doctors, engineers...)
Those with a category fund pay under their fund's rules, not to INPS.
Contributions paid are deductible from income before the substitute tax is calculated — the calculator already does this.
Real comparison: three profiles at €35,000 revenue
Web developer (new business, 5% rate)Most favourable
Business consultant (standard 15% rate)
Plumber / craftsperson (standard 15% rate)
Forfettario or the standard regime?
The forfettario is not always the best choice. The key point: under the forfettario expenses are NOT deducted one by one — they are already 'discounted' by the profitability coefficient. So it suits you if your real costs are low. If instead you have many expenses with VAT (equipment, stock, collaborators) or mainly invoice businesses that would reclaim VAT, the standard regime — which lets you deduct actual costs and reclaim VAT — may be more advantageous. The forfettario also does not allow IRPEF deductions (home renovations, medical expenses, etc.): if you have many and no other income to use them against, that is worth weighing.
Eligibility and exit rules
To enter and stay in the forfettario you must meet a few limits, checked on the previous year:
- ✓Revenue or fees not exceeding €85,000 in the previous year.
- ✓Spending on employees and collaborators not exceeding €20,000.
- ✓No employment or pension income above €35,000 in the previous year (irrelevant if the job has ended).
- ✓No controlling stake in companies carrying out the same activity, nor shares in partnerships.
If you exceed the threshold during the year: Up to €85,000 you stay in the regime. Between €85,000 and €100,000 you leave from the following year. Above €100,000 the exit is immediate: you must charge VAT from the invoice that crosses the threshold.
Frequently asked questions
Is the forfettario better than being an employee?
It depends on revenue, expenses and sector. A consultant with €40,000 revenue and low costs under forfettario can have a similar or higher net than an employee with a €35,000 RAL. But self-employment carries market risk, no TFR, no employer-side contributions.
Can I have a VAT number alongside employment?
Yes, with some restrictions. You cannot use the forfettario if an employer (or former employer in the past 2 years) accounts for more than 50% of your revenue.
What happens if I exceed €85,000 revenue?
Exceeding the threshold during the year does not trigger an immediate exit. However, from 1 January of the following year you automatically switch to the standard regime. If you exceed €100,000 in a single year, you exit immediately.
Calculate your flat-rate net income
Enter your expected revenue, ATECO category and INPS scheme — get annual and monthly net income with a detailed breakdown.
Open the flat-rate calculator →