With the new income tax brackets, here’s how much a pensioner with a gross pension of 2,400 euros could save

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With the new income tax brackets, here’s how much a pensioner with a gross pension of 2,400 euros could save

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By the end of March, many retirees will be able to look forward to a richer pension, thanks to two interesting innovations that will come into effect with the March check. The two modifications concern the adjustment of the amount to the increase in the cost of living and the effects of the new tranches. In particular, this latest change will have significant effects on all social security controls. Many will benefit from the new IRPEF.

Surely everyone will enjoy the benefits of equalization, or adjusting the retirement allowance for inflation. The INPS has established that this adjustment should be 1.7%. However, the Government has determined that the revaluation will be total, that is to say 100% only for checks up to a certain amount. For higher amounts, the adjustment will be equal to 90% and 75% of the 1.7% revaluation. However, thanks to equalization, some pensioners will see the richest allowance even up to 347 euros.

The new finance law has also brought new features for the wealthiest pensioners. Indeed, a solidarity contribution weighed on checks for an annual amount greater than 100,000 euros gross. The solidarity contribution can reach 40% of the annual amount of the pension. The government canceled this rule as of January 1, 2022.

With the new income tax brackets, here’s how much a pensioner with a gross pension of 2,400 euros could save

In addition, Budget Law 234/2021 introduced new brackets for labor income as well as for pensions. With new brackets, gross annual income up to 15,000 euros will have a tax rate of 23%. Those over 15,000 euros and up to 28,000 euros will have a rate of 28%. Income above €28,000 and up to €50,000 will have a tax rate of 35% and those above €50,000 a tax of 43%.

To better understand what can happen, let’s simulate a gross pension of 2,400 euros per month. By applying the old tranches, the IRPEF would amount to 605 euros. The tax would be €287 up to €1,250 and €292 for the part between €1,250 and €2,333.33. The tax would be approximately 25 euros for the amount exceeding 2,333.33 euros.

Applying the calculation to the new installments, the three amounts will be €287, €271 and €23, making a total of €581. The monthly IRPEF is reduced by 24 euros, which for 12 months becomes a figure equal to approximately 288/290 euros.

With the new income tax brackets, only annual pensions up to 15,000 euros will have no economic benefit. Instead, those up to 30,000 euros will be able to take advantage of a discount of just over 300 euros. A gross annual pension of 40,000 euros will save an average of 600 euros compared to the previous tranches, a pension above 50,000 euros will save around 900 euros. For gross annual allowances above €70,000, the saving will be around €370.

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