Understanding how the revaluation of severance pay (severance pay) is calculated and knowing the updated reference tables for 2024 is essential for all workers. Every month, the useful percentages for the revaluation of severance pay are announced, which is based on a calculation linked to the so-called ‘revaluation coefficient’, consisting of a fixed rate and a
variable rate.
In this guide, we explain how the calculation of severance pay works and we present the updated tables with the coefficients valid from the beginning of the year until June 2024.
How do you reevaluate severance pay every year
TFR is governed by Article 2120 of the Civil Code, which establishes that, in the event of termination of the employment relationship, the worker has the right to severance pay. TFR, also known as liquidation, consists of the sum of the annual provisions of a portion of the salary, revalued periodically and paid
at the end of the employment relationship.
The severance pay is calculated by adding up, for each year of service, a share equal to the annual salary divided by 13.5 (regardless of the number of monthly payments received). The fee is proportionally reduced for fractions of a year, considering fractions of a month equal to or greater than 15 days as a full month
.
TFR is revalued annually through the application of a ‘revaluation coefficient’, a rate that avoids the devaluation of severance pay, adapting it to the trend in the cost of living.
How do you calculate the revaluation of severance pay
The revaluation of severance pay takes place by applying a rate to the accrued annual fee, consisting of:
- A fixed percentage of 1.5%;
- A variable percentage equal to 75% of the increase in the consumer price index for families of workers and employees, ascertained by ISTAT, compared to the month of December of the previous year.
In practice, the higher the cost of living, the more the variable share increases. Otherwise, the severance pay increases less
.
TFR 2024 Revaluation Coefficient
The TFR revaluation coefficient announced in July 2024 is 1.568860%. This coefficient applies to severance pay accrued as of December 31, 2023. The revaluation takes place at the end of each year or at the time of termination of the employment relationship
.
The revaluation coefficient, consisting of a fixed rate (1.5%) and a variable equal to 75% of the ISTAT price index compared to December of the previous year, is updated monthly and published in specific tables.
Example of calculating severance pay
Suppose that a worker received an annual wage of 24,300 euros, with an employment contract that lasted one year (from January 1 to December 31), and that the increase in the ISTAT consumer price index compared to the previous year was 1%.
The calculation will be:
- Annual fee: 24,300/13.5 = 1,800€
- Revaluation: 1,800 x 2.25% [1.5% + 0.75% (1% x 75%)] = 40.50€
- Total severance pay provision: 1,800 + 40.50 = 1,840.50€
From the total annual provision, the INPS contribution (equal to 0.50%) must be subtracted. So: 1,840.50 — 0.50% (9.2025
) = 1,831.2975€
From the gross amount of 1,831,2975€ it will be necessary to subtract the tax to obtain the net amount.
2024 tables for the revaluation of severance pay
Here are the tables with the revaluation coefficients of severance pay updated for 2024:
| Mese | Revaluation coefficient | Istat Index | Annual fixed rate 1.5% | Relationships terminated during the period |
|---|---|---|---|---|
| January 2024 | 0.377313 | 119.3 | equal to 0.125 | Jan 15 — Feb 14 |
| February 2024 | 0.502313 | 119.3 | equal to 0.250 | Feb 15 — Mar 14 |
| March 2024 | 0.690391 | 119.3 | equal to 0.375 | 15 Mar — 14 Apr |
| April 2024 | 0.752313 | 119.3 | equal to 0.500 | 15 April — 14 May |
| May 2024 | 1.003469 | 119.5 | equal to 0.625 | May 15 — Jun 14 |
| June 2024 | 1.128469 | 119.5 | equal to 0.750 | Jun 15 — Jul 14 |
| July 2024 | 1.568860 | 120.0 | equal to 0.875 | 15 Jul — 14 Aug |
These coefficients are essential for calculating the revaluation of severance pay in the event of termination of the employment relationship. TFR is paid in all cases of termination of employment, regardless of the cause (dismissal, voluntary resignation, reaching retirement
age).
Conclusion
The calculation and revaluation of severance pay are crucial aspects for workers. Knowing the coefficients and the updated tables for 2024 allows you to have a clear view of your severance pay. It is important to stay up to date on changes that may affect severance pay and related regulations
.