Understanding the mechanism for calculating the revaluation of severance pay and knowing the reference tables for 2024 is essential for all workers. Every month, the percentages useful for the revaluation of severance pay (severance pay) are announced through a calculation that is based on the ‘revaluation coefficient’, consisting of a fixed rate and a
variable rate.
How do you reevaluate severance pay every year
The severance pay, governed by article 2120 of the Civil Code, consists of the sum of annual provisions of a share of salary, periodically revalued and then paid at the end of the employment relationship. The calculation of severance pay involves the sum, for each year of service, of a share equal to the annual salary divided by 13.5. This share is reduced proportionally for fractions of a year, counting fractions of a month equal to or greater than 15 days as a whole month
.
How is TFR revaluation calculated
The revaluation of severance pay takes place through the application of 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
TFR 2024 Revaluation Coefficient
The TFR revaluation coefficient announced in July, and relating to June 2024, is 1.128469%. The severance pay set aside as of December 31 of each year must be revalued on the basis of this coefficient. The revaluation takes place at the end of each year or at the time of termination of the employment relationship
.
Example of TFR calculation
Let’s assume that a worker received an annual wage of 24,300 euros, that the employment contract lasted exactly one year and that the increase in the ISTAT consumer price index was 1%.
The severance pay will be given by:
- Annual fee: 24,300:13.5 = 1800€
- Revaluation: 1800 x 2.25% [1.5% + 0.75% (1% x 75%)] = 40.50€
- Total severance pay provision: 1800 + 40.50 = 1840.50€
From the total annual provision, the INPS contribution (equal to 0.50%) must be subtracted. So: 1840.50 — 0.50% (9.2025
) = 1,831.2975€
From the gross amount of 1,831,2975€ it will be necessary to subtract the tax to identify the net amount.
Tables 2024 TFR revaluation
Here are the reference tables for calculating the 2024 severance pay revaluation:
| 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 |
We will continue to monitor the price trend and update you on the changes in the severance pay coefficients that will occur in the coming months, reporting the related tables.
Regulatory references
- Civil Code art. 2120 — Discipline of severance treatment
Recall that severance pay is paid in all cases of termination of employment, whatever the reason (individual and collective dismissal, voluntary resignation, reaching retirement age). It is essential to stay updated on legislative news and on adjustments to the revaluation coefficients to ensure proper management of
severance pay.