# TFR - trattamento di fine rapporto



## Sierra

Does anyone know if there is an equivalent term in English for the "trattamento fine rapporto" - TFR? The amount of money that an employer holds until you leave the company. It's not a redundancy pay-out, you'll get it even if you resign voluntarily. Thanks!!


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## DDT

Sierra said:
			
		

> Does anyone know if there is an equivalent term in English for the "trattamento fine rapporto" - TFR? The amount of money that an employer holds until you leave the company. It's not a redundancy pay-out, you'll get it even if you resign voluntarily. Thanks!!



I'd suggest "severance pay"

DDT


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## DesertCat

In the US, severence pay is optional in most cases.  However, you are entitled to any vacation (or other comp time) allocated.  There is probably a more official accounting term for this but I don't know what it is.


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## Sierra

Thanks for your input!

I don't know if it's "severance pay" which is usually the term used if the contract is terminated by the employer (i.e. they make you redundant or fire you).  However the TFR is a percentage of your salary the employer has been with-holding, which will be given to you when you leave the company in whatever way (I got this when I resigned from my company in Milan, but there was no such thing when I left my workplace in London).  I was thinking "end-of-service pay-out" but that seems so cumbersome, though more accurate.


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## Panpan

A discretionary bonus on retirement or voluntary severance is sometimes known as a 'golden handshake'.

Pension schemes here often pay a lump sum on retirement, which is just refered to as 'the lump sum paid on pesionable retirement', or just 'the lump sum'.

Hope that helps

Panpan


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## lsp

Sierra said:
			
		

> Thanks for your input!
> 
> I don't know if it's "severance pay" which is usually the term used if the contract is terminated by the employer (i.e. they make you redundant or fire you).  However the TFR is a percentage of your salary the employer has been with-holding, which will be given to you when you leave the company in whatever way (I got this when I resigned from my company in Milan, but there was no such thing when I left my workplace in London).  I was thinking "end-of-service pay-out" but that seems so cumbersome, though more accurate.


In the US we don't have it (I got it from the company I worked for in Rome). It is neither severance nor pension.


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## elifer84

It is "severance indemnity", according to the EU Financial Statements scheme.


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## furs

Severance pay is routinely used as the standard translation for TFR, at least in an AE context.


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## Memimao

TFR is actually "deferred salary". It is paid out by the company and set aside for the employee to be collected when terminating employment.


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## tee_luna

401k? (ae)


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## Memimao

tee_luna said:


> 401k? (ae)


 
No, I don't think so. 401k, if I recall correctly was part of ERISA (Employee Retirement Income Security Act, again if I recall correctly) The issue in Italy at present is to turn what has been to date a deferred compensation into a 401k type programme _for the future._ In other words, use the "severance benefit" to start accruing a reitirement income henceforward. 

I am more than open to corrrection on this though.


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## tee_luna

T=trattamento
F=fine
R=rapporto

Right now, by law, workers are required to choose where to put their TFR. There has always been a TFR, which was (up untill now) kept by the employer and given when the worker left his job (to retire or to work elsewhere). Right now, since INPS is about to go bankrupt, emplyees are "forced" to choose secondary and private retirement funds.

Hence why my choice was 401K. Problem is, in the US (like soon in Italy) there is no 401K guaranteed to all workers and 401K is but one of the many retirement plans options.


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## Wendell Murray

There is no direct equivalent in USA employment to "TFR". "Severance pay" is more or less correct as a translation even if it is not exactly equivalent. Conceptually it is the same in any case.

"401(k)" is a section of the USA tax code that permits individuals to exclude a certain percentage (up to a limit that increases from year to year) of their pre-tax pay from current federal income taxation. That amount goes into a "401(k)" retirement account. The idea of the law is to encourage workers to set aside money for retirement.

I have not followed the discussion in Italy regarding pensions, but I assume from one person's comment that the idea of "rolling over" a "TFR" into a pension account, presumably before taxation, is a part of that discussion.


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## Franki23

Hello all,
Is the TFR at charge of the employee? the company? Who, at the end of the day, pays the TFR?
Does it appear as with-held on the employees paycheck?
Thanks


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## furs

The TFR is legally part of the salary, so at the end of day, it's the employer who pays.


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## whi

Al momento non c'è equivalente in inglese per TFR. Come sempre il traduttore deve spiegarlo. La gloriosa "buonuscita" è solo un_ risparmio forzoso_.
Nelle nuove proposte di mobilità si sta discutendo di introdurre anche in Italia quello che è la "_severance pay_" o "_golden handshake_" che si possono tradurre con:
_"indennità di licenziamento_".


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## krissmix

Salve a tutti,

non so se potrebbe essere utile in altri paesi ma qui nelle Filippine il TFR e` equivalente a "separation pay" che viene consegnata a fine rapporto.  Gli impiegati ne hanno diritto se licenziati dopo almeno un anno intero di lavoro e viene calcolata come segue: 1/2 mese di paga (minimo per legge) x n. di anni di servizio.


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## Teerex51

Again, the TFR is not the same thing, as earlier posts clearly showed. You are entitled to it (obviously in amounts proportional to your length of service) even if you quit after three months.


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## k in the desert

Just a note to help clarify severance pay or the golden handshake and 401k plans in the U.S. –
Severance pay is not required by law.  Only workers with a severance clause in their contract or who have a specific arrangement with their employer are entitled to severance pay when the employee loses his job or leaves his post of his own accord.  The severance money is not deducted from previous earnings.  It is not deferred compensation as is the TFR.
The 401k plan is a type of deferred compensation, but it is for retirement and so also has nothing to do with the TFR.


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## krissmix

Oh I see, thanks for the info Teerex51!
I didn't know that employees are entitled to it even after a short period of three months work.   
Then again, it might be due to the different labor laws.  Here in the PI you only become a regular employee after a six months probationary period.
I've never been employed in Italy as I moved and lived abroad since college.


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## chipulukusu

Franki23 said:


> Hello all,
> Is the TFR at charge of the employee? the company? Who, at the end of the day, pays the TFR?
> Does it appear as with-held on the employees paycheck?
> Thanks



This is an interesting question.TFR traditionally was seen as a sort of cheap financing method for a company. The yearly rate of revaluation on the sums deducted from pay-checks and accumulated by the company was far less than any other form of financing in Italy's undercapitalized business environment.
This was the official reason (seeking better yields for workers and creating a more robust financial market) which led to a reform forcing companies, under workers' discretion, to pay off this sums to a private or public pension scheme, instead of posting them among their liabilities.
I am sorry for being wordy, but I believe that this may help our native friends to tell us if there is anything similar in their own country.


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## london calling

furs said:


> #18 - for the record, your proposed translation of TFR as 'redundancy pay' is not correct.


Concordo. Come già detto, non abbiamo un equivalente (almeno in GB). 

PS. Io personalmente faccio versare la quota mensile del TFR che mi spetta in un fondo di categoria.


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## laura_75

Se può essere utile, nelle ns riclassificazioni di bilancio, il Fondo TFR è tradotto in Inglese con DWF = Deferred Wage Fund


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## Teerex51

laura_75 said:


> ...nelle ns riclassificazioni di bilancio, il Fondo TFR è tradotto in Inglese con DWF = Deferred Wage Fund


It may be a convenient translation but I'm not sure about its accuracy. 
After some snooping around, I've realized that the so-called DWF only exists in Taiwan as part of the local welfare system. It's a sort of insurance fund against a worker's loss of wages due to employer insolvency—a different animal altogether.

As stated earlier in this thread, no equivalent system is in place in English-speaking countries. Therefore no set translation exists, but many attempts have been made at rendering it into English. Some of such translations are just plain wrong, others come close to describing the meaning of TFR, such as—for example—_severance indemnity. _


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## quotty

Hi,
my try: "Employee Severance Indemnity" = TRATTAMENTO DI FINE RAPPORTO DI LAVORO SUSORDINATO.
Christina


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## Einstein

quotty said:


> Hi,
> my try: "Employee Severance Indemnity" = TRATTAMENTO DI FINE RAPPORTO DI LAVORO SUBORDINATO.
> Christina


Yes, you can add "employee" if you want. It doesn't add anything to the meaning (because TFR is only for employees), but it might make it clearer for people where TFR doesn't exist.


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## london calling

Teerex51 said:


> As stated earlier in this thread, no equivalent system is in place in English-speaking countries. Therefore no set translation exists, but many attempts have been made at rendering it into English. Some of such translations are just plain wrong, *others come close to describing the meaning of TFR, such as—for example—*_*severance indemnity*. _



I agree with this, personally.


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## chipulukusu

As an additional contribution, after frustrating attempts at finding a suitable generally acceptable term, I opted for a generic _post-employment benefit. _Not that I am particularly proud of this, but sometimes you just have to find a way to go ahead with your work.


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## Teerex51

Personally, I have a problem with the word "benefit". Italy's TFR is _not_ a benefit but a form of deferred compensation.

Also, according to International Accounting Standard 19, "post-employment benefits" have very little to do with the concept behind TFR.


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## chipulukusu

Teerex51 said:


> Personally, I have a problem with the word "benefit". Italy's TFR is _not_ a benefit but a form of deferred compensation.
> 
> Also, according to International Accounting Standard 19, "post-employment benefits" have very little to do with the concept behind TFR.


Thank you TRex, I already amended where I still could. I'll go for _severance indemnity _or _staff severance pay,_ according to the context.
Tax and accounting is a depressing sector to work in in Italy, but at least you don't feel the cold wind of globalisation in the neck!


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## Teerex51

Come to think of it, you could go with _[Statutory] Deferred Compensation Plan_. 

This would dispel the following misconceptions:

that it's due as some form of redress in case of dismissal (while, in fact, it's part of your own salary)
that it's a form of severance pay, which is actually closer to Italy's "preavviso"


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## chipulukusu

Teerex51 said:


> Come to think of it, you could go with _[Statutory] Deferred Compensation Plan_.



Thank you TRex I think this is great. It would be good if this came in use against less proper terminology that is currently adopted.


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## Teerex51

chipulukusu said:


> It would be good if this came in use against less proper terminology that is currently adopted.



Yeah, well. Let's not hold our breath. Slipshod translations are here to stay. A few days back, ANSA (Italy's leading news agency) translated _bigotry_ with _bigottismo_. I rest my case.


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## chipulukusu

Teerex51 said:


> Yeah, well. Let's not hold our breath. Slipshod translations are here to stay. A few days back, ANSA (Italy's leading news agency) translated _bigotry_ with _bigottismo_. I rest my case.


This is food for our _false_ _friend_ thread!


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## Benzene

_Our multinational company, where I work, uses “Staff Leaving Indemnities" for "trattamento di fine rapporto di lavoro subordinato".

Expression above is valid only for employees who work in accordance/compliance with Italian collective bargaining agreement. 

What do you think about?

Bye,
_
*Benzene*


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## chipulukusu

Benzene said:


> _Our multinational company, where I work, uses “Staff Leaving Indemnities" for "trattamento di fine rapporto di lavoro subordinato".
> 
> Expression above is valid only for employees who work in accordance/compliance with Italian collective bargaining agreement.
> 
> What do you think about?
> 
> Bye,
> _
> *Benzene*


Hi Benzene, I think it is not bad but, as TRex pointed out, the problem is that an indemnity is something which compensate the loss of some other thing. T.F.R. instead is a deferred pay not an indemnity in this sense.
By the way, if I'm not mistaken, it is not collective agreements that regulate T.F.R. but the law itself (the _Codice Civile_). Though I am a strenuous defender of the T.F.R. as it is, I must admit that it reveals a historically paternalistic approach to the problem of termination of employment, as the workers were not deemed as capable of planning for their own retirement or out-of-employment periods. As in many other aspects, anglophone countries have an approach that relies more on individual responsibility.


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## Benzene

*Hi chipulukusu!*
_
Tanks for your detailed explanation!

Bye,
_
*Benzene*


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## london calling

Benzene said:


> _Our multinational company, where I work, uses “Staff Leaving Indemnities" for "trattamento di fine rapporto di lavoro subordinato"._


Sounds like an attempt at translation (which doesn't really work....)


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## david1985

it all depends on how the word can be used:

severance pay might be the right translation for "trattamento di fine rapporto" even though the modalities are different

according to the income statement, under " PRODUCTION COSTS", it's " employee benefit"


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## Memimao

Employee benefit covers a lot more (accident insurance, medical, club memberships etc., etc.). The TFR is actually "statutory" and so not deemed to be a "benefit".


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## chipulukusu

Memimao said:


> Employee benefit covers a lot more (accident insurance, medical, club memberships etc., etc.). The TFR is actually "statutory" and so not deemed to be a "benefit".


This is exactly the point, T.F.R. is not a benefit, is deferred compensation.
What makes difficult to find the right translation is the fact that in the English speaking world deferred compensation is mainly contractual and aimed at tax planning purposes, while in Italy it is law enforced and aimed mainly at social security purposes.
It is normal that an higly paid individual with no expectation to spend all his accrued income in the period  can find convenient to have part of its earnings paid at a later stage instead of having all the sum taxed immediately. This is why deferred compensation plans are all but unusual in the anglophone countries, but they are predominantly contractual agreements that benefit both parties.
This also explains how a government with a caring eye for its citizens tend to enforce or incourage these schemes, while a government in dire need of money is likely to encorauge for all the wages to be paid (and taxed) straightaway.


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## david1985

you are right... in fact employee gathers different meanings. I have just asked to an expert, saying that " TFR", according to an accounting position, is named as " accrued severance".


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## Teerex51

david1985 said:


> I have just asked *to* an expert, *who says* saying that " TFR", according to an accounting position *[sic]*, is *called *named as " accrued severance".


An expert's opinion and one Euro will buy you a cup of _espresso_. 
_Accrued severance_ doesn't quite cut it. In English, it implies its funding comes from someone other than the employee (most likely an insurance company or a fund of some sort). That's why _accrued severance_ is misleading, although some
(Italian) authors use it for lack of a more exact translation.

TFR is a unique Italian construct. It's not a benefit, nor is it an indemnity—seeing as how it's part of an employee's wages. Chip's post above (#41) describes it clearly and I agree with the translation _deferred compensation_, which I actually came up with last January (see post #31) and Chip seems to have endorsed.


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## david1985

Thanks for the further explanation Teerex51.... I think I have been involved in something bigger than my modest capacity.... As you said before, there isn't a specific translation for TFR, but, according to the inernational accounting companies, the word "accrued severance" is the only way to translate the italian TFR to something similar in english. Or, at least, that's the word which it has been used to compare the italian income statement with the english one. But this is just a word of mouth's opinion which come from a trustworthy friend.. or maybe she is trying to fool with me!!!


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## Teerex51

david1985 said:


> or maybe she is trying to fool with me!!!


Hi David, I wouldn't go as far as suggesting that. 
I'm convinced that most proposed translations are in good faith. The error lies in seeking an established equivalent in the Anglosphere, when there is none. My suggestion is to _explain the concept_ as concisely as possible (_[Statutory] Deferred Compensation Plan _is an honest attempt at doing so) rather than looking for the magic word that we know just isn't there...


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## david1985

Hi Teerex....honestly I'm glad to have this kind of discussion because it's the better way (for me) to understand the right approach for an appropriate translation, so be free to give me all the possible explanations.... you are gonna be my key figure


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## Teerex51

david1985 said:


> .... you are gonna be my key figure


You couldn't have made a worse choice, pal.  No, seriously. This Forum will often be a source of priceless information, but it's still up to you to pick the wheat from the chaff—as the expression goes.
The good news is, there are a number of reliable, knowledgeable contributors on the WRF who will not steer you wrong. It's your job to tell them apart from the _wannabes_...


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## david1985

Are you the wheat or the chaff???? Really, any kind of information is good to broaden your mind... and as you have just said, it's up to you to take the right choice.... but in any case all the suggestions are really welcome.... thanks again


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## Andrea PC

TFR for a company and for a worker is suspendend/deferred salary !!!
TFR is paid always at the end of the job, be it caused by worker or the boss or the retirement. TFR must be paid by the boss within 60 days from the end of the job. It must be paid for any period of work, such as 1 day or 35 years. TFR is "related" to the montly italian salary, in principle we can quantify to a monthly salary for each year of job. The TFR has a yearly financial appreciation, that it is a %  of the goods revalutation price. A worker can ask for an advance payment of a part of TFR only if he has a very important justification.
Seeing it from company side, the Italian TFR is an self-financing instrument. The company can financinng itself using the money of the workers. The company must to book the TFR in the balance financial statement, but it is not mandatory to have the corresponding money in bank. So... it is a self-financing instrument 

*Any other solution are wrong, it is not an indennity, it doesn't metter with pension or any other additional pension or riterement. It doesn't metter with the cause of the job ending (by worker or by boss). It is only what I have wrote.*

Sorry for my english


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## King Crimson

Andrea PC said:


> TFR for a company and for a worker is suspendend/deferred salary !!!



Which is precisely what other posters already said (see for example post #43).
And please note that screaming "*Any other solution are wrong" *or* "It is only what I have wrote" *isn't probably the best way to endear yourself to other fellow users. At least not here on WR.


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## Andrea PC

King Crimson said:


> Which is precisely what other posters already said (see for example post #43).
> And please note that screaming "*Any other solution are wrong" *or* "It is only what I have wrote" *isn't probably the best way to endear yourself to other fellow users. At least not here on WR.



TFR is my job because i'm accounting. Other solution different from mine are wrong. Please take my assertion as it is. You can share or not... But please, if you don't share it, let me know why?


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## King Crimson

I say it again and hope to be clearer now: have you read the rest of this long thread (including my previous post)? Have you realized that your suggestion is not "new" and has already been made long ago?


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## MR1492

AndreaPC,

I agree with King Crimson.  While your answer may be 100 percent correct, your attitude is 100 percent wrong.  This is not a political or debate forum but is a translation forum.  You can make your point without being disagreeable or confrontational.  Remember, you don't have to write in English.  If you feel more comfortable expressing things in Italian, that is perfectly acceptable.

You have made your point so there is no reason to be antagonistic towards our moderators or your fellow forum members.

Phil


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