Money in Italy: Cards, Cash, Tipping and Tourist Taxes

Cards can cover much of a trip to Italy, but a small cash reserve still makes travelling easier. Look beyond the exchange rate: ATM charges, accommodation taxes and VAT-refund fees can all affect what you actually spend.

Lake Santa Croce, Italy · packing4two

Euros and everyday denominations

Italy uses the euro (€; EUR), divided into 100 cents. Coins come in 1, 2, 5, 10, 20 and 50 cents, plus €1 and €2. Euro coins from other euro-area countries work here too.

Current banknotes are €5, €10, €20, €50, €100 and €200. The old €500 remains legal tender but is no longer issued. Small notes are more convenient for everyday purchases; avoid relying on a large note to pay for a coffee.

Can you travel cash-free?

Cards are accepted by many hotels, shops and restaurants, but acceptance varies by business and card network. Visa and Mastercard are useful options. A phone wallet still needs a supported card and a compatible terminal.

Our practical suggestion is to carry a modest backup, not a large holiday budget in cash. For an urban family trip, €50–€100 can be a starting reserve, adjusted to your plans. Keep some smaller notes and coins for minor expenses or terminal failures. Ask rural accommodation about payment before arrival, and carry a physical card as well as your phone.

Choose the currency deliberately

A terminal or ATM may offer to charge your home currency instead of EUR. This is Dynamic Currency Conversion: the operator sets the displayed conversion terms. Paying in euros leaves conversion to your card issuer. Compare your issuer’s charges with the offered conversion before accepting.

An ATM operator fee and your own bank’s withdrawal fee are separate from currency conversion. Declining DCC does not necessarily remove either charge. Read the final confirmation screen, shield your PIN and avoid unsolicited help. At an exchange office, compare the euros you receive after all fees, not just the advertised rate.

Paying for taxis

In the Freenow app, add a payment method in the wallet and select it before requesting your taxi. Check the methods available for your account and location rather than assuming every wallet works everywhere.

For a taxi taken at a rank, confirm card payment before departure. In an app, check whether the fare is fixed or estimated and whether booking fees apply. If app payment is selected, clarify any request to pay the driver separately so you are not charged twice.

Tips and restaurant extras

Tipping is optional. Rounding up a café or taxi bill is one way to thank someone; a restaurant tip of roughly 5%–10% can be a generous choice rather than an automatic obligation.

Check the menu and bill for Coperto, a cover charge, and Servizio, a service charge. Neither is a voluntary tip. Ask about unclear extras before ordering, and check whether sitting at a table costs more than ordering at the bar.

Is tax included in displayed prices?

Consumer prices should clearly show the total including taxes and compulsory charges. Do not automatically add sales tax at checkout as you might in some North American destinations.

Italian VAT is called IVA. The standard rate is 22%, but reduced rates and other treatments apply. As a calculation example, a €122 item taxed at 22% contains €100 before VAT and €22 VAT: the tax is not 22% of the final €122.

Accommodation tax

Some cities charge a separate accommodation tax, with rules based on factors such as property type, guest age and nights stayed. It may be collected at the property even when the booking was prepaid. Check what your reservation already includes and request a clear breakdown; there is no single Italian city-tax rate.

A local accommodation tax is different from VAT and is not the shopping refund described below. Compare the full stay cost, not just the headline room price.

Claiming a shopping VAT refund

Non-EU residents may qualify for a refund on personal or family goods taken out in their luggage. In Italy each invoice must exceed €70 including VAT: at least €70.01. Ask the shop for Tax Free paperwork with your passport details. Export must occur by the end of the third month after the invoice month, with customs validation.

Keep goods accessible and ask where validation takes place before checking luggage. If you leave the EU through another member state, check the final-exit procedure and how through-checked bags are handled. Customs validation is not itself a payment: follow the retailer’s or refund operator’s process. Fees can reduce the refund. Accommodation, services and goods consumed during the trip are not exported shopping.

Compare the complete trip cost

Compare cancellation, breakfast, local taxes and transport costs when choosing accommodation. We stayed at Mercure Roma Piazza Bologna in Rome and recommend it. Check the current offer for your own dates; our stay does not guarantee today’s price or conditions.

We stayed at Mercure Roma Piazza Bologna and recommend it. Check room arrangements and the complete price for your dates. Check the hotel