BTP Net Yield Calculator
Calculator
Net BTP Yield Calculator
Effective yield to maturity, net of the 12.5% substitute tax
Indicative estimate. 12.5% substitute tax on coupons and capital gains of government bonds; any capital loss (purchase above 100) is not taxed. Accrued interest, fees and stamp duty on the securities account are excluded. Always check prices and dates with your broker.
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Net BTP yield calculator: how it works
BTPs (Buoni del Tesoro Poliennali) are Italian fixed-rate government bonds: they pay a half-yearly coupon and at maturity repay the nominal value (100). The yield you actually earn, however, depends on three things: the price at which you buy the bond, the coupon and the taxation. This free tool calculates the effective net yield to maturity of a BTP starting from the figures you find at your broker, applying the 12.5% substitute tax that applies to government bonds.
The calculation runs entirely in your browser. Enter the purchase price (clean price, expressed per 100), the gross annual coupon as a percentage, the years left to maturity and the nominal capital: you get the annual net yield, the net coupons, the capital gain or loss and the total you receive at maturity.
How a BTP's yield is calculated
Two numbers answer different questions:
- Annual net coupon yield: how much the coupons alone return each year relative to the price paid. It is obtained by applying the 12.5% tax to the gross coupon and dividing by the purchase price.
- Effective net yield to maturity: the overall yield that accounts for both the coupons and the capital gain or loss (the difference between the price paid and the redemption at 100), spread over the whole term. It is the most complete number for comparing two bonds.
If you buy below par (price under 100) you make a capital gain at maturity, taxed at 12.5%. If you buy above par (price over 100) you make a capital loss, which is not taxed but reduces the yield.
Worked example
Let's assume a BTP bought at 98.50, with a gross annual coupon of 3.50%, 5 years to maturity and a nominal capital of €10,000:
| Item | Value |
|---|---|
| Capital invested | €9,850.00 |
| Total net coupons (5 years) | €1,531.25 |
| Net capital gain at maturity | €131.25 |
| Total net at maturity | €11,512.50 |
| Annual net coupon yield | 3.11% |
| Effective net yield to maturity | 3.38% |
The values in the example are purely illustrative: for your real case use the bond's up-to-date prices.
How BTPs are taxed
Coupons and capital gains on Italian government bonds are subject to a reduced substitute tax of 12.5%, lower than the 26% that applies to most other financial instruments. The calculation here does not include the accrued interest paid at purchase, the broker's fees or the stamp duty on the securities account (0.2% per year on the value): these are items that vary from bank to bank and that you can check on your statement.
Where to find the price and coupon
The market price (clean price) and the coupon of each BTP are public: you find them on your broker's platform, on the regulated MOT market of Borsa Italiana and on the website of the Ministry of Economy and Finance (Treasury Department). The coupon and the maturity date are set at issue and do not change for the entire life of the bond.
Frequently asked questions
What is the difference between coupon yield and yield to maturity?
The net coupon yield considers only the coupons relative to the price paid. The effective net yield to maturity also adds the capital gain or loss (difference between purchase price and redemption at 100) and is therefore the most complete measure for comparing two bonds.
Why is the BTP price different from 100?
The nominal value, that is how much is repaid at maturity, is always 100. On the market the price rises or falls according to interest rates: when rates rise, bonds already issued tend to trade below 100; when they fall, they may trade above. Buying below par increases the yield, buying above par reduces it.
How are BTPs taxed?
Coupons and capital gains on Italian government bonds are subject to the 12.5% substitute tax, lower than the 26% applied to other financial instruments. Any capital loss (purchase above par) is not taxed. Accrued interest, fees and stamp duty are excluded from this calculation.
Does the calculation also apply to BTP Valore or index-linked bonds?
This tool is designed for fixed-rate BTPs with a constant coupon. For inflation-linked BTPs (BTP€i, BTP Italia) or bonds with a rising coupon (step-up), the yield depends on future variables and must be estimated with the bond's specific parameters.
Related tools: guide to BTPs 2026, compound interest calculator and deposit account comparison.
