EMPLOYER OF RECORD IN ITALY
Employ in Italy
Pebl’s Employer of Record (EOR) solution makes hiring a distributed team in Italy simple. Trust in our Global Work Platform™ to handle everything from compliance and risk mitigation to easy onboarding and payroll. Grow your business in Italy with Pebl.
We care about your privacy. By submitting this form, you will receive the requested information, as well as occasional related business insights from Pebl. You can unsubscribe at any time. For details, view our Privacy Policy.
Italy at a glance
EUR
Currency, Euro
59.10M
Population
2.11B
GDP
58th
Ranked Ease of Doing Business
Italian
Language
Monthly
Payroll Cycle
Grow your team in Italy
Italy’s economy has progressed from being one of the weakest in Europe after World War II to one of the most powerful. The country is the world’s eighth-largest economy as of 2020 and the third-largest in the European Union, after Germany and France.
Italy is one of the easiest countries in which to do business, according to the World Bank’s latest Doing Business report from 2019.
Most of the Italian economy is driven by manufacturing high-quality consumer goods produced by small- and medium-sized businesses, many of which are family-owned.
Italy’s unemployment rate sits at 9.3%, which bodes well for international companies drawing in applicants for hire.
Italy’s economy has progressed from being one of the weakest in Europe after World War II to one of the most powerful.
Hiring in Italy
When employing an individual in Italy, it is not mandatory to enter into a written employment contract. An oral employee contract is valid. However, certain clauses must be in writing to be valid, such as a probationary period, a fixed-term period of employment, and a non-competition clause.
Within 30 days of starting employment, the employer must inform the employee in writing of the following:
- Identity of the parties
- Place of work
- Date on which the contract begins
- Duration of the contract—specifying whether it is fixed-term or permanent employment
- Probationary period, if applicable
- Job title or category
- Salary
- Duration of paid holidays
- Working hours
- Length of the notice period when terminating the contract
Easily navigate payroll laws, contributions, and requirements in Italy
September 30
Tax due date in Italy Employees file a tax return using the Redditi PF form or the 730 form, depending on their type of income.
MONTHLY
Payroll cycle in Italy The payroll cycle in Italy is generally a monthly cycle, with wages paid by the 27th of each month.
40 HRS/WK
Average weekly working hours in Italy The usual working week is 40 hours. The maximum working week is an average of 48 hours every seven days, including overtime.
Hiring in Italy
When employing an individual in Italy, it is not mandatory to enter into a written employment contract. An oral employee contract is valid. However, certain clauses must be in writing to be valid, such as a probationary period, a fixed-term period of employment, and a non-competition clause.
There is no statutory minimum wage in Italy at the national or regional level. However, the courts consider minimum wage and salary set by national collective bargaining agreements for the relevant sectors. Since July 1, 2018, salaries cannot be paid in cash and can only be paid by check, bank transfer, or other electronic payment methods.
Calculate payroll contributions in Italy
Estimate the true cost of hiring in Italy, including locally mandated employer contributions.
Add an employee to see estimated annual costs.
Taxes and social security in Italy
Italian residents are responsible for paying income tax on all income earned anywhere in the world. Non-residents of Italy only pay income tax on the income earned in Italy. Individuals are considered Italian residents if, for more than 183 days in the tax year, they have one of the following characteristics apply to them:
- They are enrolled at the public residency register of the town hall council where they reside
- They have their economic and personal interests in Italy
- They have their habitual residence in Italy
As of November 1, 2021, the income tax rates in Italy are:
- 23% for income up to EUR 15,000
- 27% for income over EUR 15,000 and up to EUR 28,000
- 38% for income over EUR 28,000 and up to EUR 55,000
- 41% for income over EUR 55,000 and up to EUR 75,000
- 43% for income over EUR 75,000
Social security contributions are payable on employees’ gross annual earnings. The basic rate for employer contributions is currently around 27% to 28%. The current rate for employees is 9.19%, with a ceiling of EUR 103 for 2021 for any employees who started work after December 31, 1995.
Leave entitlements in Italy
Employees are entitled to a minimum of four weeks of paid vacation time a year and 12 paid public holidays. Collective bargaining agreements and individual contracts can provide a longer period of paid holiday entitlement. Minimum paid annual leave in Italy cannot be replaced by a payment, except where the employment contract is terminated. There is no statutory unpaid holiday entitlement. However, a collective bargaining agreement can provide for unpaid leaves of absence.
Employment benefits in Italy
The National Institute for Social Security (“Instituto Nazionale della Previdenza Social” (INPS)) and the National Health Service (“Servizio Sanitario Nazaionale” (SSN)) are the Italian public social security system and public health insurance system which covers all life risks for residents of Italy. Employees and their families are fully eligible for Italy’s comprehensive systems, which include:
- Health, maternity, paternity, disability, and death insurance
- Occupational accident and illness insurance
- Government pension contributions
- Family allowances
- Unemployment benefits
Termination and notice period in Italy
An employer can terminate an employment contract in two ways:
- Dismissal without a notice period for just cause, where there is a serious breach of the employment contract, such as gross misconduct.
- Ordinary dismissal with notice based on either a breach of the employee’s legal and contractual duties or economic factors related to production, the proper functioning of the business, and the organization of work.
The relevant notice period required to dismiss an employee for either reason is defined in the employee’s applicable collective bargaining agreement. It is based on the employee’s length of service, position, and level. The notice period required for resignation is usually shorter than for dismissal. In dismissal cases, the employer can choose to make a payment instead of the notice period on which social security contributions must be paid.
In all cases where an employment contract is terminated, the employer must pay the dismissed employee the following:
- Severance pay: The employer must pay severance in all cases, even if there is a resignation or just cause for dismissal. The amount payable is equal to the sum of each annual salary divided by 13.5. These amounts are index-linked annually.
- Pro-rata supplementary monthly payments: The employer must pay these if they have done so during the employment contract. In these cases, the employer must pay the amount due up to the date the employment contract is terminated.
- Payment in place of holidays not taken: If dismissed employees have not used all of their holiday allowances before the employment contract is terminated, they are entitled to a payment in place of any unused, accrued holiday allowance.
FAQ
An employer of record (EOR) in Italy is a third-party organization that becomes the full legal employer of your in-country workforce. The EOR compliantly handles employer-related responsibilities like onboarding, pay, and benefits while enabling you to continue managing the day-to-day operations of your team.
Get a global perspective with our resources
More countries we serve
Browse the countries below to learn more about hiring and paying employees compliantly in each market.