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Global businesses are increasingly hiring remote employees in Italy due to the country’s highly skilled workforce, particularly in sectors such as design, engineering, and technology. Italy also offers access to the broader EU market while benefiting from a strong remote work culture and improving digital infrastructure.
Italy offers a highly educated talent pool and competitive hiring costs, making it an attractive destination for global companies. Employers must comply with specific regulations around minimum wages, employment contracts, and social security contributions.
Learn more about salaries, employment costs, and legal requirements for hiring in Italy. Download the full hiring guide now!
Italy offers two main types of employment contracts: indefinite contracts, which are the most common, and fixed-term contracts. In most cases, employers and employees prefer to sign a written contract to ensure proper registration with the relevant authorities. While the contract should ideally be in writing, parties can also establish it verbally through actions like starting work.
Notice periods: Range from 15 days to up to 6 months or more, depending on employee category, seniority, and applicable collective agreements
Termination of employment: Just Cause (Giusta Causa), Justified Subjective Reason (Giustificato Motivo Soggettivo), Justified Objective Reason (Giustificato Motivo Oggettivo)
Need help tailoring employment contracts to Italy’s labour laws? Get our complete template!
In Italy, the government and employers offer employee benefits that protect workers and promote their work-life balance, but there are no mandatory allowances for employees. While various private pension systems exist, participation in these is also not mandatory, allowing employees to choose their level of involvement in retirement savings.
They ensure employees receive essential social security coverage, paid leave, and protections related to family and health.
Performance bonus is also considered a regular bonus, which is also considered part of the gross salary and is taxable.
There are no other incentives aside from the meal vouchers that are considered tax-free.
Employer contributions are paid monthly using a form called F24, typically by the 16th of the following month. Employer contributions range from 29% to 32%, while employee contributions range from 9.19% to 10.49%. These rates depend on the company’s activities, the number of employees, and the employee’s position.
Contributions cover:
Unemployment
Sickness
Maternity
Temporary unemployment compensation
Social mobility
Other minor funds
INAIL (Istituto Nazionale Della Previdenza Sociale) is another mandatory contribution that covers workplace accidents and occupational diseases. It varies by region and must be reported to the appropriate authorities.
And there are no mandatory retirement benefits beyond the public pension system.
Benefits in Italy may include meal vouchers, gym subscriptions, or various allowances (e.g., travel, rent, internet, or school allowances) at the employer’s discretion.
In Italy, social security is mandatory by law. It's paid with the F24 form every 16th of the next month. Social security covers health care, pension fund, injury fund, and sickness fund (not applicable for executives).
Unemployment Insurance is mandatory by law. It's paid with the F24 form every 16th of the next month. With the employee and the employer contributions, the employees fund the unemployment insurance. After the contract is terminated, the unemployed person can request from the government agency to receive the Unemployment salary (called NASPI) for a maximum of two years. The unemployed person can request the NASPI only with unwanted termination (so no Mutual agreements or resignation).
Social security contributions to INPS cover pensions, health care, maternity, unemployment, and other worker protections. INAIL contributions specifically cover workplace injuries and occupational diseases. Some benefits, such as sickness and social mobility funds, may not apply to executives depending on their contractual framework.
Disability insurance is included in Italy’s mandatory social security system and is funded through monthly contributions using the F24 form. It provides financial support for employees who are unable to work due to physical or mental disability, subject to eligibility requirements set by INPS.
Curious about employee benefits in Italy?
Italy has a progressive tax system that applies to both individuals and businesses, with employers responsible for withholding income taxes and social security contributions from employees’ salaries. In addition to income tax, employers must also handle social security contributions, which fund pensions, healthcare, and other social benefits.
In Italy, employee tax obligations are deducted from salaries based on progressive tax brackets, meaning that tax rates increase with higher income levels. Importantly, there is no distinction in income tax treatment between new joiners and existing employees; all are subject to the same tax regulations.
Employers are responsible for remitting these tax contributions using the F24 form, which must be submitted by the 16th of the following month. This ensures timely compliance with tax regulations and supports the overall tax system.
Personal income tax applies to an individual’s total income. Gross tax is calculated by applying the rates per bracket to gross salary.
As of 2024 and continuing into 2025, the income tax brackets are as follows:
Up to EUR 28 000 - 23%
From EUR 28 001 up to EUR 50 000 - 35%
Above EUR 50 000 - 43%
9.49% of the gross salary is taxed for social security contributions.
Municipal income tax depends on the municipality of residence. The municipal income tax rate ranges from 0% to 0.9%. Municipalities can establish progressive tax rates applicable to the national income bracket.
Regional income tax depends on the region of residence. The regional income tax rate ranges from 1.23% to 3.33%.
There are also some local taxes that depend on where the person lives, and they are the municipal and regional taxes. They are not fixed and vary from place to place.
Personal income tax rate: Up to 28,000 — 23%; From 28,001 to 50,000 — 35%; Over 50,000 — 43%
VAT: 22%
Tax allowances: Italy employs a tax credit system rather than personal exemptions and allowances to determine taxable income. The amount of employment tax credit depends on the type and level of income, whether from employment, pensions, or self-employment.
Additional tax reliefs: Mortgage interest credit, medical expenses credit, education expenses credit
Want to explore Italy’s tax allowances and related tax rules?
Employers must pay salaries in accordance with the terms outlined in individual employment contracts or relevant collective bargaining agreements (CBAs). The salary amount specified in an employment contract can be listed in local or foreign currency, depending on the jurisdiction. In Italy, however, salaries must be stated exclusively in EUR. The full month's salary is divided by 26 working days. It's a fixed number decided by law and Saturdays are counted too. If a bank holiday falls on Sunday or Saturday, the working days will be 27 in that month (fixed 26+1 bank holiday).
As of 2025, the Italian National Social Security Institute (INPS) has set an annual maximum taxable and pensionable income cap at €120,607. Social security contributions are calculated only up to this limit.
In Italy, employees must submit the 730 form, an annual tax declaration, between May and September. To facilitate this process, employers must provide the "Certificazione Unica" (CU) to each employee. This certificate outlines the employee's earnings and tax withholdings, ensuring accurate tax filing and compliance with regulations.
Salary payment deadline: By the 10th of the following month
Taxes and contributions payment deadline: By the 16th of the following month
Payroll declarations deadline: By the 16th of the following month
Payroll currency: EUR
Termination pay: In Italy, termination payments must be made with the final payslip. The payment is typically due on the 10th of the following month or the 10th of the second month after termination, depending on when the TFR (severance payment) is paid:
In Italy, collective bargaining agreements between trade unions and employers' associations govern key employment terms, including wages, hours, and benefits. While employers and employees can negotiate contracts, all agreements must align with national labour laws and CBAs. This ensures that contracts meet statutory minimum standards despite the freedom to negotiate.
Total employment cost: 30%
Minimum wage: No statutory minimum wage
Probation period: Up to 6 months for all employees; 3 months for non-managerial positions
EOR services in Italy let you legally hire individuals without setting up a local legal entity. The EOR acts as the official employer and handles all legal responsibilities, including:
PEO services in Italy deliver HR and administrative support while you retain your role as the legal employer. Employers with existing legal entities in Italy use PEO services to help manage their workforce operations, including:
Native Teams offers a payroll calculator tailored to Italy’s labour laws. With our tool, you can quickly estimate net and gross salaries, employer and employee contributions, and other mandatory deductions.
Note: The information provided above is for general guidance only and should not be considered a substitute for legal advice. We strongly recommend consulting with qualified professionals who specialise in local labour laws before making any hiring decisions. While the data was accurate at the time of writing, labour regulations are subject to change, and it is your responsibility to stay informed about the latest developments.
Last update: October 24, 2025
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Freelancers in Italy typically register as libero professionista (self-employed professionals) or operate as sole proprietors (ditta individuale). They handle their own taxes and social security contributions, so as a client, you aren’t responsible for withholding taxes or contributions.
However, you must ensure that the working relationship clearly reflects a freelance contract and does not resemble an employment relationship to avoid misclassification risks. It is important to have a clear written agreement outlining the scope of work, responsibilities, payment terms, and deadlines to protect both parties.
