What Should I Know About Hiring in Italy?
Recent reforms to Italian law have made the country, already home to one of the western world’s greatest economies, more appealing to startup companies. In addition, entrepreneurs are drawn to Italy largely because of its favorable business climate and vast, educated labor force.
The Italian legal system governing employment and labor is notoriously intricate. Both national law and CBAs negotiated by labor unions and employer groups govern this area. In addition, some employment regulations adopted at the EU level also apply in Italy.
Workers in Italy enjoy generous benefits and protections, making it difficult to comply with the law. The following summary can help you get started. Still, unless you work with an employer of record (EOR), you will probably need legal counsel to ensure you don’t break any regulations.
Why Is Italy a Good Choice for Finding Remote Employees?
Italy is a great place to find skilled, dedicated, and reasonably priced remote workers. The area has many highly trained individuals and a high quality of life, making it an ideal spot to find the right employee for your company.
In addition, the Italian labor force has a strong tradition of excellence across many fields. Italian laborers have a well-deserved reputation for their diligence and perseverance. The work ethic in Italy is strong, and it reflects in the high quality of the products that companies here make.
For this reason, enterprises looking to set up shop or grow their operations here should seriously consider this nation as a location. Moreover, there are a variety of financial and other perks available to businesses that migrate here.
How Can Native Teams Help You Hire in Italy?
To begin employing remote Italian workers, you will require either a legal entity in Italy or the services of a worldwide recruitment solutions provider. Collaboration with Native Teams is a strategy that can be useful in such scenarios. In addition, with our employer of record services, we can also help you with the recruitment of new workers, the administration of their pay, taxes, and benefits, and the overall compliance with Italian legislation.
Hire your first Italian employee with Native Teams.
Legal Requirements for Hiring in Italy
To calculate the salary and taxes in Italy please click here.
There is no legally mandated minimum wage in Italy. Instead, minimum salaries are established by national collective bargaining agreements (NCBAs).
Contributions & Taxes
How much are the contributions & taxes?
Employer costs are often calculated at 38% of income:
- For Social Security: 23.81 %;
- General Fund: 1%;
- TFR Guarantee Contribution: 0.20%;
- TFR Funds: 7.40%;
- Injuries at Work Insurance: 0.40%;
- Employment Insurance: 1.61%;
- Family Allowances: 0.68%;
- Maternity: 0.24%;
- Sickness Benefits: 2.44%.
Italian corporations face a combined income tax rate of 24%, with a 3.9% regional production tax. For corporations that do not engage in active business operations, the corporate tax rate is 34.5%.
In Italy, the standard income tax rate for workers is between 23% and 43% per year, and this percentage rises in higher income brackets.
The income tax rate a person pays is determined by the state or province in which they reside. Tax rates on income vary from 1.23% to 3.33%.
What is the payroll cycle?
In Italy, paychecks are issued on the 27th of the month, following a monthly payroll cycle.
Is there a 13th salary in Italy?
A salary must be divided into 13 equal payments under Italian law. Every year, the 13th instalment (“tredicesima”) is dispersed in addition to the December salary. A 14th payment, often due in June, is included in some NCAs.
What are the main Labor Rules?
Probation period rules
In Italy, the length of an employee’s probationary period depends on the nature of their position. There is no bare minimum for the probationary period, but the maximum is 6 months. Collective bargaining agreements often determine how long a probationary period lasts (CBAs).
In Italy, notice periods are expanded from the standard 30 days based on factors such as the employee’s position, length of service, and the reason for termination.
1. In the case of executive and managerial jobs, the employee may resign:
- 5 years of service: 45 days;
- Service has lasted over 5 and up to 10 years: 60 days;
- 10 or more years of service: 90 days.
2. Employment termination by the employee
- 5 years of service: 20 days;
- Service has lasted over 5 and up to 10 years: 30 days;
- 10 or more years of service: 40 days.
3. Executive management roles dismissed by the employer:
- 5 years of service: 60 days;
- Service has lasted over 5 and up to 10 years: 90 days;
- 10 or more years of service: 120 days.
4. Employment termination by the employer
- 5 years of service: 30 days;
- Service has lasted over 5 and up to 10 years: 45 days;
- 10 or more years of service: 60 days.
There is no such thing as severance pay in Italy. TFR or Trattamento di Fine Rapporto is the portion of workers’ salaries whose payment is deferred at the conclusion of the job connection and is given to the employee only after the employment relationship has ended. The TFR is determined by dividing the annual wage by 13.5, plus 1.5% every year of service, and an inflation adjustment.
The typical workweek consists of 40 hours, divided evenly across 8-hour days. The regular work week consists of Monday through Friday. Standard business hours in Italy are from 9:00 am to 1:00 pm and 2:30 pm to 6:00 pm. Many businesses also close from 1 to 3:30 every day for the riposo, or midday nap, a tradition that is widespread and consistent throughout the country.
Leave and Benefits
Leave and Benefits rules
According to the location of the worker, Italians observe either 12 national or 10 regional holidays.
Here are some of the national holidays:
- New Year’s Day
- Easter Sunday
- Easter Monday
- Liberation Day
- Labor Day
- Republic Day
- Assumption of Mary
- All Saints’ Day
- Feast of the Immaculate Conception
- Christmas Day
- St. Stephen’s Day
In Italy, workers can take sick days covered by their employer and, ultimately, the government. In addition, the first three days of illness time are compensated at 100% of regular pay for the first two times per year.
After the first three days of illness, the employee is entitled to 75% of their regular wage, with the employer covering the other 25% and the government picking up the rest.
Employees with long-term illnesses receive 100% of their wage beginning on the 21st day of absence, with the government picking up the tab for 66% of that amount.
Maternity leave & Paternity leave
Paid maternity leave for all employees is five months long, beginning two months before the expected due date and ending three months after the birth.
A new mother is also entitled to an additional six months of unpaid leave following her maternity leave. A mother can take up to 12 weeks off after giving birth, but she doesn’t have to. Instead, she can work 6 hours a day for the first year of her child’s life.
Within the first five months after the birth of his kid, the father is entitled to 10 days of paid paternity leave at 100% of his regular pay.
Other leave (marriage, bereavement, exam leave)
Italian staff members can request “paid permits” or extended periods of paid absence in case of a death, serious sickness, or other family emergencies. In the first two years of employment, employees are eligible to request 32 hours of paid permits annually; after that, this increases to 68 hours.
Each parent is eligible for additional leave until their child is 12. There is no minimum amount of time spent at work required. However, parents can only take up to 11 months of leave.
When adopting a kid from Italy or internationally, all employees are eligible for leave to care for their new family regardless of tenure. One adoptive parent only is allowed to take the leave. An employee who adopts a kid from another state is eligible for five months of paid leave after the child’s placement.
What are the minimum vacation days?
Every year, workers receive 26 paid vacation days. Any unused time off will roll over into the following year and must be used by June 30th.
Health Security & Private Insurance
Anyone who has worked for an employer for at least three months within the previous fifteen months is entitled to free medical and dental care through the Social Security Administration.
*Native Teams can support you in finding the best private insurance in the country. Contact us and we will send a comparison of insurance packages and prices.*
Relocation and Work Permits
Native Teams will apply for your work visa in the nation on your behalf and serve as your Employer of Record. All the required documents can be uploaded using our app. Until you have your work and residency visa, Native Teams will support you by providing you with frequent information on the progress.
How long is the Visa / Work Permit process?
2 to 4 weeks depending on the authorities and provided documents.
Which documents do you need?
To apply for a visa/work permit in Italy, please upload the documents from our onboarding list (relocation to log in/pricing).
Why use Native Teams for Hiring in Italy?
Native Teams lets you employ team members ‘like a local’ meaning you get all the benefits of a global team, wherever you are based. Here are the reasons why you should use Native Teams for hiring:
- No paperwork: We will handle all the necessary paperwork for you.
- Save on taxes: We help you handle your taxes.
- No company set up: You can expand your business using our company entitles.
- Online onboarding: We’re here to ensure your onboarding process is trouble-free.
- No accounting: We will handle all of your accounting needs, including invoicing, payroll, and more.
- Increase your profit: We assist you in growing your business and maximizing your profits.
- Compliance expertise: we can assist your company in navigating the regulatory environments and ensure you meet all relevant requirements.
- Local support: We can assist you in understanding and complying with the relevant local laws.
*Note: The provided information was accurate at the time of writing.