Italy
If you’ve found someone in Italy you’d like to hire remotely, you’re in the right place. There’s a lot of misinformation about what it means to hire abroad—and we’re going to clear that up by the end of this page.
Country snapshot
CURRENCY
Euro (EUR)
EMPLOYER TAXES
32.0%
PAYROLL FREQUENCY
Monthly
OFFICIAL LANGUAGE
Italian
It’s the fastest way to hire globally
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It’s a lot cheaper
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
It’s more flexible for you & your team
Can be less risky than hiring employees
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
Some people want to be employees
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
You might not have as much control over your talent
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
Hiring in Italy can be confusing, but it’s easier when you know what you’re doing. If you want to hire remote talent in Italy, you have two options: Hire people as contractors, or hire them as employees.
Hire talent as contractors
Hire talent as employees
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Italy than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Italy.
Employer tax
Social Security
Individual tax
Salary
- Up to 15,000
- Over 75,000
Percentage
- 0.00%
- 43.00%
Paid Time Off (PTO)
The mandatory minimum number of paid leave is 26 days and employees can carry over the unused days to the following year, however, they must be used by June 31st. Any remaining unused PTO will be cashed out.
Employers can decide when the vacation is taken. Also, permission to carry over holidays should be stated in the contract. The employee is to take leave in the following way:
- for at least two consecutive weeks in the event of a worker request. or the remaining two weeks, in the 18 months following the end of the vesting year. The leave matures during the employment relationship, from the moment of hiring.
- PermessiEx-Festività (suppressed holidays) -are given to every employee independently from seniority or National Labour Agreement, and they are given due to 4 bank holidays that were abolished. To make up for those days’ employees would’ve had off they are given 32 hours of leaves to be enjoyed at their leisure.
- Permessi ROL (reduction in working hours)-are given to employees starting with their 3rd year of employment and they are 28 hours per year. From their 5thyear of employment, they accrue56 hours per year.
Public Holidays
There are 11 national holidays and 1 regional holiday.
If a public holiday falls on a Sunday, the day is carried over to Monday or paid in lieu.
Sick Days
For the first three days, the employee is entitled to a 100% payment which is covered by the employer. This applies to the first two illnesses of the year; for the third illness 66% is covered and for the fourth illness 50% is covered. After that, the employee is not covered for the first three days of illness.
From the 4th to the 21st day of the illness the employee is entitled to 75% of the salary of which 50% is covered by the government and 50% by the employer.
From the 21st day onward, the employee is entitled to 100%, of which 66% is covered by the government and the rest by the employer.
Maternity Leave
Mothers are entitled to 5 months of maternity leave. Two months must be taken before birth. The employee will receive a 100% pay. Employers make the payment and can later ask for reimbursement of 80% from the INPS.
Paternity Leave
Within the first 5 months of the child’s birth fathers receive 10 days of compulsory leave and a paid 100% of their salary. An extra optional day of leave as an alternative to the mother.
New fathers must notify the employer 15 days prior to taking leave.
If the mother does not take maternity leave (due to death, infirmity, or the father having exclusive custody), the father is entitled to three months’ paternity leave after the birth of the child. These rules also apply if the mother is self-employed.
Parental Leave
In Italy, an employee is able to take up to 10 months of unpaid parental leave:
- For a mother after maternity leave: Can take up to 6 months of unpaid leave
- A single parent: Can take up to 10 months of unpaid leave
If a mother chooses to not take parental leave after maternity leave, she is entitled to work 6 hours a day until the child is 12 months old.
Other Leave
Paid permits, aka “Permessi Retribuiti”, are a special amount of paid leave out of which paid permits can be used only for specific reasons stated in each CCNL, the most common are the following:
- Handicapping of a family member
- Family reasons
During the first 2 years of employment: 32 hours per year (only “festivita’ soppresse”)
Third and fourth years of employment: 68 hours per year (36 hours for permits + 32 for “festivita’ soppresse”)
Marriage Leave
None.
Bereavement Leave
In Italy, under “Permessi Retribuiti”, the employee entitled to have a special amount of paid leave.
Termination Process
In Italy, written notice must be given to the employee.
If a labor court deems the termination unfair, the employer must either reinstate the employee or pay additional compensation.
Employers must provide notice of termination regarding all types of termination unless it is dismissal due to serious disciplinary reasons. Notice periods can be set in the collective agreement or payment in lieu of the notice period.
A contract of employment may be terminated in any of the following ways:
- Resignation
- Dismissal by the employer (including dismissal for “just cause”)
- Expiry of a fixed term
- Mutual agreement
- Retirement.
Notice Period
The notice period in Italy is:
From Employer:
- 30 Days notice for Employees
- 60 notice for managers.
From Employee:
- 30 Days notice for Employees
- 45 notice for managers.
Severance Pay
In Italy, employers must set aside funds for severance (TFR) for the employee and is to be paid out to them within 6 months of leaving the company.
TFR is calculated by:
- Taking the gross annual salary from January 1st to December 31st and is divided by 13.5
- Deduct the taxable income (pension, social security) and multiply this amount by 0.5%
Based on an additional percentage by the National Statistical Institute, the final TFR amount is increased.
Probation Period
Probation period is until 6 months for managerial level up to 2 months of probation for below managerial level.
Working Hours
A normal workweek is 8 hours a day and 40 hours a week.
Overtime
Overtime is limited to 2 hours a day and must be approve by the company.
There is no set overtime pay, however, overtime pay must be more than the regular rate.
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