How to hire and pay EMPLOYEES IN

Italy

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Before hiring

EMPLOYEES IN
Italy

Before hiring employees in Italy, there are some key things you’ll need to know. Firstly, at the end of any employment contract, all employees in Italy receive severance pay (“Trattamento di Fine Rapporto"). It accrues over the course of their employment at a cost of 7% of gross salary to their employer.

In Italy, a normal weekly working hour limit is 40 hours, but this does not apply to executives, managers, or remote workers. 

Italy also has customary 13th and 14th salaries for some roles (like managers, executives, and some other professions). One is paid at the time of an employee's summer holiday and one is paid at Christmas.

We know keeping track of all this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform. 

Get an overview of what you need to know when hiring in Italy below. 

At a Glance

CURRENCY

EUR

OFFICIAL LANGUAGE

ITALIAN

PAYROLL FREQUENCY

MONTHLY

PUBLIC HOLIDAYS

12

(based on region;
see here
)

EMPLOYER TAXES

~30%

of gross salary

13th / 14th SALARY

13th (June) & 14th (December) for certain roles (managers/executives)

Good to know

  • All employees in Italy receive severance pay (“Trattamento di Fine Rapporto") at the end of their employment. It accrues over their employment at a cost of 7% of gross salary to the employer.
  • The normal weekly working hour limit is 40 hours in Italy, but this does not apply to executives, managers, and remote workers who work from home or another office.
  • Italy has customary 13th and 14th salaries for some roles like managers, executives, and some professions. One is paid at the time of the employee's summer holiday and one is paid at Christmas.

Employment in

Italy

Working hours and overtime

There are working hour restrictions in Italy, but they don’t apply to:

  • Executives, managers and employees who have any form of independent decision
  • Remote workers and employees working from home

The normal working week is 40 hours, and the maximum working week is an average of 48 hours every seven days (including overtime) calculated over a four-month reference period. Although there’s no defined day length, employees are entitled to a daily rest period of 11 consecutive hours every 24 hours.

Overtime in Italy can not exceed 250 hours per year. Overtime must be compensated with increased salary.

Employment contracts
Probationary period

In Italy, the probation period is six months for managers and three months for non-managers.

Pensions
Notice period

There is no statutory notice period in Italy, but agreed-upon notice periods must be included in employment contracts and collective bargaining agreements.

Non-compete agreements

Non-compete agreement must be in writing and must be limited in terms of duration and scope. The maximum duration of a non-compete agreement in Italy is three years for employees and five years for executives.

It must also include financial compensation to the employee which is paid on top of their normal salary. Such compensation is generally evaluated on a case by case basis, and generally varies from between 20% and 40% of the gross annual remuneration paid to the employee.

Employment cost calculator

Holidays

01 Jan

New Year's Day

02 Jun

Republic Day

06 Jan

Epiphany

15 Aug

Assumption Day

04 Apr

Easter Sunday

01 Nov

All Saints' Day

05 Apr

Easter Monday

08 Dec

Immaculate Conception

25 Apr

Liberation Day

25 Dec

Christmas Day

01 May

International Workers' Day

26 Dec

St Stephen's Day


01 Jan

New Year's Day

06 Jan

Epiphany

04 Apr

Easter Sunday

05 Apr

Easter Monday

25 Apr

Liberation Day

01 May

International Workers' Day

02 Jun

Republic Day

15 Aug

Assumption Day

01 Nov

All Saints' Day

08 Dec

Immaculate Conception

25 Dec

Christmas Day

26 Dec

St Stephen's Day

Employer tax

Employers in Italy are taxed approximately 30% of each employee’s salary for social contributions.

Individual tax

Employees in Italy are taxed between 23% and 43% depending on their income bracket. Employees are also taxed around 10% which goes to social contributions.

Termination of employment

At the end of any employment contract, even for just cause and resignations, employers in Italy must pay the “Trattamento di Fine Rapporto” which is a severance pay of an employee’s all-time received salary divided by 13.5. It is an extra cost to the employer of ~7% per month.

An employer can terminate an employee based on two reasons: 

1) An objective reason such as redundancy due to economic reasons 

2) A subjective reason such as a breach of their contractual duties 

If an employee believes they have been unfairly dismissed, they can go to an employment tribunal where paid damages for a typical case are between three to six months of an employee’s salary. 

Start hiring employees in

Italy

Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast. 

We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities. 

With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.

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wherever they work in the world.

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