How to hire and pay employees in Italy
With Instahirin, your business can easily hire employees in Italy. No more worrying about local laws, complex tax systems, or managing international payroll.
Before hiring
EMPLOYEES IN The Italy
Before hiring employees in Italy, one key thing employers should be aware of is the country’s strong enforcement of GDPR (General Data Protection Regulation). Employers are legally required to protect employees’ personal data, especially when transferring it across borders. Compliance with these privacy laws is critical before making any international hires.
Another important consideration is Italy’s comprehensive labor laws and mandatory employee benefits. Employers must contribute to social security, healthcare, and pension systems, and employees are entitled to paid vacation, sick leave, and 13th-month salary bonuses in many sectors. Italy also has strong labor unions and collective agreements (CCNLs) that may apply depending on your industry.
At a glance
CURRENCY
Euro (EUR)
OFFICIAL LANGUAGE
Italian
PAYROLL FREQUENCY
Monthly
EMPLOYER TAXES
30% to 33%
of gross salary
13th / 14th SALARY
N/A
Good to know
Italy has a universal public healthcare system (Servizio Sanitario Nazionale – SSN) funded through taxes. Residents are entitled to free or low-cost healthcare, including general practitioners, hospital care, and emergency services. Many employers offer private health insurance as a benefit to cover extras like dental, vision, or faster private care.
The standard workweek in Italy is 40 hours, with a legal maximum of 48 hours per week, including overtime, averaged over four months. Overtime is allowed under specific conditions and must be compensated. Workers are also entitled to daily and weekly rest periods, with strict rules protecting work-life balance.
Labor laws in The Italy
Working hours and overtime
In Italy, the standard workweek is 40 hours over five days, with a daily rest of 11 hours, a weekly rest of 24 hours, and overtime paid at a higher rate or compensated with time off, as regulated by Legislative Decree No. 66/2003.
Employment contracts
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
- Probationary period, if applicable
- Duration of paid holidays
Probationary period
Probationary periods in Italy are common but not required by statute. The length of the probationary period varies depending on the terms of the applicable collective bargaining agreement. Usually, the maximum probationary period is six months.
Calculate costs to hire internationally
Benefits and leave in The Italy
Annual leave 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.
Sick leave
Collective bargaining agreements and individual contracts usually provide for paid time off for illness and injury. The employee is entitled to keep their job and receive their salary in proportion to the period set out in the collective bargaining agreement or individual employment contract. If no agreement exists, statutory sick pay is a benefit that replaces pay, starting from the fourth day of absence from work. The first three days are “waiting days” unless the illness relapses. If stated in the employment contract, the “waiting days” are paid in full by the employer. Entitlement to the benefit ends at the end of illness. Statutory sick pay is paid for a maximum of 180 days per calendar year.
Parental leave
Employees are entitled to 11 months of parental leave, which can be taken until the child reaches 12. Both parents can decide how to distribute the time off, which should be taken after paternity and maternity leave.
Either parent can take parental leave. Social Security (INPS) will pay 30% of the salary during this period.
Holidays
Italy has the following 12 public holidays, which are not included in the minimum holiday entitlement. However, employers generally give their employees all of Italy’s public holidays off of work. Collective bargaining agreements may dictate that employees get these regional and national holidays off of work.
Employer tax
In Italy, employers typically contribute around 30% to 33% of an employee’s gross salary to social security, covering pensions, unemployment, sickness, maternity, and other welfare benefits, with exact rates varying by sector and employee classification.
Individual tax
In Italy, individuals pay progressive income tax (IRPEF) ranging from 23% to 43%, along with regional and municipal surcharges and mandatory social security contributions, with the total tax burden varying based on income level and location.
Termination in The Italy
Terminations in Italy can be complex. In exceptional cases, there is at-will termination in Italy for employers outside the probation period and generally, the termination must be done for just cause.
Compliant terminations include:
- Voluntarily by the employee
- By mutual agreement
- By the expiration of the contract
Notice period
The minimum notice period is 30 days and will be increased according to the length of the employment, category of the employee, and type of termination.
- 45 days if the length of service is up to 5 years
- 60 days if the length of service is more than 5 years and up to 10 years
- 90 days if the length of service is more than 10 years
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 legal fees are high. In Italy, understanding and complying with complex labor laws, tax obligations, and collective agreements can be time-consuming and overwhelming. Finding accurate, up-to-date employment information is challenging, and juggling contracts, payroll, and invoices through emails and spreadsheets leads to inefficiencies.
We can’t afford to take risks when it comes to compliance we must follow Italy’s local regulations, especially around taxes, benefits, and legal protections for employees.
With InstaHirin, you can easily manage HR, payroll, and automate compliance in Italy and 180+ countries all from one user-friendly platform so you can hire quickly and confidently without setting up a local entity.
Disclaimer: The information provided in this resource is for general educational purposes only and shall not be construed as legal advice. While InstaHirin yster strives to provide current and accurate information, InstaHirin makes no warranties or representations as to the correctness of the content provided and accepts no liability or responsibility for any errors or omissions in the content provided. By using this resource you acknowledge and agree that you do so at your own risk. The content of this resource is subject to change without notice.
