Employer of Record Services for Italy

Employing in Italy

Italy's employment landscape is characterised by robust labour laws and a focus on worker rights. Employers must adhere to the Italian Labour Code and National Collective Bargaining Agreements. Compliance with Italian Income Tax Law is also essential, and staying informed about evolving tax obligations is critical. The Italian employment framework emphasises equality, and employers are expected to provide equal pay for employees performing similar duties.

TopSource Worldwide's EOR services provide vital support for businesses expanding into Italy, helping them to effectively integrate and manage their workforce in Italy's unique labour market, whilst ensuring compliance with Italian Income Tax Law and equal pay regulations.

Our Expertise

Managing a global workforce in Italy

For global businesses operating in Italy, understanding and integrating into the local employment culture is key. The Italian workforce is protected by comprehensive labour laws and social security systems. Navigating these regulations requires a deep understanding of the Italian employment landscape. Companies must align their global workforce management strategies with Italian norms to ensure smooth operations and legal compliance.

Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.

Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.

Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success.

Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

Nutreco

See our customer stories

”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

Sungard

See our customer stories

”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Supervisor

Client based in Ft Worth, Texas, USA

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GLOBAL EXPANSION STRATEGY

Personalised Employer of Record services in Italy

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in Italy. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Italy-based employees.

End-to-end Italy payroll services

Looking to expand into Italy? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Italy expansion initiatives.

Global entity management

Venturing into the Italian market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

Accounting

Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in Italy

Entering the Italian market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in Italy.

Start your Italy expansion

Italy Insights

Key insights into Italy's landscape

VAT rates: Italy has a standard VAT rate of 22%, with reduced rates of 10% and 5% for specific goods and services.

Ease of Doing Business rank: Italy ranks 58th in the World Bank's Ease of Doing Business Index, reflecting a moderate business environment.

Consumer Confidence Index: As of 2022, Italy's Consumer Confidence Index was 102.5, indicating relatively positive economic sentiment.

Employee maternity/paternity leave: Maternity leave is 5 months, and paternity leave is 5 days, providing support for new parents in the workforce.

Employee termination period: Standard notice for termination is 15 days, but employment contracts and circumstances may influence the specific terms.

Employee salary pay date: Wages are generally paid monthly, with specific pay dates agreed upon in employment contracts and subject to labour regulations.

Bank holidays: Italy observes national holidays, including New Year's Day, Liberation Day, and Christmas, with a total of 11 public holidays throughout the year.

Employee classification

In Italy, each industry has a National Collective Labour Agreement (CCLA) that governs the employee working relationship. Employees working through PEO Worldwide will be subject to the Tertiary sector.

Furthermore, employees will also be classed in accordance with one of the below categories. There are seven levels of classification that will determine the terms of employment and statutory benefits that each category of employee is entitled to.

Salary information

Salary Currency

Euros (€)

Salary

In Italy, employers observe a 13/14 month payroll process, as prescribed in a wide variety of Collective Bargaining Agreements.

In accordance with the CBA to which PEO Worldwide abides, the following is applicable:

Month 13 (payable in December)
Month 14 (payable in June)

Sick leave

Employees are entitled to three days of paid sick leave per year, which is to be remunerated by the employer. Italy also offers statutory sick pay to employees for up to 180 days. This is part borne by the government (INPS) and part by the employer. Employees must provide a medical certificate as justification of the illness and must be available at their place of residence to undergo a medical examination, by law.

The amount of sick pay that an employee will be entitled to will be dependent on their employment classification.

Days of leave

Employer contribution

INPS contribution

1-3

100%

4-20

50%

21-180

34%

66%

Country specific information

SOCIAL SECURITY SYSTEM

Italy has an extensive social security system which is divided into three sectors: INPS (Instituto Nazionale Previdenza Sociale), INAIL and SSN (Servizio Sanitario Nazionale – National Health Service).

The Italian social security system is funded by contributions paid by employed workers, employers, independent workers and self-employed workers, as well as through general taxation.

Those legally working in Italy are entitled to the same benefits provided by Italian social security institutions as Italian workers.

Employers are responsible for registering their staff with the INPS.

Payments to the INPS will largely go towards the National Pension Fund (approximately 33% of contributions). The remainder will be used to cover unemployment, maternity and sickness funds.

Statutory Insurances

The National Institute for Insurance against Accidents at Work (INAIL)

INAIL manages the insurance system, funded through contributions paid by employers, which protects workers in case of accidents; death in the workplace; occupational disease.

Healthcare

The National Health Service (SSN) is funded by all residents of Italy through taxes, as well as through co-payment of the cost of medicines and health services through payment of what is referred to as the ‘ticket’ and managed by the individual regions through the Local Health Authorities.

Employers Costs

Social Security

Social Security contributions will vary between 26% – 32% dependent on the work activity and seniority level of the employee.

Leaving Indemnity (TFR)

Part of the employee’s salary should be set aside as a deferred payment which the employee shall receive upon termination. This is irrespective of the cause of termination. Employees can additionally choose for the accrued funds to be allocated to a complementary pension fund.

TopSource Worldwide will provide a detailed breakdown of employer’s costs once the employee classification has been established.

Contractual provisions

Notice period

In case of termination of an employment contract with permanent duration, the employer has to provide the employee with the appropriate termination notice.

The duration of the notice period is established in the collective bargaining contracts and normally varies depending on the seniority and on the qualifications of the employee. During the notice period, the employment relationship continues and both parties should fulfil their mutual obligations: the employer continues with the regular payment of the salary and the employee shall perform his normal working activity.

Should the employer not respect the notice period, the employer shall pay a lack-of-notice indemnification equal to the amount of money he should have paid if the notice period were respected (“indennità di mancato preavviso “).

Any termination needs to be discussed prior with PEO Worldwide.

Severance Pay

Employees are entitled to a mandatory “end of service allowance” in Italy (TFR – trattamento di fine rapporto). It is payable if the employees contract is terminated, also on resignation and dismissal for just cause or death.

This is invoiced and accrued monthly by TopSource Worldwide. Please note: TFR is roughly equal to 7,41% of the yearly salary.

Contract of Employment

Contracts will be subject to a CLA (Collective Labour Agreement) dependent on the industry and classification of the employee.

Probationary Period

Probationary periods will vary depending on the employment classification. Typically, this will be up to 6 months for a managerial position and 60 working days for a non-managerial position.

Working Hours & Overtime

Collective agreements determine the maximum working hours per week, but should never exceed 40 hours per week. The numbers of working hours should be documented on the payslip.

An employee must not work more than 48 hours per week, inclusive of overtime.

Rest Breaks

Working hours are typically quite structured in Italy, often allowing a meal break of up to two hours.

Holiday entitlement

Holiday entitlement may vary dependent on the employee classification and any additional days as honoured in the CCLA.

At TopSource Worldwide, general practice is to award 26 days per year (Impiegati and Quadri) and 29 days (Dirigenti).

Employees are entitled to carry leave over for up to 18 months. Any unused leave should be paid out to employees upon termination of the contract.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Discover our payroll benefits

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in Italy

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

Understand the different types of EOR taxes
Stay up-to-date on the latest changes to EOR tax regulations
Avoid penalties for non-compliance

Speak to our team

Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013.

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Reviewed by:

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about Italian employment solutions

What is an Employer of Record in Italy?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in Italy. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in Italy?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in Italy. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in Italy?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in Italy. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.