Employing in Italy

An employer of record, sometimes known as an international PEO can help you quickly hire and onboard workers in Italy – often with just two weeks’ notice. Establishing your own local entity without risk and saving costs, this type of service makes an EOR in Italy worth checking out!

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.

Dirigenti are the highest category of employee, defined in Italy by specific collective agreements. This includes employees who are responsible for running the company or managing an independent part. Dirigenti also include certain employees with very high-level technical, scientific and/or professional qualifications.
A Quadro carries out managerial tasks and reports to a dirigente. He / she has a significant degree of autonomy and is directly responsible for the tasks, projects and staff (if assigned line manager responsibilities).Funzionari normally are on the upper side of this professional category. All managers in general belong to this professional category: finance managers, operations managers, marketing managers, shop managers, events managers, site managers, etc.
An impiegato/a reports to a quadro (or to a dirigente when employed by SME) and carries out office-related tasks and projects.

Salary Information

Salary Currency

Euros (€)

Salary Pay Date

Salaries are paid monthly. Many companies will adopt a fixed pay date; however, there is no legal obligation.


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)

Holidays & Leave

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

Maternity Leave

Pregnant female employees are entitled to 5 months’ maternity leave, from the second month prior to the due date to the third month after birth. Employed mothers are obliged by law to take a period of absence following the birth of a child.

Throughout their maternity leave, women are granted maternity pay equal to 80% of their last salary.

This payment is paid by the employer, but is claimed back through the INPS. In addition, female employees may also take an optional additional six months following the expiration of the mandatory leave.

Paternity leave

Seven days of paid parental leave are granted to partners following the birth of a child. This may be taken separately for within five months of the child’s birth.

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.

Country Specific Information


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.


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.

Public holidays

In addition to annual leave, there are 11 statutory public holidays in Italy. If a public holiday falls on a Sunday, the day is carried over to Monday or paid.

1st January
New Year’s Day (Capodanno)
6 January
Epiphany (Epifania)
18 April
Easter Monday (Lunedì di Pasqua)
25 April
Liberation Day (Liberazione dal nazifascismo)
1 May
Labour Day (Festa del lavoro)
2 June
Republic Day (Festa della Repubblica)
15 August
Assumption Day (Assunzione di Maria)
1 November
All Saint’s Day (Ognissanti)
8 December
Immaculate Conception (Immacolata Concezione)
25 December
Christmas Day (Natale)
26 December
St. Stephen’s Day (Santo Stefano)

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At TopSource Worldwide, we work with local experts to help you navigate the various admin and cost obstacles you may come across along your expansion journey

To find out how we can help your business with our employment solutions, contact us today.