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Mercans CountryIntel ® Italy Payroll And HR Insights

Mercans offers complete payroll, PEO and HR services in Italy

One of the three key economies within the Eurozone, Italy presents a strategic gateway into Europe with its extensive transport network and strategic ports. Italy is also the second largest manufacturing economy in Europe and the fifth largest globally. It is particularly attractive for its skilled workforce thanks to an overall better cost performance compared to other European countries. Additionally, Italy ranks fifth in the EU for its contribution to high tech and medium tech products.

Doing Business in Italy

There is increased private expenditure in R&D and open innovation between mature companies and high-end startups. Industry is further supported by educational and vocational training programs, competence centers and digital innovation hubs

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Italy is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.

Banking

Banking Hours: 8.30 am to 4:40 pm from Monday to Friday.

Working Week

The standard working week is from Monday to Friday from 8:00 am - 1:30 pm and then 3:00 pm - 6:00pm.

Labor Law

Substantial reform of the labor market has been undertaken in recent years to create a modern, competitive business environment. The Civil Code brings together the main civil law rights and addresses the employment relationship.

Main Industries

Tourism, machinery, robots, aircraft, electronics, defense systems, iron and steel

GDP Growth

0.1%

Dates & Numbers

dd/mm/yyyy

Official State Name

Italian Republic

Population

59.64 million

Capital

Rome

Major Languages

Italian

Currency

Euro (EUR)

Internet Domain

.it

International Dialing Code

+39

Italy
Florence, IT
10:41 am, December 2, 2022
7°C
broken clouds

Payroll

Pay and work conditions for the majority of Italian employees are set by collective agreements. The minimum wage rates are set by industry-level agreements.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for 5 years

Reports

Employees receive paid annual leave of 26 days

Annual Leave

Employees receive paid sick leave of 21 days

Sick Leave

5 months of paid maternity leave and 10 days of paid paternity leave

Maternity & Paternity Leave

30 days notice is required

Employee Termination

Salary is paid in 13 monthly installments. The additional 13th installment (“tredicesima”) is paid out each year alongside the December salary

13th month salary

There is no mandatory minimum rate of pay. Employers usually set minimum wages for each contractual level in the relevant national collective agreements

Minimum Wage

Overtime payment must be more than the regular rate and is as set in the National Collective Agreements (NCA)

Overtime

Employees are entitled to severance payment Trattamento di Fine Rapporto (TFR) which must be paid out within 6 months of leaving the company

Severance Pay

Tax and Social Security

Individuals are subject to national income tax, regional income tax and municipal income tax. Social security contributions are due from both employers and employees. The employer is required to register with the Italian Social Security Administration.

Tax

Tax liability is computed on a progressive rate and while both Italian residents and non-resident individuals are subject to tax in Italy, each will be on a different basis. Tax residents are liable to pay income tax on their income wherever it is produced.

24%

Corporate Income Tax

34%

Personal Income Tax

22%

Sales Tax

22%

VAT

Social Security

The total social security rate is approximately 40% of the employee’s gross compensation with around 33% of the total paid into the National Pension Scheme and the rest paid into a few funds for unemployment, sickness, maternity, temporary unemployment compensation and more.

39.4%

Social Security Rate

30%

Social Security Rate for Employers

9.4%

Social Security Rate for Employees

Employment Law

The probation period of six months is statutorily set. Employers are also required to employ a certain number of people with serious disabilities.

Employment Agreement

In terms of contracts, employees may work on an ‘intermittent work’ basis where they work on call as needed or on a fixed term contract. The latter are typically for a one year duration but may be renewed.

Working condition

Employees are not to work over 48 hours per week and generally are to be granted a rest break after six hours of work. Employers also have numerous obligations in terms of protecting health and safety at work.

Leaves

Employees are entitled to four weeks of annual leave per year. There is also a variety of leave types and time to provide care or deal with family matters.

Employment termination

Employers must not dismiss or discriminate against employees because of their trade union membership or activities (such as strikes).

30 days

Minimum notice period for terminating an employee

11 days

Total number of public holidays

40

Working hours per week

28 days

Total number of days for Compassionate & Bereavement Leave

Immigration

Foreign nationals who wish to renew their residence permit must file an application with the local police department in the province where they reside within 90 days of the expiry date of the permit; within 60 days for annual work; and within 30 days for all other types of residence permits.

Residency permits

Individuals who enter Italy for a period of 1 year or more will be required to sign an integration agreement and the permit is issued by the local police headquarters. Work permits typically last for two years and are renewable.

Work Permit Validity

Two years

Required Documents

signed employment contract

the original Nulla Osta and an additional copy

passport with at least two blank pages that is valid for at least three months after the visa’s duration

passport pictures

completed Italian Long-Stay Visa Application form

proof of sufficient financial means, accommodation in Italy, and receipt for the payment of visa fee

diplomas and other qualifying certificates.

Compliant, reliable, error-free and touchless payroll in Italy

Build the best team and hire top talent compliantly in Italy. Get in touch with Italy payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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