What you'll learn
- Country Introduction
- Tax Breakdown for Employers
- Statutory Leave Laws
- Minimum Wage and Working Hours
- Termination Process
- Additional Information
Italy is a country in Europe bordered by France, Switzerland, Austria, Slovenia, and the enclaved states of Vatican City and San Marino. The country consists of a peninsula delimited by the Alps, as well as several islands surrounding it. Italy is considered one of the world's most culturally and economically advanced countries in the world, ranking very highly in life expectancy, quality of life, healthcare, and education.
Paid Leave and Statutory Leave
Parental Leave
Pregnant employees in Italy are entitled to 5 months of paid maternity leave, which is usually taken as 2 months before the due date and 3 months after the birth. The employee is entitled to 80% of their salary during this leave, which is paid by the employer and then reimbursed by social security.
New mothers can also take up to 6 months of unpaid leave after their maternity leave. Fathers are entitled to paid paternity leave for 10 days within 5 months of their child’s birth.
Sick Days
Employees are entitled to paid sick leave, of which the first 3 days are paid for by the employer at 100% of the salary, and the rest is shared between the employer and social security. Any bouts of sickness after the 3rd one in the same year are unpaid.
Paid Leave
There are 11 national holidays in Italy, and employees are entitled to 4 weeks of paid time off each year accrued at 1.67 days per month.
Wage Requirements and Working Hours
While there is no statutory minimum wage in Italy, each sector sets a minimum wage. The standard work hours are 8 hours per day for 40 hours per week. Overtime is regulated by contracts and collective agreements.
Termination Process
Process
Terminations of employment contracts must be justified and with notice, unless there is a mutual agreement that the employee is not fulfilling work duties, or is guilty of misconduct, or due to economic factors.
Notice Period
The notice period depends on who initiated the termination. If the employer terminates the contract, 30 days of notice is required for employees and 60 days for managers. If the employee terminates the contract, 30 days of notice is required for employees and 45 days for managers.
Severance Pay
Severance pay comes from the TFR severance fund that employers pay into each month. It’s calculated according to the year’s overall salary divided by 13.5, plus 1.50% for each year of work plus accounting for inflation.
Additional Information
Employees in Italy are entitled to a 13th month bonus equal to 1 month of salary, usually paid out in December. Some employers also choose to pay a 14th month salary in June. Italy has their own "lavoratori impatriati" tax scheme, which is a program that offers tax incentives to qualified individuals to encourage the movement of "human capital" to Italy.
★ 32% - Social Security
★ 0.4% - Work Injury Insurance (INAIL)
★ 7.4% - TRF Severance
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It can be prohibitively expensive to establish an entity in every country you want to hire talent in, so Remofirst will hire and pay your employee on your behalf while you manage their daily duties. Remofirst will handle formal HR procedures and employment contracts that adhere to local laws, so that you can simply approve invoices via our platform. When you work with an Employer of Record (EOR) you can compliantly hire the best employees around the world.
Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.
