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Hire and manage employees in Italy

As your Employer of Record (EOR) in Italy, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.
Last updated:
July 16, 2025
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Quick facts

Italy, known for its diverse economy, is a significant global player in sectors such as automotive, fashion, and manufacturing. With strong labor protections, Italian labor law regulates employment contracts, working hours, and a comprehensive social security system. Collective labor agreements (CLAs) play a significant role in setting employment standards across industries.

Employment Contracts

Italian companies offer both fixed-term and indefinite contracts. Fixed-term contracts are limited to 24 months and may be extended up to 4 years with legitimate reasons. After this period, a fixed-term contract automatically becomes indefinite. Employment terms are governed by collective bargaining agreements (CBAs) specific to various sectors.

Probation Period

The probation period in Italy is determined by collective agreements but is capped at 6 months. During probation, either party can terminate the contract immediately without providing notice or severance.

Working Hours

The standard workweek in Italy is 48 hours on average, over a 17-week period. Overtime cannot exceed 250 hours annually. A premium applies to work done at night (15% surcharge), on Sundays (30% surcharge), and on public holidays (50% surcharge).

Vacation Days

Employees are entitled to 22 days of paid leave per year, while “Quadro” employees receive 26 days. Employees also accumulate 32 hours of leave for the first two years, which increases to 56 hours after four years.

Sick Leave

Statutory sick pay begins from the fourth day of illness and can last up to 180 days per year. For the first 3 days, employees do not receive statutory sick pay unless provided by their contract. Between days 4 and 20, employees receive 50% of their average daily pay, which increases to 66.66% from the 21st day. Sick pay is recorded as an adjustment to the employer’s social security contributions.

Wages and Salary Payment

In Italy, salaries are generally paid on the 25th of each month via bank transfer. There is no national minimum wage; instead, minimum pay is specified within each sector’s CBA. Many employees also receive a 13th-month salary as a Christmas bonus, with some sectors granting a 14th-month salary in the summer.

Public Holidays

Italy observes 11 national holidays plus 1 regional holiday. Major holidays include:

  • January 1: New Year’s Day
  • April 25: Liberation Day
  • May 1: Labor Day
  • December 25-26: Christmas

When a holiday falls on a Sunday, it is observed on the following Monday, or employees receive additional pay.

Employer Taxes

Employers in Italy contribute approximately 30% of the employee’s salary toward social security, which covers pensions, healthcare, and other mandatory benefits.

Employee Taxes

Employee social security contributions total 10% of gross salary. Personal income tax rates in Italy are progressive, ranging from 23% to 43% based on income:

  • Up to €15,000: 23%
  • €15,001 to €28,000: 25%
  • €28,001 to €50,000: 35%
  • Over €50,000: 43%

Notice Period

The notice period varies depending on the employee’s role:

  • Level 1–7 employees: 30 days from either party
  • Quadro employees: 60 days from the employer, 45 days from the employee

Notice periods commence from the 15th or end of the month.

Termination and Severance Pay

Termination requires a justified reason, such as a contract breach or economic necessity. Employers must set aside 7% of the employee’s salary annually as end-of-service compensation, known as TFR (trattamento di fine rapporto). TFR is paid out upon termination, regardless of the reason.

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Frequently
Asked
Questions

What is International EOR and PEO?

International EOR (Employer of Record) and PEO (Professional Employer Organization) are services that enable businesses to compliantly hire, manage, and pay employees in foreign countries without the need for establishing a legal entity. EOR acts as the legal employer while PEO co-employs workers, handling administrative tasks such as payroll, taxes, and benefits.

Does Acvian handle time record submissions?

Acvian does not handle time record submissions directly. It is the client’s responsibility to track and submit employee work hours. However, Acvian can offer guidance and best practices to ensure efficient time tracking and compliance with local labor laws.

How can employees view their payroll details?

Employees can view their payroll details through the monthly payslips they receive and also via our Acvian platform. These payslips contain information on earnings, deductions, taxes, and net pay, giving employees a clear overview of their monthly payroll. Please note that in some countries, employers are restricted from viewing payslips due to data protection regulations, and only employees can share their payslips. For more details on these regulations, please contact our specialists.

How Acvian handles payroll disputes?

Acvian addresses payroll disputes promptly, working closely with both the client and the employee to investigate and resolve any issues.

Does Acvian require advanced monthly payments of salaries and service?

Yes, Acvian requires advanced monthly payments for salaries and service to ensure timely and accurate payroll processing.

Can Acvian provide consultations regarding a labor and tax legislation?

Yes, Acvian can provide consultations regarding labor and tax legislation. Our team of experts is well-versed in local regulations and can offer guidance to help your business maintain compliance, reduce risk, and navigate the complexities of international employment and taxation laws.

Which benefits does Acvian provide?

Acvian provides a diverse range of benefits, including but not limited to:

  • Health insurance
  • Car leasing
  • Gym allowance
  • Per diem compensation
  • Maternity leave

We can customize and offer many kinds of benefits requested by the client, ensuring that your employees receive the support and perks that align with your company culture and local regulations.

Can Acvian provide private health insurance?

Acvian can provide private health insurance options as part of its comprehensive employee benefits package.

What would the monthly/yearly costs for the employee be?

The monthly/yearly costs for an ‘average’ package vary depending on the specific plan and location. See our estimated price packages here. Acvian’s team can provide detailed cost breakdowns based on your requirements.

Can Acvian help with entity set up?

While Acvian doesn’t directly provide entity set-up services, we can introduce you to local lawyers who specialize in this area to assist you with your needs. See also, when it's better to set the entity or use the EOR.

Offboarding: how it is handled?

Offboarding is managed by Acvian in a structured and compliant manner. We coordinate with your business to ensure all necessary documentation, exit interviews, and final payments are completed. Acvian also ensures adherence to local labor laws and regulations, including providing any required notice periods and managing the termination process.

When does business need it?

Businesses typically need EOR and PEO services when they:

  • Expand into new international markets.
  • Hire remote employees in foreign countries.
  • Seek to streamline global workforce management.
  • Aim to ensure compliance with local labor laws and regulations.
  • Want to reduce the time and cost of establishing legal entities abroad.

Is Acvian compliant with GDPR?

Yes, Acvian is fully compliant with GDPR regulations. We collect and process personal data in accordance with the law, ensuring that data is used only for general, allowed purposes such as marketing and other legitimate business activities.

Where can Acvian supply EOR services?

Acvian can supply EOR services in over 180 countries, encompassing almost all European nations, the United States, and Canada, providing extensive coverage to support your business’s global expansion and workforce management needs. See our coverage here.

How does payroll work under EOR?

Under EOR, Acvian manages the payroll process by:

  • Acting as the legal employer of your foreign workforce.
  • Handling salary calculations, deductions, and disbursements.
  • Ensuring compliance with local tax and labor laws.
  • Managing payroll taxes, social contributions, and benefits.
  • Providing timely and accurate payroll processing for your employees.

Explore the details here.

Can you provide support for expatriate EOR workers?

Yes, Acvian provides comprehensive support for expatriate EOR workers, including:

  • Visa and work permit assistance.
  • Relocation and housing support.
  • Local registration and compliance.
  • Payroll and tax management.
  • Coordination of benefits and insurance coverage.

Explore in details here.

What are the details of expats support?

Expats support from Acvian encompasses a range of services designed to facilitate a smooth transition for employees working abroad. Key aspects include:

  • Assistance with visa and work permit applications, renewals, and compliance.
  • Support for relocation, including housing, schooling, and local registration.
  • Guidance on local tax regulations and filings.
  • Coordination of locally compliant benefits and insurance coverage.
  • Ongoing support for any changes or issues that may arise during the expatriate assignment.

What happens after onboarding?

After onboarding, Acvian maintains an ongoing relationship with your business and employees, ensuring smooth payroll processing, managing tax and regulatory compliance, handling benefits administration, and providing support for any changes or issues that may arise in the employment lifecycle. This allows you to focus on your core business operations while Acvian manages your international workforce.

How many days will it take for our personnel to be onboarded?

The onboarding process typically takes between 2 to 4 weeks, depending on the country and complexity of the employee’s situation. However, Acvian strives to expedite this process, ensuring a smooth and efficient transition for your personnel. See our story of the urgent employment project.

Does Acvian provide in-country support for employee inquiries or assistance requests?

Yes, Acvian provides in-country or regional support for employee inquiries and assistance requests. We have dedicated managers in the countries where we support your employees, ensuring prompt and knowledgeable assistance tailored to local regulations and practices.

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