Explore our EOR & PEO services in ITALY

As your EOR in Italy, we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.


Your candidate is hired by a PEO in Italy provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.

Acvian Italy EOR
Milan Acvian

Country Overview

Italy is a country located in southern Europe, sharing borders with France, Switzerland, Austria, and Slovenia to the north, and with the Mediterranean Sea to the south. Known for its rich history, beautiful landscapes,. and world-renowned cuisine, Italy is a popular tourist destination. The nation has a population of approximately 60 million people, with Rome as its capital and largest city. Italy’s economy is diverse, including well-developed manufacturing, services, and agricultural sectors. Major industries include automotive, fashion, food processing, and pharmaceuticals.

General Information

  • Population: ~60.000.000


  • Capital City: Rome (population: ~2.800.000)


  • GDP: ~$2 trillions


  • GDP per capita: ~$33.000
  • Currency: Euro (EUR)


  • Unemployment: ~9.5%


  • Employer Taxes: ~32.4%


  • Employee Taxes: 23% – 43%


Employment Contracts in Italy

Employment contracts can be oral or written, but a written contract is strongly recommended to clearly establish the terms and conditions of employment. Employment contracts should specify details such as the job description, place of work, working hours, salary, and start date. Contracts can be for a fixed term or an indefinite duration. Fixed-term contracts can be extended or renewed, but the total duration should not exceed 36 months, with some exceptions.

Probation Period in Italy

Italian labor law allows for probation periods for new employees. The  maximum length of a probation period varies depending on the employee’s position, with a general maximum of six months for white-collar workers and three months for blue-collar workers. During this period, either party can terminate the employment relationship without notice or severance pay, provided that a valid reason for termination is given.

Working Hours in Italy

The standard working hours are 40 hours per week, typically divided into five 8-hour workdays. Overtime work is allowed but should be compensated at a higher rate, as established by the applicable collective bargaining agreement.. Employees are entitled to a daily rest period of at least 11 consecutive hours and a weekly rest period of at least 24 consecutive hours, usually on Sunday.

Vacation Days in Italy

There’s a minimum of 20 days of paid annual leave per year, which can increase based on factors such as the employee’s age, work experience, and the nature of their job. Unused vacation days can be carried over to the following year, but employees are encouraged to use their leave within the current year.

Sick Leave in Italy

Italian employees – get sick leave, which is covered by the country’s social security system (INPS). During sick leave, employees receive a percentage of their average salary, paid by INPS, starting from the fourth day of absence. The percentage varies based on years of service, ranging from 50% to 66.6%. Employers may supplement the INPS payment up to 100% of the employee’s salary, as provided by the applicable collective bargaining agreement.

Wages and Salary Payment in Italy

The minimum wage is not set by the government but is instead determined by industry-specific collective bargaining agreements. Salaries must be paid at least once per month, and employers are required to provide pay statements detailing the calculation of wages, tax deductions, and social security contributions.

Public Holidays in Italy

Italy observes 12 national public holidays, during which employees are entitled to a day off with regular pay. Some of the notable holidays include New Year’s Day, Easter Monday, International Workers’ Day, and Christmas Day.. If a public holiday falls on a weekend, it is generally not transferred to the following workday.

Employer Taxes in Italy

Employers in Italy are required to contribute to various social security programs on behalf of their employees. These contributions include pension insurance, health insurance, and unemployment insurance. The total employer contributions amount to approximately 28-32% of an employee’s gross salary, depending on the sector and employee’s occupation.

Employee Taxes in Italy

Employees are subject to personal income tax, which is levied on a progressive scale, ranging from 23% to 43%. Additionally: employees must contribute to social security programs, including pension insurance, health insurance, and unemployment insurance. The total employee contributions amount to approximately 9-10% of their gross salary. These deductions are withheld at the source, and employers are responsible for submitting the payments to the relevant authorities on behalf of their employees.

Notice Period in Italy

The notice period for terminating an employment contract depends on the employee’s years of service and the applicable collective bargaining agreement. Generally, the notice period ranges from 15 days for employees with less than two years of service to three months for those with over 20 years of service. The notice period can be extended by a collective agreement or an individual employment contract but it cannot be shorter than the legal minimum.

Termination / Severance in Italy

Termination of an employment contract in Italy can be initiated by either the employer or the employee. Employers must provide valid reasons for dismissal, such as misconduct, incapacity, or redundancy. In case of redundancy, employers are required to pay severance to the affected employees, known as TFR (Trattamento di Fine Rapporto). The severance pay is calculated as 7.41% of the employee’s total annual remuneration, including bonuses and overtime, for each year of service. If the employee initiates the termination, they are not entitled to severance pay.

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