Italy has the 3rd largest economy in Europe and strong sectors in the business, agriculture, and manufacturing industries. Companies have many opportunities for starting a business or expanding in Italy, but managing payroll can pose challenges. It’s important to identify statutory payroll requirements and benefits before hiring employees in Italy.

Payroll and Tax Considerations

  • There is no set minimum wage, but the National Collective Labor Contracts provide guidance on pay
  • Any hours worked over 40 hours per week are considered overtime and are restricted to 2 hours max per day
  • National income tax is progressive and ranges from 23-43%. Employees may also be subject to regional and municipal taxes
  • Employment contracts for an indefinite time period are the most common type in Italy
  • Minimum age for employment is 15 years. Minors younger than 15 may be allowed to work in cultural, artistic or entertainment activities with written consent from a legal guardian

HR and Statutory Requirements

  • Employees are entitled to at least 4 weeks of paid leave after one year of continuous service. At least 2 weeks of leave must be taken in the year it was accumulated
  • Female employees are entitled to 20 weeks maternity leave, typically split between 8 weeks before and 12 weeks after birth. A new mother can also choose to take up to 6 months of unpaid leave
  • Paternity leave is 10 days, but the law allows the father to be absent from work for the entire maternity leave in cases of serious illness or death of the mother
  • Severance benefits must be paid when a contract is terminated, even for just cause

Due to the ongoing COVID-19 crisis, Italy has revised their sick leave policies:

In case of sickness related to COVID-19 at home or in the hospital, Social Security is treating sick leave based on standard regulations. For the first 3 days of sick leave, the employee is entitled to full pay from the employer. After 3 days, sick leave benefits are paid out by the National Health Service as follows:
•  The employee is entitled to 50% of their regular pay for the first 20 days
•  After the 20 days, the employee is entitled to 66.6% of their regular pay

New anti-COVID protocol as of April 2021 include the following measures to contain the spread of COVID-19 in the workplace:

  • Order closure of all departments whose operation is possible through remote work
  • Adjust production levels
  • Creating groups for production to minimize contacts
  • Use remote work for all business activities possible
  • Contingency plans to cover the operations of the entire company structure with rotating personnel if necessary
  • Workers must show negative test result when returning to work after being infected
  • Vaccines in the workplace if possible

Foreign worker requirements:

  • EU citizens and employees from Norway, Iceland, or Liechtenstein do not require work visas, but need to apply for residency in the town they are residing if staying longer than 90 days
  • All other foreign workers must get a visa, residence permit, and worker permit in order to gain employment
  • The type of visa varies depending on nationality, home country, duration of stay, and more

Holidays in Italy

  • January 1 – New Year’s Day
  • January 6 – Epiphany
  • April 17 – Easter Sunday
  • April 18 – Easter Monday
  • April 25 – Liberation Day
  • May 1 – Labor Day / May Day
  • June 2 – Republic Day
  • August 15 – Assumption of Mary
  • November 1 – All Saints’ Day
  • December 8 – Feast of the Immaculate Conception
  • December 25 – Christmas Day
  • December 26 – St. Stephen’s Day

If you are managing employees in Italy, or thinking about expansion, we can help. Blue Marble has one platform to manage employee payroll in 150+ countries. With cloud-based technology and customized monthly reporting, you can easily manage payroll in real-time across all countries and currencies. Talk to us today about simplifying your payroll and compliance in Italy – click here to get started