Employer Record in Italy

Basic information

Capital:Rome

Time zone: GMT+1

Languages: Italian

Currency code: EUR

Human Resources at a Glance 

Contract Terms

Contracts must be in Italian and can be bilingual. To prepare the employment agreement, the employee will have to provide information about their previous employment to select the classification that can be dirigenti, quadri, or impiegato. They must be in writing and signed by both parties.

  A contract must include:

• Name
• Start date
• Length of the employment
• Job description
• Category of the employee
• Termination conditions

Guidelines Regarding Probation Period/Trial Period

Probation periods are not mandatory. There is no minimum probation period. The maximum probation period is 180 days (6 months).

Regulations and Rules Regarding Working Hours

Standard working hours are 8 hours per day, 40 hours per week. The standard workweek is from Monday to Friday.

Overtime is paid according to the following rates

Overtime payment is mandatory. Hours outside of standard work hours are considered overtime. Employees can work a maximum of 250 hours of overtime per year. For additional hours, employees are paid:

• 150% of the hourly rate, the first 8 hours.
• 200% of the hourly rate, the following hours.
• 150% of the hourly rate for overtime night work excluding regular duty shifts (from 10 pm to 6 am)
• 130% of the hourly rate, on holidays and Sundays.
  Dirigente employees are not entitled to overtime pay.

Minimum Wage Requirements

The Italian Labour Law stipulates that all employees working in Italy should be entitled to a minimum wage of at least €7.50 per hour.

Payroll Cost for Employers

The employer cost is generally estimated at 38% of the employee salary. For employees classified in the Dirigente category, an additional estimated EUR 1,341.84 must be paid.

• Social Security – 23.81%
• National Sickness Benefits Contribution – 2.44%
• National Maternity Benefits Contribution – 0.24%
• Termination Severance Funds (TFR) – 6.91%
• Termination Severance Fund (TFR) Guarantee Contribution – 0.20%
• Unemployment Insurance – 1.61%
• Work Accident Insurance (INAIL) – 0.40%
• Subsidized Furlough Fund (FIS) – 0.53%
• Subsidized Furlough Fund (CIGS) – 0.60%
• Family Allowance (CUAF) – 0.68%
• 13th Salary – 8.33%
• 14th Salary – 8.33%
  Please note: 13th and 14th salary are paid monthly and included in the employee’s gross annual salary. One-off Costs
• Onboarding Medical Check – EUR 119
• Health&Safety Training – EUR 42
• Health&Safety Training (English) – EUR 54 Additional Costs For Dirigente Employees
• Private Pension – Fondo Mario Negri – EUR 634.70
• Supplementary Private Pension – Fondo Mario Negri – EUR 132.76
• Supplementary Health Insurance – Fondo Mario Besusso – 5.81% + 2.56% of 3,828.33
• Private Pension – Fondo Pastore – EUR 358
• Tertiary Management Training Fund – EUR 24

Termination

Grounds

Terminations must respect complex rules and the rules of an employee’s employment country. The off-boarding is always handled by the Employer with the primary stakeholders. It may include ad-hoc fees as well as required or recommended steps on specific termination cases.
Terminations in Italy can be complex. In exceptional cases, there is at-will termination in Italy for employers outside the probation period and generally, the termination must be done for just cause.
Compliant terminations include:

• Voluntarily by the employee
• By mutual agreement
• Unilaterally by the employer based on:
  • Probation period
  • Objective grounds
  • Disciplinary dismissal
  • Without cause (exceptional cases)
• By the expiration of the contract

Notice Period

The minimum notice period is 30 days and will be increased according to the length of the employment, category of the employee, and type of termination.
Termination by the employee – executive managerial positions (Quadri and Level I)

• 45 days if the length of service is up to 5 years
• 60 days if the length of service is more than 5 years and up to 10 years
• 90 days if the length of service is more than 10 years
  Termination by the employee
• 20 days if the length of service is up to 5 years
• 30 days if the length of service is more than 5 years and up to 10 years
• 40 days if the length of service is more than 10 years
  Termination by the employer – executive managerial positions (Quadri and Level I)
• 60 days if the length of service is up to 5 years
• 90 days if the length of service is more than 5 years and up to 10 years
• 120 days if the length of service is more than 10 years
  Termination by the employer
• 30 days if the length of service is up to 5 years
• 45 days if the length of service is more than 5 years and up to 10 years
• 60 days if the length of service is more than 10 years

Severance compensation

In Italy, there is no severance pay or redundancy compensation as such. However, upon the termination of the employment relationship, the employee receives the so-called TFR (Trattamento di Fine Rapporto), which is a part of workers’ wages whose payment is deferred upon the termination of the employment relationship.
Hence, it cannot be considered proper severance pay, since it is constituted by a certain amount of salary set aside each month.
The TFR is calculated according to the formula of a year’s overall salary divided by 13.5, plus 1.5% for each year of service plus compensation for inflation.
The TFR must be paid to the worker in any case of termination of the employment relationship.

Payment & leave Compensation & Holidays

SalaryPayment

Monthly

Payslip Payroll

Italian payroll regulations require employers to provide employees with a detailed pay slip (CUD) for each pay cycle, listing total pay, deductions, net pay, and any additional benefits or allowances, and employers are required to provide all employees with two original CUD documents for the previous year’s report. The annual deadline is February 28. The Ministry of Finance issues an updated CUD every year so that it can be updated to absorb changes related to the implementation of new tax regulations.

Regarding the declaration of pay slips, the pay slips must include the following:

Monthly Payroll Return (CUD) : Employers must prepare and file a return of wages paid and taxes withheld for each employee as an annual statement of the employee’s tax return. The CUD filing deadline is 28 February each year for the following tax year

Annual Return of Employee Income (Model 770) : Employers must file an annual return summarizing the total amount of wages paid and taxes withheld by all employees

Employment Contract Communication (UniLav) : When hiring, modifying or terminating an employment contract, the employer must communicate these changes to the authorities using the UniLav system

Other Statements and reports: Depending on the circumstances, employers may be required to file additional reports or statements related to employment, such as those relating to apprenticeships, internships, or other specific categories of workers

Annual Leave

Full-time employees are entitled to 20 working days of paid time off (PTO) a year. PTO accrues monthly at 1.67 days per month. Employees are allowed to take at least 10 working days in a row.

PTO for part-time employees will be calculated according to the weekly working hours.

Sick Leave

Employees are entitled to paid sick leave for up to 180 days. This leave is paid at different rates and by different payers depending upon length:

Period	Pay	Payer
0 – 3 days	100% of base salary	Employer
4 – 180 days	70% of base salary	Social Security

Maternity & Parental Leave

Pregnant employees are entitled to five months of paid leave. 60 days must be taken before the child’s birth. The employee will receive 100% of the salary during this period, 80% paid by Social Security and 20% by the employer.

The employee can’t extend maternity leave but can take parental leave.

Employees are entitled to 11 months of parental leave, which can be taken until the child reaches 12. Both parents can decide how to distribute the time off, which should be taken after paternity and maternity leave.

Either parent can take parental leave. Social Security (INPS) will pay 30% of the salary during this period.

Parental leave can’t be extended.

Tax and Social Security Information

Personal Income Tax

The individual income tax ranges from 0% to 43%. Income tax is calculated according to progressive rates. Multiple additional factors may impact overall rates such as the household status and the number of children.

Gross Annual Income	Tax Rate (%)
Up to EUR 15,000	23%
Up to EUR – 28,000	27%
Up to EUR – 55,000	38%
Up to EUR – 75,000	41%
Over EUR – 75,000	43%

Social security

• Public Health Insurance
• Unemployment Insurance
• Worker Compensation Accident Insurance
• Private Healthcare – Unisure (optional)
• Private Healthcare – Allianz (optional)

Public Holidays 2024

Holidays	Date
New Year’s Day	1.1
Epiphany	1.6
Easter Sunday	4.20-4.21
Liberation Day	4.25
Republic Day	6.2
Assumption of Mary	8.15
All Saints’ Day	11.1
Feast of the Immaculate Conception	12.8
Christmas Day	12.25
St. Stephen’s Day	12.26