Back

Payroll and Benefits Guide Italy

Last updated: May 09, 2023

Currency
Euro (EUR)
Employer Taxes
29.40% - 41.00%
Payroll Frequency
Monthly
Employee Costs
10.00%
Capital
Rome
Date Format
dd/mm/yyyy
Fiscal Year
1 January - 31 December
video poster

Contribution

Employer Employer Payroll Contributions
29.00% – 32.00%
Social Security (including pensions, disability and survivors’ benefits, sick leave, maternity, paternity, parental leave)
0.40%- 1.00%
Injuries at Work Insurance (INAIL)- varies by Occupation
8.00%
TFR (severance pay)
29.40%-41.00% Total Employment Cost
Employee Employee Payroll Contributions
10.00% Social Security
10.00%
Total Employee Cost
Employee Income Tax
23.00%
Up to 15,000 Annually
25.00%
15,000 – 28,000 Annually
35.00%
28,000 – 50,000 Annually
43.00%
Over 50,000.01 Annually
1.23%-3.33%
Regional Tax
0.00%-0.90%
Municipal Tax

Employer taxes

Highest
Lowest

Employee taxes

Highest
Lowest

Minimum Wage

General

There is no statutory minimum wage in Italy. The sector usually sets minimum wages for each contractual level in the relevant national collective agreements (NCAs).

MINIMUM WAGE (PER MONTH)

Highest
Lowest

Payroll

Payroll Cycle

The payroll cycle in Italy is generally monthly and is paid on the 27th of each month.

13th Salary

Under Italian law, salary calculations are paid in 12 monthly installments. The additional 13th installment (“tredicesima”) is paid out each year alongside the December salary.
Some NCAs also include a 14th monthly installment, normally paid in June.

Working Hours

General

Standard working hours in Italy are 8 hours per day, 40 hours per week.

Overtime

All work more than the standard working hours per week is to be paid as overtime and is regulated by employment contract/collective agreements, etc. In general, overtime maximum limits paid are as set in the NCA.

Leave

Annual Leave (vacation)

Minimum leave is determined by the applicable collective agreement, which generally provides paid annual leave of not less than four weeks per year.

Public Holidays

If a public holiday falls on a Sunday, the day is carried over to Monday or paid in lieu.
In addition to the below national holidays there may be regional holidays that workers are also entitled to take off.

Date Day Holiday Notes
1 Jan 2024 Monday New Year’s Day
 6 Jan 2024 Saturday Epiphany
31 Mar 2024 Sunday Easter Sunday
 1 Apr 2024 Monday Easter Monday
25 Apr 2024 Thursday Liberation Day
 1 May 2024 Wednesday International Workers’ Day
 2 Jun 2024 Sunday Republic Day
 15 Aug 2024 Thursday Assumption Day
1 Nov 2024 Friday All Saints’ Day
8 Dec 2024 Sunday Immaculate Conception
25 Dec 2024 Wednesday Christmas Day
26 Dec 2024 Thursday St Stephen’s Day

Sick Days

Employees in Italy are entitled to paid sick leave, paid for by the employer and subsequently the government.
For the first two periods of sickness per year, the employer pays the first three days at 100.00% of the regular salary rate of pay. This reduces to 66.00% for the third period of sickness and 50.00% for the fourth. Any subsequent sickness in one year is unpaid.
The employee continues to receive 100.00% of the regular salary rate of pay from the fourth day onwards, paid as 50.00% by the employer and 50.00% by the Italian government from days 4 to 21. From day 22 onwards, the government pays 66.00%, and the employers’ payment reduces to 34.00%. Employees are required to provide a medical certificate from a doctor from the first day of their illness.

Maternity Leave

All female employees are entitled to 5 months of paid maternity leave, generally taken two months before the due date until three months after childbirth. The maternity leave before the due date can start at an earlier date than two months if the employee’s work is dangerous for her health or that of the unborn child or delayed until after childbirth.
The employee is entitled to 80.00% of her regular salary during maternity leave, which the employer pays and is subsequently reimbursed by the INPS.
In addition, a new mother can take up to six months of unpaid leave after maternity leave. Alternatively, if a mother chooses not to take parental leave after maternity leave, she can work 6 hours a day until the child is one year old.

Mothers whose income was lower than 8,145 EUR prior to maternity leave will have their maternity indemnity increased by three months.

Paternity Leave

The father is entitled to receive 100.00% of the regular salary and compulsory paternity leave of 10 days within five months of the child’s birth.

Parental Leave

In Italy, an employee can take up to 10 months of unpaid parental leave.

With effect from 1st January 2023, the government issued a new law that introduces an extra month of parental leave, paid with an allowance equal to 80% of the employee’s salary. This month of enhanced parental leave must be used, alternatively by either parent, before the child reaches the age of six.

Other leave

Bereavement Leave – In the event of the death or serious illness of a family member (up to the second degree), paid leave is granted up to a maximum of 3 days per year. The days of leave may be used by the employee within seven days of the death.

The worker is required to document the event with the relevant certification, the worker must inform the employer in advance of the event giving entitlement to the leave and the days on which it will be used.

Wedding Leave – Employees are eligible for a one-time period of 15 calendar days in the event of marriage.

Vacation Days
Public Holidays
Highest
Lowest

PAID MATERNITY LEAVE (DAYS)

Highest
Lowest

Termination

Termination Process

Termination must be justified, with notice, and per the NCA, unless it is through a mutual agreement that the employee is not fulfilling work requirements, has performed serious misconduct, or that the termination is due to economic factors.

Notice Period

In Italy, the notice period is dependent upon the party that initiated the termination, whether it is the employer or the employee.  The length of the notice period is determined by the applicable NCBA, the length of the employment and the classification of the employee. According to some of the major NCBA in Italy, If the employer decides to terminate the contract, the notice period can range from 30 days to 12 months. However, if it is the employee who resigns, the length of notice required will vary from 30 days to 4 months.

Severance Pay

In Italy, severance pay is applicable if the employer made the termination for authorized causes. Upon termination, the employee must be paid the TFR (Trattamento di fine rapporto), which the employer defers each month. The TFR is calculated according to the formula of a year’s overall salary divided by 13.5, plus 1.50% for each year of service plus compensation for inflation.

Probation Period

Statutory probation periods in Italy are set per the job role of the employee. For employees with no managerial responsibilities, the probation period is three months, whereas for all other employees/managers/supervisors, etc., the probation period is six months.
However, the probation period is commonly set in the relevant NCAs and possibly longer.

Common Benefits

  • Mobile phone allowance, approx. 100.00 EUR
  • Meal vouchers — electronic vouchers (non-taxable up to €8 in value each for each working day), paper vouchers (non-taxable up to €4 in value for each working day)
  • Supplemental health care, between 100 – 300 EUR per month
  • Car allowances, between 500 EUR – 1,000 EUR per month
  • Wellness allowance, between 100 – 150 EUR per month

VISA

VISA

Any foreigners coming to work in Italy require a work visa, a national visa, or a D-Visa, which allows entry into Italy within eight days of arriving in the country. However, additional permission is required (a residence permit – permesso di soggiorno) to stay in Italy. The potential employer must make all visa applications via a Nulla Osta document at the company province’s (Preffetura’s) Immigration Office (Sportello Unico d’Immigrazione – SUI.
The Italian government has a limited number of approved work permits and only accepts work permit applications occasionally (for a few months every one or two years), depending on the status of Italy’s job market at that time. (Decreto Flussi).

VAT

General

The standard rate of VAT in Italy is 22.00%.

Stay up to date on payroll & employment law changes

Version History

January 1, 2021
Paternity leave increase from 7 to 10 days
More

Questions & Answers

Subscribe
Notify of
guest
31 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Paul
Paul
3 years ago

With companies moving to telework, are there any restrictions on hours or days worked?

Alex Margolin
Editor
Alex Margolin
3 years ago
Reply to  Paul

The decision on whether a workforce works at home ore in an office is individual for every company. It does not have any impact on the labor laws between employees and employers.

Liron Dor
Liron Dor
2 years ago

Is there any compliance about payment of Social Security / Pension / Health insurance to Italy employees?

Alex Margolin
Editor
Alex Margolin
2 years ago
Reply to  Liron Dor

Hi Liron, employers in Italy are obligated to pay social security at a rate of 29%-32% and to withhold social security from employees at a rate of 10%. Italy has health care through the National Health Service provided to all Italian citizens and funded by taxes, and an old-age pension provided by the government. Collective bargaining agreements, however, may require employers to supplement what the government provides.

Edmondo
Edmondo
2 years ago

Which legal entity is the employee hired from? Do you have a collection of available legal entities?

Erez Greenberg
Erez Greenberg
2 years ago
Reply to  Edmondo

Hi Edmondo, Everything we do is tailored for each company’s specific needs. I recommend you reach out to our sales team and they will find the right EoR for you. https://www.papayaglobal.com/contact-us/

Wendy
Wendy
2 years ago

If the agency worker works on a public holiday, are they entitled to a premium? If so, what is that?

Emily Kuhnert
Emily Kuhnert
2 years ago
Reply to  Wendy

Hi Wendy, usually work on holiday is paid at the rate of 130% of the regular pay, however, if a collective bargaining agreement is in place, it could be more.

Sue Budden
Sue Budden
2 years ago

We have received a request to pay one of Italian employees 12k euros towards study costs – please advise if there are any payroll actions re taxes / social security / informing Italian authorities.

Emily Kuhnert
Emily Kuhnert
2 years ago
Reply to  Sue Budden

Hi Sue, thank you for your question. Can you please provide some more information? Are you looking to pay for a specific course for your employee or is this a flat sum you’d like to give them? Do their studies have anything to do with the qualification of your employee? Lastly, will the employee be absent from work due to their studies?

Tim
Tim
1 year ago

Hi. Italy work law question. Please explain if you are sick while on vacation and get a doctors letter for the sick days, can/should the affected vacation days be amended to sick leave (as in UK). Thanks

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Tim

If a worker can provide all the proper documentation (DR and INPS) and prove that they are ill, then those days should be considered sick days, not vacation days.

Tim
Tim
1 year ago
Reply to  Erez Greenberg

Thank you so much Erez.
Really appreciate your insight.
The Doctors medical certificate is proof of the illness and states the period “not fit for work”. (Date from: xxxx Date to: xxx)
Would be useful to know where this (illness during vacation days) is covered in Italian law…searching in English doesn’t find much!
All the best
Tim

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Tim

Glad to help. A guide (unfortunately in Italian) can be found on The National Institute of Social Security (INPS) website explaining what to do if a worker becomes ill while on vacation. https://www.inps.it/news/malattia-allestero-cosa-fare-in-caso-di-assenza-dal-lavoro

Tim
Tim
1 year ago
Reply to  Erez Greenberg

Absolutely awesome. That is excellent info – straight to the right place. Thank you so much for your knowledgable guidance. Kind regards. Tim

Jana
Jana
1 year ago

Hi, is there any usual car allowance amount for sales person in Italy? Thank you.

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Jana

Hi Jana, there is not.

Aliya
Aliya
1 year ago

hi. my company provides a fully paid car incl petrol with no limit. however they decided to remove this from us. as an employe do they have to pay us compensation on a monthly basis so we can commute from our home to the office and back? is there a legal obligation for the employer to keep providing us with the personal cars owned by the company, or any monthly allowance? thanks a lot.

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Aliya

A short drive to the company office is not considered a business trip and no reimbursement is required.
Should the Company’s office be very far from the employee’s home, it could be provided a reimbursement of expenses in case the employee is requested to reach the company’s office. However, such payment is not mandatory.
Different rules apply for travel and business trips requested by the company. In this case, the employee is entitled to receive reimbursement of expenses and travel allowance provided by the applicable NCBA.

Musaddique
Musaddique
1 year ago

Hi,
If indian employee coming to italy abs spent 2 years,
Can he collect social security amount while leaving from italy.

Also italy has 70% exception law in salary for new talent. Is it applicable to Indian citizen coming to italy and staying minimum 2 years?

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Musaddique

Foreign citizens who possess specific documentation, such as a residence permit, are enrolled in the social security system. An individual must reside in Italy for more than 183 days a year and not have been in Italy during the two tax periods prior to the transfer in order to qualify for tax relief; they must reside in Italy for a minimum of two years; they must work primarily on Italian soil.

Musaddique
Musaddique
1 year ago
Reply to  Erez Greenberg

Yes, I am selected In Italian Company and they are giving me the family visa.
I will be also register with Social security.
we are going to spent more than 2 years in Italy.
so can I get 70% tax relief ?

Last edited 1 year ago by Musaddique
Musaddique
Musaddique
1 year ago
Reply to  Erez Greenberg

Hi Erez,
Thanks for your reply
Yes I am selected in Italian Company and they are proving family visa.
I will be also going to register with social Security in Italy.
This is first time I am coming to Italy in 1 week of October
So can I say, I will get tax relief of 70% ?

Sara
Sara
1 year ago

You mentioned pay rates for working on a public holiday. Is time off in lieu permissible in Italy?

Erez Greenberg
Erez Greenberg
1 year ago
Reply to  Sara

In most companies, only the days worked by certain levels of employees are tracked, so weekend work and public holidays are automatically recorded. Overtime would be paid automatically on weekends and public holidays.

Rohan
Rohan
9 months ago

If the net income is 52500, how do you calculate the gross salary, which includes all government fees and taxes as well as additional benefits?

Enny Shmurin
Admin
Enny Shmurin
9 months ago
Reply to  Rohan

The calculation of net to gross cost in Italy is contingent on various factors, including the classification of the worker, collective bargaining agreements (CBA), the type of occupation, and other relevant factors. It is important to consider these variables when determining the net to gross cost for employees in Italy.

While Papaya do not provide a net to gross cost calculator, I would advise to explore other resources, consult with a professional accountant, or tax advisor who can assist in accurately calculating the net to gross cost based on the specific circumstances and variables involved.

Claudia
Claudia
4 months ago

On Paternity Leave of sales workforce who have a base salary + bonus, does an average bonus amount need to be provided to them in the calculation of the paternity leave?
Paternity Leave
The father is entitled to receive 100.00% of the regular salary and compulsory paternity leave of 10 days within five months of the child’s birth.

Last edited 4 months ago by Claudia
Enny Shmurin
Admin
Enny Shmurin
1 month ago
Reply to  Claudia

Paternity pay is calculated on the basis of the average salary of the previous month.

John
John
1 month ago

What European countries have mandatory base salary increases in 2024?

Enny Shmurin
Admin
Enny Shmurin
8 days ago
Reply to  John

Currently, this matter is being discussed in several European countries. One anticipated location for an increase is Luxembourg; however, the exact date has not been finalized yet.

Download this guide to read later

Payroll and Benefits Guide in Italy

Download Free Guide

See how Papaya can help you automate your global payroll or EoR whilst staying 100% compliant with local labor laws

The information provided in the Papaya Global Web site is provided for informational purposes only. The materials are general in nature; they are not offered as advice on a particular matter and should not be relied on as such. Use of this Web site does not constitute a legal contract or consulting relationship between Papaya Global and any person or entity. Although every reasonable effort is made to present current and accurate information, Papaya Global makes no guarantees of any kind. Papaya Global reserves the right to change the content of this site at any time without prior notice. Papaya Global is not responsible for any third party material that can be accessed through this Web site. The materials contained on this Web site are the copyrighted property of Papaya Global unless a separate copyright notice is placed on the material. Papaya Global grants each user a non-exclusive, non-transferable license to access and download, display and print one copy of the content of this Web site on a single computer solely for internal, business use, provided that the user does not modify the site content in any way and that all copyright and other notices displayed on the site content are retained. Other reproduction, distribution, republication and re-transmission of materials contained within this Web site require Papaya Global’s prior permission.
Download this guide to read later

Payroll and Benefits Guide
in Italy

What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

And more...

Download free guide
All questions are answered by our in-house compliance department working in conjunction with our local in-country partner for this specific country

Public Holidays Calendar

Italy
Download:
CSV
PDF
ICS
Date Day Holiday Notes
1 Jan 2024 Monday New Year’s Day
 6 Jan 2024 Saturday Epiphany
31 Mar 2024 Sunday Easter Sunday
 1 Apr 2024 Monday Easter Monday
25 Apr 2024 Thursday Liberation Day
 1 May 2024 Wednesday International Workers’ Day
 2 Jun 2024 Sunday Republic Day
 15 Aug 2024 Thursday Assumption Day
1 Nov 2024 Friday All Saints’ Day
8 Dec 2024 Sunday Immaculate Conception
25 Dec 2024 Wednesday Christmas Day
26 Dec 2024 Thursday St Stephen’s Day