Payroll and Benefits Guide - Italy

Italy
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Currency

Euro
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Capital

Rome
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Employer Taxes

29.40% – 32.40%
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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

The Vatican City, an independent city-state enclaved within Rome, serves as the spiritual and operational center of the Roman Catholic Church.

Italy is the world’s biggest wine producer, producing millions of liters of wine year, with popular types like Prosecco and Barolo.

It is home to a well-known volcano: Mount Vesuvius, which is close to Naples and is the only active volcano on European soil.

Italian is considered the language of music.

The University of Bologna, the oldest continuously operating university, was established in 1088.

Rome was established in 753 BC, making Italy almost 3000 years old.

Italy

Contributions

Employee Payroll Tax

Contribution TypeRate
Social Security10.00%

Employer Payroll Tax

Contribution TypeRate
Social Security29.00% – 32.00%
Injuries at Work Insurance0.40% – 1.00%

Payroll

Payroll Cycle

In Italy, paychecks are typically paid on the 27th of every month on a monthly basis.

13th Salary

Salary calculations are paid over a 12-month period in accordance with Italian law. Each year, the December pay is paid along with the additional 13th installment, or “tredicesima”.

Additionally, some have a 14th salary, which is typically made in June.

Work Hours and Week

The average workweek consists of 40 hours, or 8 hours per day.

Overtime

There are no laws regarding overtime and is decided by employment contracts.
Italy

Leave

Paid Time Off

Following the completion of one year of service, the Civil Code defines paid leave in Italy as a mandatory minimum of 8 days paid leave per year in addition to any public holidays. All other employees’ minimum leave is governed by their collective agreements, which typically provide paid yearly leave of at least four weeks annually.

Public Holidays

There are 12 national holidays in Italy.

Sick Days

In Italy, workers have a right to paid sick time that is covered by both the government and their employer.

For every instance of sickness, the first three days are paid by the employer as such:

  • 100% for the first two instances
  • 66.00% for the third instance
  • 50.00% for the fourth instance
  • 0.00% for the next instances

From the fourth to 21st day, it will be paid by both the employer and government equally. From the 22nd day onwards, the government will pay for 66.00% while the employer pays 34.00%.

Maternity Leave

Every woman working has a right to five months of paid maternity leave, which she can take starting two months before her due date and ending three months after giving birth. This could start earlier than two months if the employee’s job is hazardous to the health of herself or the unborn child.

During maternity leave, the employee is entitled to 80.00% of her usual wage, which is paid by the employer and then reimbursed by the INPS.

A new mother can also take an additional six months of unpaid leave following her maternity leave. If not, a mother can work 6 hours per day until the baby is one year old.

Paternity Leave

Within five months of the child’s birth, the father is entitled to 100.00% of the usual wage and 10 days of required paternity leave.

Parental Leave

Before the child turns six, either parent may take a month of paid parental leave. Otherwise, they may take up to ten months of unpaid leave.

Termination

Termination Process

Unless it is mutually agreed that the employee is not meeting job requirements, has engaged in serious misbehavior, or that the termination is due to economic circumstances, termination must be justified, with notice, and in accordance with the NCA.

Notice Period

Whether the termination was brought on by the employer or the employee, the notice period is based on who started it.

If it was the employer, they must give 30 days to employees and 60 days to managers. If it was the employee, 30 days if they were a regular employee and 60 days if they were a manager.

Severance Pay

Severance compensation is applicable if the company terminated the employee for legal reasons. The TFR (Trattamento di fine rapporto), which the employer defers each month, must be paid to the employee upon termination. It is determined by dividing the annual total pay by 13.5, adding 1.5% for each year of service, and accounting for inflation.

Probation Period

Probation Period

Probationary periods are determined by the employee’s role. The probationary period is three months for employees without managerial responsibilities and six months for all other employees, managers, supervisors, etc. The probationary period is typically lengthier and is set in the applicable NCAs.

Immigration

Any foreign national entering Italy with the intent to work needs a work visa, a national visa, or a D-Visa, which allows entrance within eight days of arrival. However, in order to stay in Italy, you must have a residence permit (permesso di soggiorno).

The Immigration Office (Sportello Unico d’Immigrazione – SUI) of the prospective employer’s province must receive all visa applications via a Nulla Osta document.

VAT

The usual VAT rate is 22.00% in Italy.