Italy
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Introduction
General Overview & Economic Facts
- Italy (Italia), officially known as the Italian Republic (Repubblica Italiana), is a country located in south-central Europe. It consists of a peninsula bordered by the Alps and surrounded by several islands
- It is considered one of the most culturally and economically advanced countries, with the world’s 8th largest economy by nominal GDP (2021) and 13th largest by PPP (2021)
- It ranks very highly in life expectancy, quality of life, healthcare and education with a ranking of 29th on the HDI
Why Employ In Italy?
- The main exports from Italy are machinery, vehicles and pharmaceuticals
- 9.61% of the population is between the ages of 15 and 24 years, with 40.86%. Italy has one of the oldest populations in the world. The general population possess more work experience and skills, making it a great country to hire experts.
Overview Of The Labour Law
- Italy’s labour laws encompass labor legislation, the Constitution of Italy, as well as the Worker’s Statute. The laws govern fair payment, maximum working hours, vacation, social insurance, maternity benefits, illness, disability, industrial diseases and workplace accidents
- Italian employment law provides strong labor conditions and protections for employees
Fun Country Facts
- Italians invented eyeglasses
- Italy is home to Europe’s only three active volcanoes
- The first ever bank started in Italy
Why Use Playroll Services For Italy?
- Employing in Italy requires companies to have their own legal entity in the country as well as to manage payroll, employee benefits, taxes and legal compliance
- This can get quite complicated, especially with the complexity of employment laws in Italy. With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
- We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing a thriving team and business
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Social Security
Called Instituto Nazionale Previdenza Sociale (INPS)
Calculated on a maximum salary of EUR 105,014.00 per month
29.00% – 32.00%
The general contribution rate is 30.00%
Severance Contribution
Called Trattamento Di Fine Rapporto (TFR) in Italy
The calculation for the TFR:
1. Employee’s gross annual salary (from 1 January to 31 December) divided by 13.5
2. Multiply withholding tax of 0.5% with the employee’s gross annual salary
3. Deduct 2) from 1)
TFR is revalued annually by ISTAT (the National Statistical Institute)
National Institute for Accidents at Work (INAIL)
0.40 – 3.00%
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Social Security
For non-executive staff, this contribution goes to the National Pension Fund.
Staff
±10.00%
Contribution payable on earnings between EUR 105,014.00. per year
9.19%
Contribution payable on earnings between EUR 0 and EUR 47,379.00 per year
10.49%
Contribution payable on earnings over EUR 47,379.00 per year
Industrial Executive
9.19%
Contribution payable on earnings between EUR 0 and EUR 47,379.00 per year
10.49%
Contribution payable on earnings over EUR 47,379.00 per year
Additional Pension Contributions
Commercial Executive
Fondo Mario Negri (complementary pension fund)
– 1.00%
of annual remuneration of EUR 59,224.54 per year
– EUR 129.12.00 for professional training charges.
– EUR 464.18 contribution to Fondo Pastore (supplementary pension fund) (optional)
Industrial Executive
Fondo Previdenza Dirienti Aziende industriali (PREVINDAI) (additional pension fund)
4.00 %
Calculated on a maximum salary of EUR 180,000.00 per year
Medical Care Fund
Commercial Executive
Fondo Mario Besusso (FASDAC)
1.87%
Calculated on a maximum salary of EUR 45,940.00 per year
Industrial Executive
Fondo Assistenza Sanitaria Industria (FASI)
EUR 1,092.00
Income Tax
Income bracket per annum
0.00 – 15,000.00
23.00%
15,000.00 – 28,000.00
25.00%
28,000.00 – 50,000.00
35.00%
55,000.00 or more
43.00%
Regional Income Tax
1.23% – 3.33%
Regional and municipal income tax rates vary depending on the employee’s residence
Municipal Income Tax
0.00% – 0.80%
Regional and municipal income tax rates vary depending on the employee’s residence
Employment Terms
General
Minimum Wage
- There is no statutory minimum wage
- The minimum wage is agreed upon through Collective Bargaining Agreements
Working Hours
- Maximum of 40 hours per week and 8 hours per day
- Employees are entitled to a minimum meal interval of 60 minutes
- Typical working hours are 08h00 to 17h00, Monday to Friday
Overtime
- Maximum of 8 overtime hours per week
Notice Period
- Determined by the applicable Collective Bargaining Agreement
Severance Pay
Called Trattamento Di Fine Rapport (TFR) in Italy
- One year’s overall salary divided by 13.5, plus 1.5% for each year of service plus compensation for inflation
Probation Period
- Determined by the applicable Collective Bargaining Agreement
- The maximum probation period is 6 months
Bonus
-
13th and 14th cheques are mandatory and are paid out in June and December
Public Holidays
- January 1st – New Year’s Day
- January 6th – Epiphany
- April 4th – Easter Sunday
- April 5th – Easter Monday
- April 25th – Liberation Day
- May 1st – Labor Day / May Day
- June 2nd – Republic Day
- August 15th – Assumption of Mary
- November 1st – All Saints’ Day
- December 8th – Feast of the Immaculate Conception
- December 25th – Christmas Day
Leave
Paid Leave / Vacation Days
- Minimum of 4 weeks per year
Sick Leave
- Paid leave
- Paid by employer and the Social Security
- A minimum of 3 days per year
- Statutory sick pay is paid for a maximum of 180 days per calendar year
Maternity Leave
- Paid leave
- Paid by Social Security
- Minimum of 5 months per year
- Paid at 80% of gross monthly earnings.
Parental Leave
- Paid leave
- Paid by Social Security
- Married parents- 6 months each with a maximum of 10 months per year
- Single parents- 10 months per year
- Paid at 30% of regular pay for a maximum of 6 months
Adoption Leave
- Paid leave
- Paid by Social Security
- For adoptive and foster parents, the same regulations for maternity, paternity and parental leave apply