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Following the conclusion of World War II, Italy's economy has advanced to become one of the most robust in Europe. On a global scale, Italy ranked as the eighth-largest economy in 2020 and the third-largest within the European Union, trailing behind Germany and France.
The driving force behind the Italian economy is the production of high-quality consumer goods by small- and medium-sized enterprises, many of which are family-owned. Consequently, Italy earned recognition in the World Bank's 2019 Doing Business Report as one of the most business-friendly countries.
Alongside its commendable low unemployment rate, Italy is renowned for its skilled, dedicated, and reasonably priced remote workforce. This makes the country an attractive destination for international companies seeking qualified employees.
Italy's labour force demonstrates excellence across diverse fields, characterised by a strong work ethic that is reflected in the superior quality of products manufactured by Italian companies.
Italy does not mandate written employment contracts; oral agreements suffice. However, certain clauses must be documented, with employers required to inform employees the following in writing within the first 30 days of starting employment:
In Italy, probation periods vary based on the collective bargaining agreement. Non-managerial roles have a 3-month probation, while managerial positions entail a 6-month probationary period.
Regular working hours in Italy amount to 8 hours per day and 40 hours per week, calculated over a seven-day period rather than a fixed workweek. Additionally, employees are entitled to a daily rest period of 11 hours within each 24-hour cycle.
Work exceeding the standard weekly hours is paid by overtime and is regulated by employment contracts or collective agreements. The National Collective Agreement (NCA) typically determines the maximum limits for overtime pay.
Italy has no set minimum wage at the national or regional level. Minimum wages are typically determined by the National Collective Agreements (NCAs) for different contract levels. As of July 2018, payments must be made through checks, bank transfers, or electronic methods. Cash payments are no longer allowed.
In Italy, the 13th-month pay, referred to as the "tredicesima," is provided annually alongside the December salary. Additionally, certain National Collective Agreements (NCAs) may include a 14th-month instalment, typically given in June.
The individual income tax in Italy is calculated according to progressive rates. Factors such as household status and number of children may influence overall rates.
INPS manages Italian pensions, funded by employer and employee contributions through Social Security. To qualify for old-age benefits, individuals need a minimum of 20 years of contributions, must meet the age requirement (67 for both genders), and are about to retire.
The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Italy tailored to your needs.
As per the National Collective Agreement (NCA), termination requires justification and advance notice, unless the employee fails to meet mutually agreed-upon commitments, such as job responsibilities, engaging in serious misconduct, or termination due to economic reasons. Acceptable grounds for termination include:
In Italy, the notice period for termination depends on whether it's initiated by the employer or the employee. It is determined by factors such as the applicable National Collective Bargaining Agreement, length of employment, and employee classification. Employer-initiated terminations may have a notice period of 30 days to 12 months, while employee resignations could range from 30 days to 4 months, as per major NCBA in Italy.
Severance pay is granted in cases of authorised employer-initiated termination. The TFR (Trattamento di fine rapporto) is given to the employee upon termination, accrued monthly by the employer. Calculated by dividing the annual salary by 13.5, it also includes 1.50% for each year of service and compensation for inflation.
Italy recognises 12 public holidays, which are not included in the minimum holiday entitlement. However, employers typically grant their employees time off on public holidays. Collective bargaining agreements may specify that employees are entitled to take the following regional and national holidays off from work:
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