A Comprehensive Guide to HR and Employment in Italy

If you are planning to hire in Italy, you must first choose an appropriate employment structure. Companies can establish a local entity, explore whether direct foreign-employer registration is suitable, or hire through an Employer of Record, also known as an EOR.

An EOR enables a foreign company to hire employees in Italy without first establishing its own legal entity. The EOR becomes the employee’s formal local employer and manages the employment contract, payroll, social security, and employment administration.

When hiring employees directly, employers must complete the required employment notifications and register for the relevant social security and workplace insurance obligations.

One of the key elements of https://www.eurodev.com/blog/payroll-in-italy is the application of Collective Labour Agreements, known as Contratti Collettivi Nazionali di Lavoro, or CCNLs. These agreements are sector-specific and regulate aspects such as minimum remuneration, working hours, leave entitlements, probationary periods, and termination procedures.

Given their complexity, it is advisable to consult local HR professionals when drafting employment contracts to ensure compliance and suitable terms for your business.

Italy’s CCNLs play a critical role in governing employment relationships. These agreements are negotiated between employer associations and trade unions and apply on a sector-by-sector basis. They establish employment conditions across different industries.

Italy does not have one statutory minimum wage that applies universally to all employees. Minimum remuneration is largely determined through the relevant sector-specific CCNL. 

CCNLs classify employees into different levels based on their roles. This may vary depending on the applicable CCNL:

• Operai, or manual workers: Employees engaged in hands-on, technical, or operational work.
  
  
• Impiegati, or clerical workers: Employees in administrative, commercial, technical, or office-based roles.
  
  
• Quadri, or middle management: Professionals with managerial or specialist responsibilities who do not fall under the senior executive category.
  
  
• Dirigenti, or senior executives: Senior employees responsible for high-level decision-making and strategy within the organisation.
  
  

These classifications affect compensation, working hours, benefits, and notice periods. The correct classification should be based on the employee’s actual duties and responsibilities rather than only their job title.

Italy’s standard working week is 40 hours, although the applicable CCNL may establish a shorter working week.

Average working time may not exceed 48 hours per seven-day period, including overtime. Employees are generally entitled to at least 11 consecutive hours of daily rest and at least 24 consecutive hours of weekly rest. [lavoro.gov.it]

Any work beyond the standard hours is considered overtime and must be managed according to the employment contract and applicable CCNL. Some agreements provide additional compensation or time off for overtime, while certain higher-level employees, such as dirigenti, may not be entitled to overtime pay.

Smart working, or lavoro agile, should normally be formalised through a written agreement between the employer and employee. The arrangement must comply with statutory and collectively agreed working-time limits, while employers remain responsible for the safety and proper functioning of equipment provided for the employee’s work.

Italian employees are entitled to a minimum of four weeks of paid annual leave.

Under Legislative Decree No. 66/2003, at least two weeks must normally be taken during the year in which the leave is accrued. The remaining two weeks may generally be used within the following 18 months, unless the applicable CCNL provides different or more favourable conditions.

The statutory minimum cannot normally be replaced with payment while the employment relationship continues. Upon termination, unused accrued leave may be compensated through the employee’s final settlement.

In Italy, salaries are generally paid monthly. The exact payment date may be established in the employment contract or applicable CCNL.

Employees commonly receive their annual salary in 13 instalments. The additional instalment, known as la tredicesima, is generally paid in December. In some sectors, a 14th instalment may also apply, depending on the CCNL.

Another important employment cost is Trattamento di Fine Rapporto, or TFR. This is deferred compensation that accrues during employment and is generally paid when the employment relationship ends.

Employers should clearly specify the employee’s gross annual salary, number of salary instalments, applicable CCNL, benefits, and variable remuneration in the employment documentation.

Employers and employees in Italy are subject to various tax and social security contributions.

For Employers:

Employer costs can include:

• Social security contributions administered through INPS
• Workplace accident insurance through INAIL
• TFR accrual
• Additional funds or benefits required under the applicable CCNL

Contribution rates vary according to factors such as the employer’s industry, employee classification, type of employment, insurance risk, and applicable social security scheme. Employers should therefore obtain an individual payroll calculation instead of relying on one standard contribution percentage.

INPS publishes updated contribution thresholds and calculation values annually. The relevant values for 2026 were published in INPS Circular No. 6 of 30 January 2026. [inps.it]

For Employees:

Employees generally pay social security contributions through payroll deductions. The exact rate depends on the employee’s circumstances and applicable social security scheme.

Employees also pay personal income tax, known as IRPEF. The national rates for 2026 are:

• 23% on taxable income up to €28,000
• 33% on the portion between €28,001 and €50,000
• 43% on the portion above €50,000
  
  

Regional and municipal surcharges may also apply. The 2026 Budget Law reduced the second national IRPEF rate from 35% to 33%.

Italian National Institute of Statistics (Istat), Italy's Economic Outlook 2025-2026
[istat.it]

Italian National Institute of Statistics (Istat), Resident Population Data
[demo.istat.it]

Italian Ministry of Labour and Social Policies, Working Hours
[lavoro.gov.it]

Italian Ministry of Labour and Social Policies, Annual Leave
[lavoro.gov.it]

Italian Ministry of Labour and Social Policies, Collective Labour Agreements (CCNLs)
[distaccoue...oro.gov.it]

Italian Ministry of Labour and Social Policies, Smart Working
[lavoro.gov.it]

Italian Ministry of Labour and Social Policies, Smart Working Agreement Requirements
[urponline....oro.gov.it]

Italian Revenue Agency (Agenzia delle Entrate), IRPEF Rates and Calculation
[agenziaent...ate.gov.it]

INPS, Circular No. 6 of 30 January 2026
[inps.it]

European Commission, EU Immigration Portal: Employed Worker in Italy
[home-affai....europa.eu]

Italian Ministry of Education and Merit, National Holiday Calendar 2026-2027
[mim.gov.it]