Looking for a PEO and EOR provider in Italy? You've knocked on the right door! Our European PEO and EOR solutions help companies hire employees in Italy without establishing a legal entity. Hiring and employment in Italy can be complex as a foreign employer. We're here to guide you. EuroDev is the leading provider of EOR & PEO solutions in Italy. We partner with North American businesses who want to expand their business into Europe, and thus Italy.


How it works - PEO in Italy & EOR in Italy

An Employer of Record (EOR) or Professional Employer Organization (PEO) is a company or organization that is legally responsible for paying employees, including dealing with employee taxes, benefits & insurances. As the EOR/PEO of your European or Italian employees, we provide you with tailored payroll, HR and compliance services. Through this construction, we decrease all the complications such as compliance issues, setting up a foreign establishment and setting up employment contracts in a different language. 

Benefits of using an Italian PEO & Employer of Record 

  • Expand without an entity 
  • Flexible and cost-effective solution to outsource payroll and HR functions for international expansion 
  • In compliance with foreign local laws & regulations 
  • Minimizes employment liabilities and risks 
  • Reduced risk, as the risks of being an employer fall almost completely on the employer of record 
  • Let's you focus on your core business 
  • You manage your employees 
  • EoR takes care of registration and contact with local authorities 

Employment Contracts Italy

What are the main types of employment contracts (contratto di lavoro) in Italy? In Italy, the two main types of labor contracts are permanent employment contracts and fixed- term employment contracts. The permanent contract, which has an indefinite duration, is the most common. A fixed-term contracts can last up to 36 months, including any extension. A trial period can also be included in the employment contract. During this period both the employer and employee are is free to terminate the contract without notice.

Employment contracts regulate the main aspects of the working relationship between employer and employee including job title, salary, responsibilities and duties, entitlement to sick pay and holidays, and applicable probationary and notice periods.

Italian PEO and EOR service providers will support you with the set-up of a local employment contract.  

Employment Termination Italy - Notice Period Italy

As you may know, employment in Europe is more employee-friendly than employer-friendly in comparison to North America. An example that showcases the employee-friendliness is employment at-will. “Employment at-will” is not an option in Italy. In Italy, the length of the notice period is provided by each collective agreement. In most collective agreements, the notice is as follows (please note that notice periods may depend on the position of the employee within the organization):

  • 9 months tenure: 10 - 75 days
  • 4 years tenure: 10 - 75 days
  • 20 years tenure: 30 - 180 days

Upon termination of an open-ended employment contract, both the employer and the employee are entitled to a notice period. In case of termination due to a decision of the employer, it can exempt the employee from working during the notice period while paying a corresponding payment in lieu of notice. In case of termination due to a decision of the employee, if he/she resigns without giving the notice period provided, the employer has the right to withhold the amount of the payment in lieu of notice.

As the Italian PEO and EOR service provider is the formal employer of your employees in Italy, they are also responsible for terminating the contract while applying the applicable Italian terms. 

Social Security Tax for Employers in Italy

Workers within Italy are required by law to pay social security contributions on their gross salary and all earnings in Italy. The social security contribution mainly depends on the relationship between the employee and the employer.

The Italian employer, in order to pay the social security contributions for employees, must register with the Italian Social Security Administration (INPS). The total social security rate is around 40% of the employee's gross compensation of which the employer pays around 30% and the employee 10%. In 2020, the social contributions are capped to a maximum of EUR 103,055.

Click here to have an overview of the social security tax rates for employers in Europe in 2021. On average, the social security tax rate for employers in Europe in 2021 is 20%. This is a lot higher than North American employers are used to.

Average Salary Italy & average employer costs Italy

What are the costs of employing employees in Italy? In 2022, the average annual gross wage in Italy was $29.153,04. This is lower than the average annual wage in the United States: $53.490,00. As an employer, the actual employer costs are around 29% to 32% higher than the gross annual salary. Based on a $29.153,04 annual salary, the employment costs would be $37.607,42.

To learn more about the average salaries in Europe and the actual employment costs in Europe, we invite you to read this article on Costs of hiring European employees.

Working hours Italy

The average working week in Italy amounts to around 36 hours a week, with the maximum legal working week set at 40 hours, plus eight hours of overtime. As work tends to be highly structured, an employee typically works Monday to Friday 8/9am to 1pm, take a one or two-hour lunch break and then work from 2/3pm to 6/7pm.


Paid vacation leave Italy

The minimum number of vacation days in Italy based on a 5 days’ workweek is 20. However, many contracts, particularly for state employees, allow for 28 days, or five weeks, of paid leave per year. Employees in Italy are also entitled to so-called permit hours (permessi) that can be used for personal reasons. The amount of hours depends on the particular collective bargaining agreement.  

Employees have to take at least 2 weeks of holiday a year. The days that are left at the end of the year can’t be paid out. When someone leaves the due holiday days are paid out. For more information on paid vacation days in Europe, please feel free to read our blog on paid vacation days in Europe 2021

Public Holidays Italy

In Italy, there are 12 public holidays. There are also some regional holidays that need to be taken into account:

  1. New Year's Day - 1 January
  2. Le befana - Epiphany - 6 January
  3. Easter Sunday - 9 April
  4. Easter Monday - 10 April 
  5. Liberation Day - 25 April
  6. Labour day - International Worker's Day - 1 May
  7. Republic Day - 2 Jun
  8. Assumption Day - 15 August
  9. All Saint's Day - 1 November
  10. Immaculate Conception - 8 December
  11. Christmas Day - 25 December
  12. 2nd Day of Christmas (St. Stephen's Day) - 26 December

Add 2023 Italy Public Holidays to your calendar

Maternity and Paternity Leave Italy

When it comes to the statutory maternity leave (congedo di maternità) in Italy, the duration is 5 months, or 20 weeks. Employees can choose from two options:

  • Take 2 months preceding expected date of delivery and 3 months following the birth.

  • Take 1 month preceding expected date of delivery and 4 months after. Mothers need to submit a medical certificate, justifying the well-being of the baby will not be harmed were you to allow the leave only 1 month prior.

Looking at the pay, a mother has the right to an allowance equal to 80% of the salary for the entire duration of the maternity leave. If part of a collective labor agreement, the employee can receive more favorable allowance up to 100%. It is also a common practice as an employer to pay for the remaining 20%. More information about maternity leave in Europe can be found in this blog

Paternity leave (congedo di paternità): 10 day full paid leave which can be taken separately and can be claimed within five months of the child's birth

Important Italian employment benefits and topics

The TFR and the 13th and 14th salary months are two important topics in Italy.

Firstly, the TFR. In Italy, there is no severance pay or redundancy compensation. However, upon termination of the employment relationship, the employee receives the so called TFR (Trattamento di fine rapporto), which is a part of workers' wages whose payment is deferred upon termination of the employment relationship. This is an amount of approximately 10% of the gross wage, which is collected when the employee resigns the job or is dismissed. The TFR, for the employer, is one of the workforce costs because it is a part of benefit which is paid at the termination, but which accrues during the relationship. Every month the employee accrues the worth and at the termination of the working relationship the company pays the employee the total accrued amount. This TFR can also be placed in a pension fund.

Secondly, the 13th and 14th salary months. Though uncommon in most countries, according to Italian law, compensation is granted in fourteen instalments, with one extra instalment paid in December. Generally defined by the CBA and depending on the employee´s industry, position, status and seniority, the 14th payment instalment is typically paid in June. 

Why do you need a PEO in Italy?

  • Italian law and regulations are complicated, save yourself time and money by partnering up with a PEO
  • Reduce the risks of non-compliance payroll
  • Let's you focus on your core business
  • As PEO we take responsibility for all employment tasks and compliant payslips, including taxes and other contributions
  • As experienced PEO, we’re able to help you out get work permits, visas and onboardings really fast

Learn more about PEO and EOR in Europe:

Get in contact or request a quote


Learn more about PEO and EOR in other European countries:


PEO and EOR in
the UK

Currency: Pound Sterling (GDP)
Payroll Frequency: Monthly
Employer Taxes: 13.80%


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 19% - 20%


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 29% - 32%


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 40% - 50%


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 23.59%


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 29.90%


PEO and EOR in

Currency: Polish Złoty (PLN)
Payroll Frequency: Monthly
Employer Taxes: 19.48% - 22.14%


PEO and EOR in

Currency: Danish Kronne (DKK)
Payroll Frequency: Monthly
Employer Taxes: 14,892 DKK per year


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 15.05%


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 26.50%


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 25% - 27%


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 16.10%


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 22.54%


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 21.23%


PEO and EOR in

Currency: Euro (EUR)
Payroll Frequency: Monthly
Employer Taxes: 19.85% - 21.25%


PEO and EOR in

Currency: Croatian Kuna (HRK)
Payroll Frequency: Monthly
Employer Taxes: 16.50%

Interested in European expansion? Exciting! I am looking forward to discussing your European HR needs.

Monique Ramondt Sanders

Executive Vice President | HR Outsourcing