Can you hire employees in Italy without setting up a local entity?

Yes. By using an Employer of Record (EOR), you can employ staff in Italy without incorporating an Italian company. The EOR becomes the formal employer, while you manage the employee’s daily work and responsibilities.

What is the difference between an EOR and a PEO in Italy?

An EOR employs workers on your behalf and is used when you do not have an Italian entity. A PEO supports companies that already have a local entity by assisting with payroll, HR administration, and compliance, while the entity remains the legal employer.

How long does it take to hire employees in Italy through an EOR?

Hiring via an EOR is significantly faster than setting up a local entity. In most cases, employees can be onboarded within a few weeks, depending on documentation and contract setup.

What types of employment contracts are used in Italy?

Permanent (open‑ended) contracts are the most common. Fixed‑term contracts are also permitted but are regulated and generally limited to a total duration of 36 months, including extensions.

How much does it cost to employ someone in Italy?

When hiring through an EOR in Italy, total employer costs are typically around 29–32% on top of gross salary, depending on role and collective agreement. These costs mainly consist of social security contributions and statutory benefits.

How does payroll work in Italy when using an EOR?

Payroll in Italy is usually processed monthly. It includes salary calculation, income tax withholding, employee contributions, and employer social charges. When using an EOR, all payroll execution and statutory filings are handled on your behalf.

What is TFR and how does it work?

TFR (Trattamento di Fine Rapporto) is Italy’s mandatory deferred compensation system. Roughly 10% of salary accrues over time and is paid to the employee when employment ends. It represents a statutory employer cost managed and tracked by the EOR.

How many vacation days are employees entitled to in Italy?

Employees are entitled to a minimum of 20 paid vacation days per year. Many collective agreements grant additional days, often bringing total annual leave to 26–28 days.

What maternity and paternity leave applies in Italy?

Employees are entitled to 5 months of maternity leave, typically paid at 80% of salary via social security. Fathers are entitled to 10 days of fully paid paternity leave, which must be taken within five months of the child’s birth.

Is using an Employer of Record legal in Italy?

Yes. Using an Employer of Record is fully legal in Italy when structured correctly. The EOR must act as the formal employer and comply with Italian labor law, collective agreements, and reporting obligations.

Hire Employees in Italy with an Employer of Record

Expanding your team in Italy doesn’t require forming an Italian company upfront.

Through EuroDev’s Employer of Record (EOR) and PEO services in Italy, international companies can legally engage local employees, process payroll, and meet all Italian employment obligations — without taking on the complexity of direct employer registration.

EuroDev supports your Italian hiring by managing:

Locally compliant employment contracts
Payroll processing and statutory tax filings
Social security registrations and contributions
Day‑to‑day HR and labor law compliance

Talk to our EOR experts today

Hiring Employees in Italy with an Employer of Record

An Employer of Record (EOR) provides a practical way to hire employees in Italy without opening a local subsidiary. EuroDev formally employs the worker for legal and payroll purposes, while your company directs daily activities, reporting lines, and performance expectations.

If your organization already operates an Italian entity, EuroDev’s PEO solution can support internal payroll coordination, HR administration, and compliance execution.

How Hiring in Italy through EuroDev works

In most cases, employees can be onboarded within a few weeks, subject to contract finalization and mandatory registrations.

1. Employee selection

You identify and approve the talent you wish to hire in Italy.

2. Employment contract setup

EuroDev drafts an Italian‑compliant employment agreement reflecting statutory requirements and the relevant collective agreement (CCNL).

3. Payroll & tax administration

Monthly payroll is processed by EuroDev, including income tax withholding and social security calculations.

4. Ongoing compliance & HR support

Throughout the employment term, EuroDev administers leave, benefits, HR documentation, and compliance requirements.

Employer of Record vs Setting Up a Legal Entity in Italy

When an EOR is the right choice:

You need to hire in Italy without extended setup timelines
You’re entering the market or testing operations
Your workforce will remain relatively small
You want to limit ongoing legal and compliance exposure

When a local entity makes sense:

You plan to employ a large team long‑term
A permanent commercial presence is required
Payroll and HR should be handled fully in‑house

Key differences at a glance

	Employer of Record	Local Entity
Setup time	Weeks	Several months
Legal responsibility	EuroDev	Your company
Payroll & Compliance	Outsourced	Internal
Upfront costs	Low	High
Risk exposure	Shared and reduced	Full exposure

Employment Contracts Through an Italian EOR

Permanent (Indefinite) Employment Contracts

Open‑ended contracts are the standard form of employment in Italy and are strongly protected by Italian labour law.

Key characteristics:

No predefined end date
Full statutory employment protections from the start date
Termination must follow legally defined procedures and justifications
Mandatory notice periods apply
Can be full‑time or part‑time
Probation periods are permitted, subject to statutory limits and CCNL rules

Italian law assumes employment relationships to be permanent unless a fixed‑term contract is lawfully justified.

Fixed‑Term Contract Rules (Temporary Contracts)

Fixed‑term contracts in Italy are permitted but tightly regulated.

Key limitations include:

Fixed‑term contracts are generally limited to 12 months without objective justification
Extensions beyond 12 months require specific legal grounds
Maximum cumulative duration is typically 24 months
Improper use may result in automatic conversion to an open‑ended contract

EuroDev ensures all Italian employment contracts comply with statutory rules and applicable CCNLs (Ministero del Lavoro).

Termination, Notice Periods & Severance in Italy

Italy is not an at‑will employment jurisdiction. Terminations must follow formal legal procedures and are subject to employee protection rules.

Probation Periods

Probation periods must be stated in writing and are typically limited to 6 months, depending on role classification and applicable collective agreements (Ministero del Lavoro). During probation, termination is permitted with reduced procedural requirements.

Notice Periods

Notice periods are primarily set by the applicable collective labour agreement (CCNL) and depend on:
- Employee seniority
- Job classification
No notice is required in cases of dismissal for just cause (gross misconduct)
For dismissals with notice, the employer may opt to pay an indemnity in lieu of notice
Notice is generally not required during probation

Severance pay

Italy does not apply a “days per year of service” severance model. Instead, employees are entitled to Trattamento di Fine Rapporto (TFR):
- TFR is mandatory severance pay accrued throughout employment
- It is payable upon termination regardless of the reason (resignation, dismissal, retirement)
- Typically calculated as annual salary ÷ 13.5, accrued yearly and revalued
- TFR is payable even in cases of disciplinary dismissal

EuroDev guides employers through Italy’s termination rules, notice obligations, and TFR calculations to ensure full compliance and minimise legal risk.

Payroll, Employer Costs & Working Hours in Italy

Payroll costs when hiring through an EOR in Italy

When employing staff in Italy through EuroDev’s EOR service, employers should expect total employment costs of approximately 29–32% (excluding TFR) above gross salary, driven by mandatory social contributions.

Illustrative example:

Gross annual salary: €29,700
Approximate total employer cost (excluding TFR): €38,313

Payroll calculations, filings, and statutory payments are administered by EuroDev.

Working hours

Standard working time: up to 40 hours per week
Typically structured around a Monday–Friday schedule
Overtime rules and limits are defined in collective agreements

Social Security & Employer Contributions in Italy

When hiring employees in Italy through an Employer of Record, EuroDev manages all mandatory registrations, filings, and payments with Italy’s social security institutions as part of the payroll process.

Employer responsibilities handled by EuroDev

Registering employees with INPS (Italian Social Security Institute)
Registering workplace injury insurance with INAIL
Monthly payroll processing and statutory contribution reporting
Withholding employee social security contributions
Remitting employer and employee contributions to the authorities

Typical employer contribution structure

Employer social security contributions in Italy are not a single flat rate and vary based on industry, employee classification, company size, and applicable collective labour agreement (CCNL). For a standard permanent employee, typical employer charges include:

INPS social security contributions: approx. 27–32% of gross salary
- Covers pensions, unemployment (NASpI), maternity/paternity, sickness, wage guarantee funds, and family allowances
INAIL (workplace injury insurance): approx. 0.5–1.5%, depending on risk category
TFR accrual (statutory severance): approx. 7.4% of gross salary, accrued monthly
(paid at termination and shown separately from social security)

Total estimated employer contribution:

Social security and statutory charges: approximately 30% of gross salary
Including TFR accrual: total employer cost typically reaches ~37–40% above gross salary

Working Hours & Overtime in Italy

Standard full‑time working schedule: 40 hours per week, typically spread over 5 days
The maximum average working time, including overtime, must not exceed 48 hours per week
Overtime limits and compensation are primarily determined by national or company‑level collective agreements (CCNLs)
Certain managerial and senior roles (dirigenti) are generally exempt from standard working‑time and overtime limits
Their working hours are determined by role responsibilities rather than statutory hour caps

EuroDev ensures working‑time rules are correctly applied based on contract type and applicable agreements.

Paid Vacation Leave & Public Holidays

Employees hired through an EOR in Italy are entitled to statutory paid leave, tracked and administered by EuroDev.

Annual leave

Statutory minimum: 20 paid days per year
Many collective agreements increase entitlement to 26–28 days
Employees must use at least two consecutive weeks annually
Unused leave is paid only upon termination

Public holidays

Up to 12 national public holidays per year
Additional regional or municipal holidays may apply

EuroDev ensures entitlements are applied correctly based on location and agreement.

Maternity & Paternity Leave in Italy

Maternity leave

Total duration: 5 months (20 weeks)
Two possible structures:
- 2 months before + 3 months after birth
- 1 month before + 4 months after birth (with medical approval)
Standard allowance: 80% of salary, paid via social security
Collective agreements or employer top‑ups may increase pay

Paternity leave

10 days of fully paid leave
Can be taken consecutively or separately
Must be used within five months of birth

EuroDev ensures parental leave is registered, reported, and paid correctly in line with current Italian regulations.

Why Companies Choose EuroDev for EOR in Italy

No requirement to incorporate locally to hire employees
Employment contracts and payroll handled compliantly
Expertise in Italian labor law and collective agreements
Centralized HR, payroll, and compliance support
Scalable hiring as your Italian operations grow

Hire Employees in Italy with Confidence

Italy’s employment landscape is structured, regulated, and highly influenced by collective agreements. Managing contracts, payroll, and termination without local expertise can create unnecessary risk.

EuroDev enables international companies to hire talent in Italy quickly and compliantly through EOR and PEO solutions that remove administrative burden and simplify expansion.

Contact our team to discuss hiring in Italy.