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.

PEO & EOR services · Italy

Hire employees in Italy with an Employer of Record

Hiring in Italy through an EOR does not require setting up a local legal entity. EuroDev becomes the legal employer running payroll and compliance while you keep full operational control

✓ No entity required

✓ Onboard in weeks

✓ Full compliance managed

Talk to our EOR experts today →

ITALY · EMPLOYER COST SNAPSHOT

Avg. annual gross salary €29,700

Employer contributions ≈ 29–32%

Statutory annual leave 20 days

Standard work week 40 hrs

Source: EuroDev EOR payroll data for Italy, 2026.

PEO & EOR services · Italy

How hiring in Italy through EuroDev works

An Employer of Record lets your company hire in Italy without establishing an Italian subsidiary or branch. EuroDev becomes the legal employer, while your company retains day-to-day operational direction.

Employee selection

You select the candidate you want to hire in Italy.

Contract setup

EuroDev drafts a locally compliant contract, aligned with Italian labor law and applicable collective agreements (CCNLs).

Payroll & tax

We run monthly payroll and report income tax and social security accurately.

Ongoing compliance

Employment administration, benefits, and paid leave managed continuously.

The decision

Direct expansion vs. partner-led market entry

Both paths are legitimate. The right choice depends on how fast you need to move and how permanent your presence in Italy will be.

Most chosen

Employer of Record

When an EOR is the right choice

✓ You want to hire quickly without long setup times

✓ You are testing the Italian market

✓ You plan to hire a small or distributed team

✓ You want to minimize legal and compliance risk

Local Entity

When a local entity makes sense

✓ You are building a large, long-term workforce in Italy

✓ You require a permanent commercial presence

✓ You want full internal control over payroll and HR

Employment contracts

Permanent and fixed-term contract rules

Italy assumes employment is indefinite by default. Incorrectly structured temporary contracts can be automatically reclassified as permanent.

Contract type · default

Permanent (indefinite)

✓ No predefined end date

✓ Full statutory rights from day one

✓ Termination requires lawful procedures and justification

✓ Mandatory notice periods apply

✓ Probation permitted within legal limits

Contract type · limited use

Fixed-term (temporary)

✓ Max. 12 months without objective justification

✓ Extensions beyond 12 months require legal grounds

✓ Max. duration: 24 months

✓ Converts to indefinite beyond the limit

✓ Misuse risks reclassification as permanent

Termination, notice & severance

Italy has strong employee protection laws

Employment "at will" does not apply when hiring through an EOR in Italy. EuroDev guides you through termination procedures to ensure compliance.

15 days

Minimum statutory notice

20 days

Severance per year of service

12 mo.

Maximum severance cap

Probation

Probation periods

Not mandatory, but must be agreed in writing. Probation may run up to six months, depending on role classification and applicable collective agreements. Either party may terminate employment during a lawful probation with reduced procedural requirements.

In practice

Notice & severance in practice

Notice periods are determined by the applicable collective agreement and typically depend on seniority and job classification. Payment in lieu of notice is permitted. No notice is required for dismissals based on just cause (gross misconduct). Employees are generally entitled to TFR (Trattamento di Fine Rapporto), a mandatory severance benefit accrued throughout employment and payable upon termination.

Payroll & employer costs

What hiring through an EOR costs in Italy

Employer costs typically run around 29–32% on top of gross salary, covering all mandatory employer charges and statutory contributions.

Cost example

Estimated annual employment cost

Average annual gross salary €29,700

Employer contributions (≈29–32%) €8,613–€9,504

Estimated total employment cost €38,313

Contribution breakdown

Mandatory employer contributions

Social security contributions

~29–32%

Employer unemployment contribution

5.50%

Salary Guarantee Fund (FOGASA)

0.20–0.60%

Professional training

0.60%

Total estimated

~29.90%

Registration

Social security registrations

✓ Registration with Italian social security authorities

✓ Monthly payroll and contribution reporting

✓ Withholding employee contributions and taxes

✓ Paying employer social security contributions

Working time

Working hours & overtime

✓ Standard schedule: 40 hours/week

✓ Typically Monday–Friday working pattern

✓ Overtime rules usually governed by collective agreements (CCNLs)

✓ Overtime limits and compensation defined by applicable agreements

Paid leave & public holidays

Statutory leave entitlements in Italy

EuroDev ensures every leave entitlement is tracked and administered correctly, from vacation days to parental leave.

Vacation

Annual leave

20 days

✓ Statutory minimum of 20 paid days per year

✓ One period must be at least two consecutive weeks

Statutory

Public holidays

12 days

✓ Up to 12 national public holidays per year

✓ Additional regional or municipal holidays may apply

Parental leave

Maternity leave

20 weeks

✓ 2 months before and 3 months after birth

✓ Paid at 80% of salary via Social Security

✓ Employer top-up may apply under collective agreements

Parental leave

Paternity leave

10days

✓ Fully paid leave

✓ May be taken consecutively or separately

✓ Must be used within 5 months of birth

✓ Paid in line with statutory requirements

Ready when you are

Hire employees in Italy with confidence

Local expertise · Global support

EuroDev helps international companies hire in Italy quickly, compliantly, and without unnecessary risk whether you're onboarding your first employee or expanding an existing team.

Talk to our EOR experts → Explore EOR services

What happens after you contact us? +

1 Share your hiring needs and expected timeline.

2 Receive a compliant employment setup plan.

3 Start contract preparation and employee onboarding.

FAQ's

: 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.
: 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.
: 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.
: 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.
: 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.
: 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.
: 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.
: 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.
: 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.
: 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.