Employer of Record in Italy

How EOR hiring works in Italy

An Employer of Record (EOR) is a legal employer that hires employees on behalf of international companies through its established local entity. The EOR handles all aspects of onboarding, payroll and employment compliance, while the foreign company manages the employee’s daily work. Rivermate combines local HR expertise, a partner network for competitive benefits, and the Rivermate platform to help international companies hire quickly and compliantly in a complex market like Italy.

Italy labor market: At a glance

IMPORTANT NOTE ON CCNLs: National Collective Labor Agreements (CCNLs) govern Italian employment, dictating minimum contractual salaries, working hours and a wide range of benefits by sector. Rivermate hires under the CCNL Terziario, Distribuzione e Servizi (referred to as CCNL Commercio) - the most commonly used CBA in Italy, covering more than 2.8 million employees. Within the CCNL, roles under Rivermate engagement are classified from Quadro (highest) to Level 5 (lowest) and the classification determines aspects such as probation periods and notice periods among others.

The hiring market
Greatest hiring activity:	Milan is considered the business hub while Rome still hosts most major international companies. Cost of living varies by region with talent from the south of Italy typically less expensive than the north.
Hiring timelines:	Locals: one week once all documentation is available. Foreigners with a valid work permit: same as above. Foreigners without a work permit: 3-6 months
In-demand sectors:	North Italy: technology, finance, engineering Central Italy: administration, services, tourism South Italy: Infrastructure, energy

The salary market
Employer taxes & contributions:	INPS (social security): 28%-32% INAIL (accident and injury insurance): varies depending on employer activity and role risk TFR: 6.91% of TFR-eligible annual salary per year (deferred compensation) Regional tax on productive activities (IRAP): up to 3.9%.
Minimum wage:	No statutory national minimum wage; Italian minimums are set by CBAs (CCNL). CCNL Commercio (used by Rivermate) minimum levels (14x payments/year): Quadro: ~ €3,050/month. Level 1: ~ €2,550/month. Level 2: ~ €2,300/month. Level 3: ~ €2,050/month. Level 4: ~ €1,850/month. Level 5: ~ €1,700/month. Rounded figures. Above amounts are valid from November 2026. Changes expected from February 2027.
Average gross annual salary:	Approximately €33,000 / year.

Income tax brackets
Progressive income tax rates applicable for 2026:
€0 - €28,000	23%
€28,001 - €50,000	33%
€50,000 +	43%

A regional income tax (1.23%-3.33%) also applies. A municipal tax (0%-0.9%) may apply as well.

What will it really cost to hire in Italy?

In Italy, contracts are based on annual gross salary (RAL - Retribuzione Annua Lorda), paid in 14 monthly installments. RAL is also the reference point for calculating contributions and taxes (such as INPS, IRPEF, TFR - discussed below), 13th and 14th-month payments, as well as other contractual entitlements. The salary is typically paid on the last working day of the month,

Base salaries

All salaries must be equal to or higher than the applicable CCNL minimum defined for the appropriate level. The minimums are defined assuming 14 payments per year: the regular 12 monthly payments plus an additional payment in December (13th pay - Tredicesima) and in June (14th pay), both accrued monthly at 1/12th per month of service.

The CCNL Commercio (beyond the defined minimums) has two mandatory mechanisms affecting the periodic progression of salaries. The first one is the general CBA minimum wage update which is performed periodically. The second mechanism is a seniority increase (Scatti di anzianità) which affects all employees and happens every three years. This mandatory seniority increase requires a fixed automatic pay raise depending on the employee’s level. It is worth noting that the contractual minimums do not include the seniority increment which is added on top of them.

Employer taxes and contributions

Even though gross pay itself is competitive in Italy, typically the biggest concern of first-time foreign employers is the total employment cost. The employer tax and contribution burden on top of the salary is generally around 30% but depends on a number of factors.

• Istituto Nazionale della Previdenza Sociale (INPS, social security): The contribution rates are deducted through payroll and split between employer and employee, with the employer contributing approximately 29-32% of the gross salary (depending on company size and employee qualification) and the employee contributing 9.19-10.49% of the gross.
• Trattamento di Fine Rapporto (TFR): a part of the total salary and accrues at about 6.91% of the annual gross. Fully paid by the employer, it is set aside monthly instead of paid out and transferred only upon termination.
• Supplementary healthcare: the fund to be used depends on the level, with Levels 1 - 5 subject to FONDO EST (Fondo di assistenza sanitaria integrativa) where the employer contribution is €14/month (€168/year). The employee pays €2/month (€24/year). For employees in the Quadro level, mandatory participation in QuAS (Cassa Assistenza Sanitaria Quadri) is required with an employer contribution of €390/year and an employee contribution of €56/year.
• Accident-at-work insurance (INAIL) - under conditions: Covers workplace accidents and occupational diseases. No opt-out or waiver is possible. The coverage also includes accidents that happen during the commute to and from work as well as remote workers in other locations during working hours. The premiums are covered entirely by the employer and rates vary according to the risk category of each role.

The hidden cost for employers: Employee mandatory rights and benefits

Beyond statutory monthly employer contributions and taxes, Italy maintains a complex network of other mandatory employee rights and benefits that employers must know, particularly because they create future financial liabilities.

• Sick leave: A medical certificate is required. For the first three days of the sick leave, the employer is liable for payment at a rate of 60%, with some limitations. From day 4, the INPS pays a certain percentage (50%+) of the daily average salary while the employer tops up the difference.
• Annual leave: A minimum of 26 days of annual leave (Feria) applies per the CCNL regulations. Additionally, 32 hours Ex-Festività (in lieu of abolished public holidays) + 56 hours ROL (reduction of working hours) per year are mandated as well.
• Special leave: additional paid leave such as Marriage leave (15 calendar days), Bereavement leave (3 days), Study leave (up to 150 hours over three years) is granted.
• Maternity leave: mandatory 5 months of leave (typically 2 months before + 3 months after due date). The leave is paid at a rate of 80% by INPS, with the employer being required to top up to the 100%.
• Paternity leave: 10 days of mandatory paid leave, paid fully by the INPS.
• Parental leave: available to both parents, up to 6 months (combined maximum of 10 or 11 months) until a child turns 14. Up to 9 months are generally indemnified by INPS, with three months paid at 80% of the relevant salary and six months at 30%, subject to the applicable conditions

Other types of special leave are also provided for when supported by appropriate documentation. In terms of public holidays, there are 12 public holidays and regional saint days that are observed in Italy.

Additionally, employers should be aware of the working standards set out in the CCNL Commercio and what premiums may be payable if they are exceeded.

Standard working hours: 40 per week, Monday to Saturday allowed.

Overtime: maximum of 250 hours per year is allowed; any hours over 40/week are subject to a premium pay. Below is an overview of what premiums are mandatory in each case:

Type	Premium %
Standard overtime (from 41st to 48th hour/week)	15%
Extra overtime (after the 48th hour)	20%
Overtime on Sundays or public holidays	30%
Nighttime overtime (22:00-06:00)	50%

Contractually waiving the right to overtime pay is illegal in Italy.

Additional benefits

Beyond the statutory state pension (INPS), the CCNL Commercio offers voluntary access to a supplementary pension fund; Rivermate’s selection is the fund Fondo Fon.te. With both employer and employee contributing to it, oftentimes employees elect to allocate their Trattamento di Fine Rapporto (TFR) into this supplementary pension fund. On the employer side, the contribution is set at 1.55% of the gross salary. Quadro-level employees are mandatorily enrolled in Quadrifor (training) and Quas (supplementary health) funds.

Meal vouchers (buoni pasto) are one of the most common non-mandatory employee benefits in Italy, particularly due to the favorable tax treatment. Rivermate offers electronic meal vouchers in the amount of €8 per working day, fully covered by the employer. The vouchers are not included in TFR calculation, calculation basis for overtime or 13th and 14th salaries. The 2026 tax-exempt limit for electronic meal vouchers is €10 per working day.

Calculate employment costs

What to expect when hiring in Italy

Overall: 🟡 Moderately challenging

Easier to navigate	More challenging to navigate
🟢 Strong labor pool in tech, engineering and luxury sectors	🔴 Regions exhibit sector-based gaps and strengths; regional fragmentation in cost of living
🟡 Moderate base salary rates relative to other Western European countries	🔴 Extensive monthly employer tax and statutory contributions
🟡 Concentrated English-speaking talent in major urban sectors	🔴 Strict labor laws, termination restrictions and rigid collective bargaining agreement (CCNL)

Italy features a complex, employee-protective labor framework focused heavily on strict regulations, administrative bureaucracy and sector-specific collective bargaining agreements (CCNLs). When hiring Italian employees, international employers typically face challenges navigating intricate legislation, rigid rules and substantial employer costs. While the primary advantage of hiring in Italy is access to a highly skilled talent pool with strong regional dynamics (particularly in certain sectors), carefully structured compensation packages and accurate job-level classifications are paramount for compliance.

Hiring foreign nationals in Italy

EU/EEA and Swiss nationals can live and work in Italy without a residence or work permit. Individuals intending to stay longer than three months must register with their local municipality (Anagrafe) within 90 days of arrival.

Non-EU nationals must obtain a valid work authorization before they can be hired. This can be an EU Blue Card, a work authorization (permesso di soggiorno), a family-based residence permit that allows employment or a long-term EU residence permit. Depending on the type, the process may take anywhere from 3-6 months. Where an existing valid work permit is in place, the onboarding is identical to that of a local hire. An application for a residence permit must be submitted within eight working days of arrival in Italy.

Staying compliant when hiring in Italy

Contracts and mandatory onboarding data

Contracts in Italy must be in Italian and if they are bilingual, the Italian version prevails in case of a legal dispute. Contracts cannot be backdated and must be signed ahead of the start date as a mandatory notification (UNILAV) must be submitted to the Labor authorities at least one day prior to it. With the notification, the employee is automatically registered with INPS and INAIL.

In addition to the contract (required by Rivermate at least three days before the start date), a valid ID and an Italian Fiscal Code is also mandatory as registration cannot be completed without it. Furthermore, a tax deductions form (Detrazioni Fiscali) must be completed and signed to declare any deductions an employee is entitled to, such as those available for dependent family members.

Additionally, proof of residence is required during onboarding and acceptable documents include a residence certificate or a self-declaration. Lastly, a signed GDPR form is required before processing payroll.

Probation periods

Probation periods must be agreed in the employment contract, and maximum durations vary according to role levels. The maximum probation is set at six months (for Quadro and Level 1 roles). All other levels have a maximum probation period of 60 or 45 days. Shorter periods can be agreed on or omitted entirely if defined in the contract. An extension is allowed only if leave prolongs the probation period (such as sick leave or maternity leave), and changes are generally not permitted.

During probation periods, either party can terminate without notice. If the probation expires without notice, the employment automatically continues.

Terminations and notice periods

Different notice periods apply under CCNL Commercio depending on years of service and role level. The tables below summarize them:

EMPLOYER NOTICE PERIODS
Years of service	Quadro & Level 1	Level 2 and 3	Level 4 and 5
Up to 5	60 days	30 days	20 days
5-10	90 days	45 days	30 days
10+	120 days	60 days	45 days

EMPLOYEE NOTICE PERIODS
Years of service	Quadro & Level 1	Level 2 and 3	Level 4 and 5
Up to 5	45 days	20 days	15 days
5-10	60 days	30 days	20 days
10+	90 days	45 days	30 days

Italy allows unilateral dismissals only for supportable legal grounds. In cases of serious employee breaches, dismissal without notice is possible. Less severe breaches of obligations (unjustified absences, poor performance, violation of policies) require legal notices. A third form of dismissal happens in cases of elimination of position or redundancy. Employers should obtain local legal advice before terminating an employee.

Severance

TFR (accrued annually at about 6.91% of the TRF-eligible salary and reevaluated each year according to consumer price indexes) is deferred compensation paid out during separation, regardless of the cause. Employees can opt to direct their TFR amounts to supplementary pension funds. In cases of unfair dismissal, additional severance may be payable.

Ready to hire in Italy?

Expanding your team into Italy extends well beyond initial candidate sourcing. With Rivermate handling local employment compliance, you can focus on growing your business and hiring top talent.

Talk to an Italy Hiring Expert

Sources:
CCNL Commercio Minimum Salaries
CCNL Commercio Rules and limits
EUROSTAT Average Salaries
PwC Tax Summary Italy
Fondo Est
INPS: Parental Leave