Employer of Record in San Marino

Hiring employees in San Marino requires a clear understanding of the local legal and administrative landscape. For companies looking to expand their workforce into this microstate, navigating the specific employment regulations, social security contributions, and tax obligations is crucial. Establishing a local presence typically involves significant time and financial investment to ensure full compliance with San Marino's unique regulatory framework.

Companies seeking to engage talent in San Marino have a few primary options. They can opt to establish their own legal entity within the country, which entails a full setup process including registration, setting up payroll, and managing local compliance. Alternatively, for a more streamlined approach, businesses can leverage the services of an Employer of Record. A third option involves hiring individuals as independent contractors, though this carries its own set of compliance considerations regarding proper classification and avoiding misclassification risks.

• Establishing a local entity: Setting up a subsidiary or branch office, managing all legal, HR, and payroll functions internally.
• Utilizing an Employer of Record (EOR): Partnering with a third-party service like Rivermate that legally employs the workers on your behalf.
• Hiring independent contractors: Engaging individuals for project-based work, requiring careful consideration of worker classification rules.

How an EOR Works in San Marino

An Employer of Record simplifies the process of hiring in San Marino by handling all legal and administrative aspects of employment. The EOR acts as the legal employer, ensuring that all local regulations are met, while you maintain full operational control over your employees.

• Payroll processing and tax withholding: The EOR manages accurate and timely payroll, including deductions for income tax and social security contributions as required by San Marino law.
• Compliance with local labor laws: This includes adherence to employment contracts, working hours, leave entitlements, and termination procedures specific to San Marino.
• Benefit administration: The EOR facilitates and manages statutory benefits, such as social security, health insurance, and any other locally mandated provisions.
• Employment contracts: Drafting and managing compliant employment contracts in line with San Marino's legal framework.
• Termination procedures: Handling all aspects of employee termination, ensuring legal compliance and mitigating risks.

Benefits of Using an EOR in San Marino

Partnering with an Employer of Record offers significant advantages for businesses aiming to expand into San Marino without the complexities of establishing a local entity.

• Rapid market entry: Hire employees quickly without the delays associated with company registration and legal setup.
• Reduced legal and compliance risks: Transfer the burden of navigating complex San Marino labor laws, payroll, and tax regulations to an expert.
• No need for local entity establishment: Avoid the significant costs and administrative overhead of setting up and maintaining a legal presence.
• Focus on core business: Free up internal resources by outsourcing HR, payroll, and compliance tasks.
• Access to local expertise: Benefit from an EOR's in-depth knowledge of San Marino's employment landscape.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in San Marino includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in San Marino.

Employers in San Marino must contribute approximately 24.9% of employees' gross salaries to social security (ISS) to fund pensions, healthcare, and unemployment benefits. They are also responsible for withholding income tax (IRPEF) from employees' salaries, which is calculated based on progressive brackets: 9% for €0-15,000, 20% for €15,001-30,000, 30% for €30,001-50,000, and 35% for amounts over €50,000. Additionally, payroll taxes such as professional training levies may apply.

Employees benefit from deductions including around 10.5% social security contributions, healthcare, education, pension contributions, and charitable donations, reducing taxable income. Employers must submit monthly payroll reports and remit withheld taxes and social security contributions promptly, with annual tax returns due in the first quarter of the following year.

Foreign workers and companies must consider tax treaties, residency rules, and potential permanent establishment status, which can influence tax obligations and benefits, including allowances for housing, transportation, and education expenses. Staying updated on local regulations is essential for compliance.

Salaries in San Marino vary by industry and role, with typical annual ranges such as EUR 30,000–50,000 for accountants and EUR 40,000–70,000 for software developers. The country’s key sectors include finance, tourism, manufacturing, retail, and IT, often benchmarked against Italian standards due to economic ties. Employers should note that salary levels are influenced by experience, qualifications, and company size, with competitive packages including bonuses and allowances.

The statutory minimum wage in 2025 is approximately EUR 1,600 per month, applicable to most employees, with some variations for trainees or apprentices. Employers must comply with wage laws, which may be supplemented by industry-specific collective bargaining agreements. Common additional benefits include performance, annual, holiday bonuses, and allowances for transportation, meals, or housing, depending on employment terms.

Payroll is typically processed monthly via bank transfers, with employers responsible for withholding taxes and social security contributions. Salary trends indicate moderate growth driven by demand for skilled workers in IT, finance, and tourism, with expected increases in compensation packages to attract talent amid ongoing economic development.

Employees in San Marino are entitled to a minimum of 4 weeks (20 working days) of paid annual vacation leave, which accrues monthly and is typically scheduled by mutual agreement. Unused leave may be carried over within certain limits, and employees receive their regular salary during this period. Public holidays, observed on specific dates, generally grant paid time off; working on these days usually entitles employees to additional compensation.

San Marino provides various leave types with specific regulations:

• Sick leave: duration and compensation vary, requiring medical certification for extended absences.
• Parental leave: maternity (around 5 months), paternity (about 15 days), and adoption leave, with compensation often a percentage of salary.
• Other leaves include bereavement, study, and sabbatical, with terms depending on employment agreements.

Employees in San Marino are entitled to mandatory benefits such as social security contributions, paid leave (minimum four weeks annually), public holidays, sick leave, maternity/paternity leave, and severance pay, all governed by local labor laws. Employers must contribute to the social security system (ISS), which funds pensions, healthcare, and unemployment benefits. The contribution rates vary and should be verified regularly.

Optional benefits commonly offered include supplementary private health insurance, life insurance, meal and transportation allowances, professional development opportunities, company cars, and performance bonuses. These perks help attract and retain talent, especially in larger companies and specific industries like finance and tech.

San Marino's healthcare system provides basic public coverage funded through social security, with some employers offering private supplementary insurance for broader and faster access. The pension system is primarily social security-based, with some employers providing additional pension plans. Benefit costs, including social security contributions and optional perks, are significant considerations for employers aiming to stay compliant and competitive.

Employment agreements in San Marino must comply with specific legal standards to ensure validity and enforceability. They serve to clarify the working relationship, protect rights, and reduce disputes, covering key aspects such as contract type, clauses, probation, and termination.

San Marino recognizes several contract types:

Employers must adhere to regulations regarding contract content and conditions to avoid legal issues. Understanding these requirements is vital for both local and international businesses operating in San Marino.

San Marino is gradually adapting its evolving labor laws to accommodate remote work, emphasizing clear employment contracts, health and safety responsibilities, and compliance with working hours. Employers must provide necessary equipment, ensure data protection aligned with GDPR, and maintain regular communication with remote employees. Flexibility options include remote work, part-time, and flexible hours, with policies tailored to business needs.

Key data points for employers:

San Marino's focus on data privacy, cybersecurity, and flexible arrangements aims to support productive remote work environments while ensuring legal compliance and operational efficiency.

In San Marino, employment termination must follow strict legal procedures, with specific notice periods based on employee classification and tenure. White-collar workers require 15 to 45 days' notice depending on years of service, while blue-collar workers need 8 to 20 days. Employers must provide written notice, adhere to notice periods, and ensure proper documentation to avoid legal issues.

Severance pay (indennità di anzianità) is mandatory for employees terminated without just cause, typically calculated as around 15 days' salary per year of service. Employees dismissed for just cause, such as misconduct, are generally not entitled to severance. Termination can be with or without cause, with different procedural and severance implications. Employees are protected against wrongful dismissal and can challenge unfair terminations in court, where the employer bears the burden of proof to justify the dismissal.

San Marino's freelance sector is growing, with businesses engaging independent contractors across various industries such as IT, marketing, finance, tourism, and construction. Employers must understand local legal distinctions between employees and contractors to ensure compliance; contractors generally control their work, operate independently, have multiple clients, bear risks, and provide their own tools.

Contracts should clearly define scope, payment, IP rights, and termination, with common structures including fixed-price, time-based, or retainer agreements. Contractors are responsible for their own taxes, social security, VAT (if applicable), and insurance. Key data points include:

This setup allows flexibility but requires careful legal and financial planning to ensure proper compliance and protection for both parties.

San Marino's work permit system requires foreign nationals to secure a valid job offer, employer sponsorship, and meet specific criteria such as educational qualifications, clean criminal record, health clearance, and proof of accommodation. The application process involves employer submission to the Labor Office, documentation review, and subsequent visa application, typically taking 2-4 months with fees that vary. Once approved, employees must register locally and obtain a residence permit.

Key visa types include the Work Visa, Self-Employment Visa, Highly Skilled Worker Visa, and Intra-Company Transfer Visa. For long-term residence, individuals with 5-10 years of continuous legal stay, stable employment, financial stability, and societal integration can apply for permanent residency, which involves submitting a comprehensive application and undergoing review.

Employers and employees have specific compliance obligations, including sponsorship, reporting changes, maintaining documentation, and adhering to visa conditions. Dependents such as spouses and children can apply for visas to join the primary worker, provided they submit necessary proof of relationships and financial support.