Government Type: Unitary parliamentary constitutional republic
Capital: Rome
Currency: Euro (EUR)
Languages: Italian
GDP Per Capita: 44,160 USD (2019)
Main Business sectors: 73.9%
Industry: 23.9%
Agriculture: 2.1%
Employment Rate: 57.6%
Higher Education Rate: 28% of 25-34 year old’s
Global People has a significant advantage in the Italian market thanks to our experience in providing global employment solutions and in-depth understanding of the unique employment culture at each location.
When looking to employ in Italy, its incredibly important to understand the employment structure and be familiar with all employment rules and guidelines.
Global people’s services include:
Italy’s employment regulation consists of a complex system of rules provided by law and the Italian national collective bargaining agreements that differ according to sector and the level of the position and employee.
These mandatory rules set the termination procedure, minimum wages and establishment of employment relationship.
The employment relationship is managed by the employment contract, collective agreements (NCBA), the Italian civil code and Constitution and binding European rules.
Italian employees are grouped in 4 legal categories (also known as levels): executives (Dirigenti), middle managers (Quadri), White collar employees (Impiegati) and blue collar employees (Operai). These categories determine the employees minimum wages, length of probation period, duration of annual leave granted, etc.
The employment agreement or contract must comply with Italian law, collective agreements and EU rules. The agreements must refer to:
Etc.
When terminating an employee in Italy, there are 2 types of grounds:
When notice is needed, it must be notified to the other party in writing, detailing the reason of dismissal.
In cases that labour court deems the termination as unfair, the employer must either reinstate the employee or pay additional compensation.
Notice is required when the employee is dismissed due to justified reasons unless they are still under their probation period. Employees resigning are also required to give notice. The notice period is governed by the collective bargaining agreements and vary depending to enrolment level, category and seniority.
The TFR (“Trattamento di Fine Rapporto”) is the Italian severance pay. Every employer is obliged to set a side this amount and it will be paid to the employee within 6 months of leaving the company. The TFR is calculated according to the employee’s gross annual salary.
Italy does not charge a payroll tax, but they do require a flat corporate tax rate of 27.5%.
The amount of the contribution to the employee’s pension scheme is determined as a percentage of their gross salary. Employer contributions stand on approximately 33% of the employee’s gross salary, and employee contributions are 9.19%.
Social security contributions in Italy are made by both the employer and the employee. The rate of contributions depending on the category of the employee and their seniority and vary around 30% for employer and 10% for employee.
Taxable Income (EUR) | Tax rate on excess | |
| From | To | |
| 0 | 15,000 | 23% |
| 15,001 | 28,000 | 27% |
| 28,001 | 55,000 | 38% |
| 55,001 | 75,000 | 41% |
| 75,001 | + | 43% |
Most employers grant employees additional paid leave days, which amount to 5 annual weeks yearly.
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