Do you want to hire an employee in Italy without a legal entity but need an Italian payroll? IPS can help you hire and pay employees in Italy in compliance with the law, even without an Italian branch or permanent establishment.
There are 2 ways you can hire someone in Italy without a permanent establishment:
- Employer of Record (Italy) – here your employee will be hired directly by us and deployed to you full time. This is also known as employee leasing or staffing in Italy.
- Direct employment by your company, but with payroll accounting according to Italian law. This is achieved by registering your company as a foreign employer.
Both employment options offer its advantages and disadvantages. Contact us to find out which one suits your project better. We will be happy to advise you and find the best solution for your company.
IPS is your global payroll solution for a successful and fast international expansion without a permanent establishment.
Remote Work Full Time from Italy – Information for hiring employees in Italy
To make sure you succeed abroad right away, IPS is here as your international payroll partner to assist you in hiring your employees correctly in Italy and preparing Italian payroll in compliance with the laws of the country. Below is some data to help you understand the Italian payroll system.
The social security system in Italy
In Italy, it is compulsory for employees to be part of the social security system. The employer is responsible for about two thirds of the contributions, while the employee pays the remaining third. For certain areas of social security, such as old age pension or disability and survivor benefits, there is a contribution limit.
If you are an employee living in Italy, you must be insured under local law (even if your employer is not in Italy).
If your company doesn’t have a branch in Italy, you need a service like IPS to calculate and pay these social benefits correctly according to Italian law. With international payroll services in Italy from IPS, you ensure that your employee is accounted for compliantly according to Italian law.
Costs for the employer
Total salary costs
Hiring a person in Italy incurs relatively high costs. When an employee is paid in Italy, the company incurs an average of 39% in non-wage labor costs. This varies depending on whether the employee in Italy falls into the category of “salaried employee” or “leading employee”. For leading employees, the non-wage costs for a company are significantly higher than for regular employees.
Salary and bonuses
The annual salary is usually paid in 12 installments. Employees in Italy are used to receiving their salary at the beginning of the following month.
Through our international payroll management, we make sure that you do not pay more than you budgeted for!
International payroll in Italy requires compliance with Italian labor law
- Large parts of labor law in Italy are regulated by collective bargaining agreements, which means that no general statement can be made about payroll procedures in Italy, as this is highly industry-dependent.
- An Italian employee is entitled to at least 20 days of vacation. In many collective agreements, however, this number is increased. There are a total of eleven public holidays in Italy, which are supplemented by local holidays.
- As your international payroll provider in Italy, we will ensure that you are equipped with the necessary information.
Notice of termination
Notice periods are also regulated by collective agreements. However, termination agreements can also be concluded to terminate an employment relationship.
A peculiarity of Italian labor law is that severance pay is generally not paid, as it is already included in the benefits paid by the company. Around 7% of the employee’s salary must be paid as a provision for termination. This is paid to the employee at the end of the collaboration, regardless of how the collaboration is terminated.
As your international payroll company in Italy, we ensure that you do not overpay the terminated employee and that you comply with the legal framework.