Italy combines a rich cultural heritage with a modern, diversified economy, making it a strategic hub for businesses expanding into Southern Europe. As the third-largest economy in the Eurozone, Italy offers a highly skilled workforce across industries such as fashion, automotive, pharmaceuticals, finance, and technology. The country is home to global brands like Ferrari, Gucci, and Leonardo, while multinational corporations establish regional headquarters in Milan and Rome.

Italy’s workforce is educated, adaptable, and multilingual, with strong clusters of professionals in engineering, life sciences, design, and business services. Cities like Milan, Turin, and Bologna are innovation hubs, while Rome and Naples provide deep talent pools in government, public services, and tourism.

At the same time, Italy’s employment environment is complex. The Italian Civil Code and National Collective Bargaining Agreements (CCNLs) regulate contracts, pay structures, and benefits. Payroll and tax compliance requires navigating multiple statutory contributions to social security, health insurance, and pensions. Setting up a subsidiary can take several months, often delaying hiring.

With an Employer of Record (EOR) like Gloroots, companies can:

• Hire in Italy in days instead of months, without setting up a local entity.
• Stay compliant with Italian labor law and CCNLs.
• Streamline payroll, tax, and benefits administration.
• Focus on scaling while Gloroots manages compliance and HR operations.

What are the key facts about Italy’s economy and workforce?

Italy is the third-largest economy in the Eurozone and the eighth-largest in the world, with a GDP of over USD 2 trillion. It has a diverse economy with global strengths in fashion, automotive, design, food & beverage, tourism, and high-value manufacturing.

The Italian government is also investing heavily in digital transformation, sustainability, and green energy, making Italy increasingly attractive for technology, fintech, and renewable energy companies.

Economic Highlights

• Major Industries: Automotive (Fiat, Ferrari, Lamborghini), fashion & luxury (Gucci, Prada, Armani), life sciences & pharma (Menarini, Recordati), energy (Eni, Enel), and finance (Intesa Sanpaolo, UniCredit).
• Innovation Hubs: Milan is Italy’s financial and tech hub, Turin leads in automotive and aerospace, while Bologna and Modena specialize in engineering and manufacturing.
• Universities & Research: Universities like Politecnico di Milano, Sapienza University of Rome, and University of Bologna produce a strong pipeline of engineers, designers, and business graduates.
• Talent Competitiveness: Italy has one of Europe’s largest white-collar talent pools, with strengths in STEM, business administration, and creative industries.

Italy’s workforce is also known for multilingual capabilities—many professionals speak English, French, or German, especially in business and export-oriented sectors.

Contact us to learn how Gloroots can help you hire in Italy quickly and compliantly.

What is the work culture and talent pool like in Italy?

Italy’s workforce combines professional discipline, creativity, and strong technical expertise. Traditionally, Italian workplaces have been hierarchical, with decision-making concentrated at senior levels. However, in sectors like technology, design, and professional services, younger professionals embrace collaborative, agile models that encourage innovation.

Employees value job stability, clear communication, and strong personal relationships, but they also increasingly seek flexibility and work-life balance, particularly in hybrid and remote work setups.

White-Collar Talent Strengths

• Fashion & Design: Italy is globally recognized for design talent in luxury, fashion, and architecture.
• Engineering & Manufacturing: Strong talent pool in automotive, aerospace, and industrial design.
• Finance & Business Services: Milan is Europe’s second-largest banking hub after Frankfurt.
• Technology: Growing startup ecosystem in fintech, AI, and digital transformation.
• Healthcare & Life Sciences: Leading expertise in pharmaceuticals, biotech, and medical devices.

Key Hiring Hubs in Italy

• Milan: Finance, technology, fashion, design.
• Turin: Automotive, aerospace, R&D.
• Rome: Public services, IT, consulting, tourism.
• Bologna & Modena: Engineering, industrial manufacturing.
• Naples: Tourism, services, IT outsourcing.

Q: What is the process of setting up an entity in Italy?

Establishing a legal entity in Italy involves navigating complex bureaucracy and compliance with the Italian Civil Code and National Collective Bargaining Agreements (CCNLs). The most common structure for foreign businesses is a Società a Responsabilità Limitata (S.r.l.), equivalent to a limited liability company.

Steps to Set Up an Entity in Italy

1. Company Name Reservation – Verify and reserve name with the Italian Business Register.
2. Draft & Notarize Articles of Association – Must be notarized in Italy.
3. Deposit Minimum Capital – At least €10,000 (or €1 for simplified S.r.l.s with restrictions).
4. Register with Business Register (Registro delle Imprese) – Formal incorporation.
5. Obtain Tax Identification Numbers – For the company and directors from the Italian Revenue Agency (Agenzia delle Entrate).
6. Register for VAT – Mandatory for invoicing and tax purposes.
7. Enroll with INPS (Social Security) & INAIL (Workplace Accident Insurance) – Required for payroll and employee coverage.
8. Corporate Bank Account – Opened to process salaries and tax contributions.

Timelines

• Incorporation typically takes 3–6 months, depending on documentation and approvals.

Ongoing Compliance Requirements

• Monthly payroll and social contributions to INPS and INAIL.
• Compliance with CCNLs, which regulate wages, benefits, and working conditions across industries.
• Corporate tax filings and annual statutory audits (for larger companies).

Entity Setup vs. Gloroots EOR in Italy

Q: What are the key employment laws in Italy that employers should know?

Employment in Italy is governed by the Italian Civil Code, the Workers’ Statute (Statuto dei Lavoratori), and industry-specific National Collective Bargaining Agreements (CCNLs). These frameworks strongly protect employees and require careful compliance from employers.

Key Employment Regulations in Italy

• Employment Contracts
  • Must be in writing and in Italian.
  • Types: permanent (default), fixed-term (up to 12 months, extendable to 24 under certain conditions), apprenticeship, part-time.
  • CCNLs often regulate minimum pay, working conditions, and benefits.
• Working Hours
  • Standard: 40 hours per week, 8 hours per day.
  • Maximum: 48 hours per week, including overtime, averaged over 4 months.
• Overtime
  • Regulated by CCNLs.
  • Usually paid at 15–50% premium, depending on night, weekend, or holiday work.
• Minimum Wage
  • No statutory minimum wage.
  • Salaries are set by CCNLs for each industry/role.
• Maternity Leave
  • 5 months paid (typically 2 before and 3 after birth).
  • Covered by Social Security (INPS) at 80% of pay (employers often top up to 100%).
• Paternity Leave
  • 10 days mandatory, fully paid by INPS.
• Parental Leave
  • Up to 10 months shared between parents, paid at 30% of salary.
• Annual Leave
  • At least 4 weeks per year; additional leave may apply under CCNLs.
• Sick Leave
  • Paid by employer and INPS. Duration and pay vary by CCNL.
  • Typically: 100% for first 3 days (employer), then shared between employer and INPS.

Employment Law Snapshot – Italy

Hiring Foreign Talent in Italy: Work Visas and Immigration

Italy is a member of the European Union (EU) and the Schengen Area, which means that EU/EEA and Swiss citizens can live and work in Italy without a visa. They only need to register locally if staying longer than 90 days.

For non-EU nationals, however, employment requires a work visa and residence permit. Italy regulates immigration through the Decreto Flussi (annual quota system), though highly skilled workers have some exemptions.

Common Work Visa & Residence Options in Italy

1. National Work Visa (Visto Nazionale, Type D)
   • Requires a valid work permit issued by Italian authorities.
   • Valid for long-term employment; linked to a residence permit (permesso di soggiorno).
2. EU Blue Card
   • For highly qualified professionals with a degree or 5+ years’ experience.
   • Requires a contract with a salary at least 1.5x the national average.
   • Grants long-term residence rights in Italy and mobility across the EU.
3. ICT (Intra-Company Transfer) Permit
   • For managers, specialists, or trainees transferring within multinational companies.
   • Valid for up to 3 years (managers/specialists) or 1 year (trainees).
4. Decreto Flussi Quota Work Permits
   • Annual quotas set by the Italian government.
   • Covers seasonal workers, general employment, and certain nationalities with bilateral agreements.
5. Self-Employment Visa
   • For freelancers, entrepreneurs, and investors meeting capital and business criteria.

Employer Responsibilities in Italy

• Work Authorization: Employers must obtain a Nulla Osta (work permit) from the immigration office.
• Employment Contract: Must comply with Italian law and CCNLs.
• Social Security Registration: Mandatory with INPS.
• Tax Registration: Employees must obtain a Codice Fiscale (tax ID).

How Gloroots Simplifies Immigration in Italy

Gloroots helps foreign companies hire non-EU talent in Italy by:

• Acting as the legal employer of record for visa sponsorship.
• Handling work permit applications (Nulla Osta), residence permits, and local registrations.
• Ensuring contracts comply with CCNLs and Italian labor law.
• Coordinating with authorities, consulates, and the employee to streamline onboarding.
• Providing relocation support and guidance for a smooth transition.

Result: You gain access to Italy’s global talent pool while Gloroots manages the complexity of immigration and compliance.

Q: What are the risks of misclassification in Italy?

In Italy, the distinction between employees (lavoratori subordinati) and independent contractors (lavoratori autonomi) is heavily regulated. Misclassifying employees as contractors to avoid social contributions or employment protections is a major compliance risk. Courts and labor inspectors apply a “subordination test”, focusing on the actual working relationship, not the contract label.

Criteria for Employee vs. Contractor Status

A worker is likely an employee if:

• The company controls working hours, location, and methods of work.
• The worker uses company tools or systems.
• The worker is economically dependent on one company.
• The role is integral to the company’s operations.
• The company supervises, reviews, or evaluates performance.

A true contractor should:

• Have multiple clients.
• Control how, where, and when work is performed.
• Operate under their own VAT registration (Partita IVA).
• Bear business and financial risk.

Penalties for Misclassification in Italy

• Reclassification by Courts: Contractors can be retroactively declared employees.
• Back Payments: Employers must pay missed contributions to INPS (social security) and INAIL (work accident insurance), plus tax withholdings.
• Employee Entitlements: Retroactive annual leave, severance (TFR), overtime, and sick/maternity benefits may apply.
• Fines: Administrative penalties can reach €50,000+, depending on severity and number of workers.
• Reputational Risk: Companies risk audits, disputes, and reputational damage.

Misclassification Risk Snapshot – Italy

<table><tr><th>Criteria</th><th>Independent Contractor</th><th>Employee</th></tr><tr><td>Work Control</td><td>Decides schedule and methods</td><td>Employer sets hours and work rules</td></tr><tr><td>Tools & Resources</td><td>Own tools, Partita IVA</td><td>Company-provided tools, under direction</td></tr><tr><td>Payment</td><td>By invoice, variable</td><td>Regular salary, benefits included</td></tr><tr><td>Economic Dependence</td><td>Multiple clients</td><td>One main employer</td></tr><tr><td>Legal Risk</td><td>Possible audit</td><td>Full labor law protections apply</td></tr></table>

Use our Misclassification Risk Calculator to assess your compliance exposure in Italy.

Q: How does an EOR help you run payroll in Italy?

Payroll in Italy is highly regulated, involving multiple authorities, contributions, and reporting requirements. Employers must ensure compliance with the Italian Revenue Agency (Agenzia delle Entrate), Social Security Institute (INPS), and Workplace Accident Insurance Authority (INAIL). Collective Bargaining Agreements (CCNLs) often add further payroll obligations.

Payroll Compliance Requirements in Italy

• Payroll Cycle
  • Salaries are typically paid monthly, no later than the last working day.
  • Employees are entitled to the 13th-month salary (tredicesima) in December, and in many industries, a 14th-month salary (quattordicesima) in June or July, depending on CCNL.
• Mandatory Deductions
  • Income Tax (IRPEF): Progressive, withheld at source by employers.
  • Social Security Contributions (INPS): Shared between employer and employee.
  • Accident Insurance (INAIL): Employer-paid, rate depends on industry risk.
• Employer Contributions (~30% of gross salary)
  • Pension fund, unemployment, maternity/paternity, family allowances, and accident insurance.
• Employee Contributions (~10% of gross salary)
  • Withheld by employer and remitted to INPS.
• Payslips
  • Employers must issue a detailed cedolino paga showing gross pay, deductions, CCNL entitlements, and net pay.
• Reporting
  • Monthly filings with INPS and INAIL.
  • Year-end declarations to the Agenzia delle Entrate and employees.

Risks of In-House Payroll

• Failure to comply with CCNL obligations (e.g., 14th-month salary) can result in fines.
• Errors in INPS or INAIL contributions may trigger audits and back payments.
• Late tax filings can incur penalties from the Italian Revenue Agency.

How Gloroots Simplifies Payroll in Italy

Gloroots, as your Employer of Record, manages the entire payroll process:

• Salary & Bonus Management: Handles monthly payroll and mandatory 13th/14th salaries.
• Compliance Built-In: Manages IRPEF, INPS, and INAIL contributions.
• Transparent Payslips: Provides compliant Italian payslips for employees.
• CCNL Alignment: Ensures sector-specific wage and allowance compliance.
• End-to-End Reporting: Files all required declarations with INPS, INAIL, and tax authorities.

Result: Your employees in Italy are paid accurately, on time, and in full compliance with national and sector laws—without the burden of local payroll complexity.

Q: How does tax compliance work in Italy?

Tax compliance in Italy involves progressive income taxes, mandatory social security contributions, and corporate tax obligations. Employers are responsible for withholding and remitting employee taxes and contributions, while also making employer-side payments.

Personal Income Tax (IRPEF) – 2025 Rates

Italy applies a progressive tax system on individual income:

• Up to €28,000 → 23%
• €28,001 – €50,000 → 35%
• Above €50,000 → 43%

Additional:

• Regional surtax: 0.7% – 3.33% (varies by region).
• Municipal surtax: Up to 0.9% (varies by municipality).

Social Security Contributions (INPS)

• Employer: ~27–30% of gross salary (varies by sector, company size, and location).
• Employee: ~9–10% of gross salary (withheld at source).
• Covers pensions, unemployment, maternity/paternity, and family allowances.

Accident Insurance (INAIL)

• Employer-only contribution.
• Rate varies by industry risk classification.

Corporate Income Tax (IRES & IRAP)

• IRES (Corporate Tax): 24% standard rate.
• IRAP (Regional Tax): 3.9% (higher in some regions/sectors).

Employer Compliance Duties

• Withhold IRPEF and employee INPS from salaries.
• Pay employer INPS and INAIL contributions.
• File monthly payroll reports with INPS & INAIL.
• File annual declarations with the Italian Revenue Agency (Agenzia delle Entrate).

Tax Compliance: Direct Entity vs. Gloroots EOR in Italy

Q: What benefits and entitlements do employees in Italy receive?

Italy provides one of Europe’s most comprehensive benefits frameworks, with entitlements established by the Italian Civil Code, Statuto dei Lavoratori, and National Collective Bargaining Agreements (CCNLs). Employers must comply with statutory protections and often offer additional perks to remain competitive.

Statutory Benefits

• Annual Leave
  • Minimum of 4 weeks per year (20 working days).
  • Many CCNLs provide additional days.
• Public Holidays
  • 12 national holidays + regional holidays.
• Maternity Leave
  • 5 months fully paid (typically 2 before and 3 after birth).
  • Funded at 80% of pay by INPS, often topped up to 100% by employers.
• Paternity Leave
  • 10 days mandatory, fully paid.
• Parental Leave
  • Up to 10 months shared between parents, paid at 30% of salary.
• Sick Leave
  • Covered jointly by employer and INPS.
  • Employers typically cover the first 3 days at 100%. INPS covers longer absences at 50–66% depending on tenure.
• Severance Pay (TFR – Trattamento di Fine Rapporto)
  • Mandatory for all employees.
  • Accrued annually (about 1 month’s salary per year of service) and paid upon termination.
• Social Security (INPS & INAIL)
  • Covers pensions, unemployment, disability, healthcare, and work injury protection.

Common Additional Benefits

• Private Health Insurance – Supplements the public system.
• Meal Vouchers (Buoni Pasto) – Tax-efficient, widely offered.
• Transport Allowances – Especially in large cities like Milan and Rome.
• Company Cars / Mobile Phones / Devices – Standard for managerial roles.
• Performance Bonuses & Profit Sharing – Common in finance and corporate roles.
• Flexible Work & Remote Options – Increasingly standard in tech and services.

Employee Benefits Snapshot – Italy

How Gloroots Helps

Gloroots ensures your Italian workforce receives all mandatory entitlements while helping you design competitive global benefits packages. From health insurance and meal vouchers to equity and devices, we handle administration and compliance seamlessly.

Q: What’s involved in hiring and onboarding employees in Italy?

Hiring in Italy requires compliance with the Italian Civil Code and industry-specific Collective Bargaining Agreements (CCNLs). Employers must ensure contracts, registrations, and onboarding steps are correctly executed to avoid penalties.

Steps for Hiring and Onboarding Employees in Italy

1. Employment Contract
   • Must be in writing and in Italian.
   • Permanent contracts are the default; fixed-term contracts allowed under strict conditions (max 12 months, extendable to 24).
   • Must include: role, salary, working hours, CCNL reference, probation, and benefits.
2. Probation Periods
   • Length depends on role and CCNL:
     • Up to 6 months for executives.
     • Typically 3 months for white-collar staff.
3. Mandatory Registrations
   • Register new employees with INPS (Social Security) and INAIL (Workplace Accident Insurance) before work begins.
   • File UNILAV form with the Ministry of Labour, notifying authorities of the hire.
4. Health & Safety Training
   • Employers must provide occupational safety training under Italian law.
5. Payroll Setup
   • Employees must receive a Codice Fiscale (tax ID).
   • Payroll must include IRPEF tax, INPS, and INAIL contributions.
6. Onboarding Process
   • Provide an induction into company policies and CCNL rules.
   • Deliver equipment (laptops, mobiles) and set up workplace safety protocols.
   • Many employers also provide meal vouchers and transport allowances from day one.

Hiring & Onboarding: Direct Entity vs. Gloroots EOR in Italy

How Gloroots Simplifies Onboarding in Italy

• Provides bilingual contracts (Italian + English).
• Registers employees with INPS, INAIL, and Labour Ministry.
• Ensures compliance with CCNL-specific requirements.
• Integrates payroll, benefits, and equipment delivery.
• Creates a seamless onboarding experience that’s both compliant and employee-friendly.

Q: How do you successfully manage a workforce in Italy?

Managing employees in Italy requires balancing strict labor compliance with employee engagement and retention strategies. The Italian Civil Code, Statuto dei Lavoratori, and industry-specific Collective Bargaining Agreements (CCNLs) set the legal baseline, while competitive employers go beyond statutory minimums to attract and retain top talent.

Key Considerations for Workforce Management

1. Compliance with CCNLs
   • Each industry operates under a CCNL that regulates salaries, hours, leave, overtime, bonuses, and benefits.
   • Employers must strictly apply the CCNL relevant to their sector.
2. Workplace Culture
   • Italian workplaces are traditionally hierarchical, with strong respect for seniority.
   • Younger professionals in tech, startups, and creative industries prefer collaborative, flexible environments.
   • Personal relationships and trust play an important role in professional interactions.
3. Employee Expectations
   • Beyond statutory entitlements, employees often expect meal vouchers, private health insurance, performance bonuses, and flexible work arrangements.
   • 13th and 14th month salaries are standard under many CCNLs.
4. Retention & Motivation
   • Training, career progression, and performance management are key to retention.
   • Offering remote/hybrid work options is increasingly important post-pandemic.
5. Employee Representation
   • Unions and works councils (RSA/RSU) are influential in many industries.
   • Employers must respect collective rights and engage in negotiations when required.

How Gloroots Supports Workforce Management in Italy

Gloroots helps you manage your Italian workforce effectively by:

• Ensuring compliance with labor laws and CCNLs.
• Handling payroll, INPS, and INAIL filings.
• Offering curated global benefits to keep employees motivated.
• Providing HR and compliance support for managing unions and works councils.
• Delivering devices (laptops, mobiles) to EOR employees for hybrid and remote work setups.

Result: You get the best of Italy’s workforce without the compliance burden.

Q: What are the key steps and requirements in terminating employees in Italy?

Italy has some of Europe’s most employee-protective termination laws, making dismissals complex and highly regulated. Employers must comply with the Italian Civil Code, Statuto dei Lavoratori, and applicable CCNLs (Collective Bargaining Agreements) to avoid claims of unfair dismissal.

Grounds for Termination

• Just Cause (Giusta Causa): Serious misconduct (e.g., theft, fraud, gross insubordination). Allows immediate dismissal without notice.
• Justified Subjective Reason (Giustificato Motivo Soggettivo): Employee misconduct that is less severe but still serious (e.g., repeated performance issues). Requires notice.
• Justified Objective Reason (Giustificato Motivo Oggettivo): Economic or organizational reasons (e.g., restructuring, redundancy). Requires notice and severance.
• Mutual Agreement: Employer and employee agree on terms of termination, often with settlement compensation.

Notice Periods

• Defined by CCNLs and depend on role and seniority.
• Typically:
  • 15 days – 6 months of service.
  • 30–120 days for employees with longer tenure or senior roles.
• Executives often have longer notice (up to 6 months).

Severance Pay (TFR – Trattamento di Fine Rapporto)

• Mandatory for all employees.
• Accrued annually (~1 month’s salary per year of service).
• Paid at termination, regardless of dismissal reason.

Probationary Periods

• Allowed but must be stated in contract.
• Length depends on CCNL and role:
  • 3–6 months for most roles.
  • Up to 6 months for executives.

Termination Snapshot – Italy

How Gloroots Supports Terminations in Italy

• Ensures compliance with notice periods, CCNL rules, and severance obligations.
• Prepares legally compliant documentation to avoid disputes.
• Manages final payroll settlements, including unused leave, bonuses, and TFR.
• Acts as a buffer in handling sensitive exits, reducing employer liability.

Q: What is the offboarding process in Italy?

Offboarding in Italy is a structured and compliance-heavy process, regulated by the Italian Civil Code, Statuto dei Lavoratori, and sector-specific CCNLs. Employers must complete final settlements, statutory filings, and documentation to ensure a lawful termination.

Key Steps in Offboarding Employees in Italy

1. Formal Termination Notice
   • Provide written notice citing the dismissal ground (just cause, justified reason, redundancy, or mutual agreement).
   • Respect statutory or CCNL-defined notice periods.
2. Final Payroll Settlement
   • Pay all outstanding wages up to the termination date.
   • Compensate for unused annual leave and accrued 13th/14th-month salary installments.
   • Pay severance (TFR – Trattamento di Fine Rapporto), accrued during employment.
3. Social Security & Tax Deregistration
   • Deregister the employee with INPS (Social Security) and INAIL (Workplace Accident Insurance).
   • File final withholdings and contributions with the Agenzia delle Entrate (Tax Authority).
4. Exit Documentation
   • Provide a Certificazione Unica (CU) summarizing income and tax contributions.
   • Issue a certificate of employment if requested.
   • Provide any additional CCNL-required documentation.
5. Company Property Return
   • Collect laptops, mobile devices, access cards, or company cars.
   • Ensure proper data security and confidentiality.
6. Knowledge Transfer & Exit Interview
   • Facilitate structured handover of responsibilities.
   • Conduct exit interviews to maintain employer brand and gather feedback.

How Gloroots Simplifies Offboarding in Italy

• Ensures timely final settlements including salary, TFR, and pro-rata bonuses.
• Handles deregistration with INPS, INAIL, and tax authorities.
• Prepares compliant exit documentation (CU, certificates, CCNL requirements).
• Manages collection of devices and sensitive data return.
• Reduces legal exposure by ensuring offboarding aligns with Italian labor law.

Result: With Gloroots, offboarding in Italy is smooth, compliant, and employee-friendly, minimizing disputes and protecting employer reputation.

Q: What costs and financial planning do you need with an Employer of Record in Italy?

Hiring in Italy comes with significant mandatory contributions, bonuses, and severance liabilities. Employers must plan beyond gross salary, as the total cost of employment (TCE) is typically 30–40% higher than base pay.

Key Employment Cost Components in Italy

1. Base Salary
   • Varies by role, region, and CCNL.
   • Example (2025 benchmarks):
     • Software Engineer (mid-level): €40,000–€55,000/year.
     • Finance Analyst: €35,000–€50,000/year.
     • Marketing Specialist: €30,000–€45,000/year.
2. Mandatory Bonuses
   • 13th-month salary (tredicesima): Paid in December.
   • 14th-month salary (quattordicesima): Required in many CCNLs, usually in June or July.
3. Employer Social Contributions (INPS & INAIL)
   • ~27–30% of gross salary.
   • Covers pensions, unemployment, maternity/paternity, healthcare, and accident insurance.
4. Employee Contributions
   • ~9–10% of gross salary (withheld at source).
5. Paid Leave Costs
   • 4 weeks annual leave + 12 national holidays + CCNL-specific holidays.
   • Paid parental, maternity/paternity, and sick leave obligations.
6. Severance Pay (TFR)
   • Mandatory accrual (~1 month’s salary per year of service).
   • Paid at termination, regardless of cause.
7. Additional Benefits (Market-Standard)
   • Private healthcare (€1,000–€2,000/year per employee).
   • Meal vouchers (€100–€150/month).
   • Transport allowances, flexible work stipends, or equity plans.

How Gloroots Optimizes Cost Planning

Gloroots simplifies cost management by:

• Charging a transparent monthly EOR fee covering payroll, compliance, and HR administration.
• Consolidating all INPS, INAIL, and tax contributions into one predictable invoice.
• Providing salary benchmarks for Italy’s key industries.
• Helping you design competitive global benefits without overspending.

Cost Comparison: Own Entity vs. Gloroots EOR in Italy

Q: What challenges might you face, and how do you solve them using an EOR in Italy?

Italy’s workforce offers world-class skills in design, engineering, and finance — but navigating the legal and administrative landscape is one of the biggest hurdles for foreign employers. Without local expertise, companies risk delays, missteps, and compliance penalties.

Key Hiring Challenges in Italy

1. Complex Labor Laws & CCNLs
   • Italy does not have a statutory minimum wage; instead, salaries, working hours, bonuses, and allowances are defined by National Collective Bargaining Agreements (CCNLs).
   • Challenge: Foreign companies often underestimate CCNL obligations, leading to non-compliance.
2. High Employment Costs
   • Employer social contributions (~30%), 13th/14th salaries, and mandatory TFR severance accruals make the total cost of employment significantly higher than gross salary.
   • Challenge: Budgeting errors and unplanned liabilities.
3. Payroll & Tax Compliance
   • Employers must withhold IRPEF (income tax), pay INPS/INAIL contributions, and manage monthly/annual filings.
   • Challenge: Errors can trigger audits, fines, or disputes.
4. Termination Complexity
   • Italy has strict dismissal laws, requiring just cause, long notice periods, and mandatory severance.
   • Challenge: Mishandling exits can lead to costly litigation.
5. Slow Bureaucracy & Entity Setup
   • Incorporation takes 3–6 months, delaying hiring.
   • Challenge: Lost opportunities in fast-moving industries like tech and consulting.

How Gloroots Solves These Challenges

Gloroots acts as your Employer of Record in Italy, handling compliance and HR operations so you can focus on growth.

• CCNL Compliance: Ensures contracts, salaries, and benefits follow the right industry agreement.
• Payroll & Contributions: Automates IRPEF, INPS, and INAIL deductions and filings.
• Cost Predictability: Bundles contributions, bonuses, and TFR accruals into one transparent monthly fee.
• Termination Management: Ensures compliant exits with correct notice, severance, and documentation.
• Faster Hiring: Hire employees in 2–5 days without waiting months to establish a legal entity.

Challenge vs. Solution: Direct Entity vs. Gloroots EOR

Conclusion

Italy is one of Europe’s most dynamic economies, combining global leadership in fashion, design, engineering, and finance with an increasingly strong technology and startup ecosystem. For employers, Italy offers a highly skilled, multilingual, and creative workforce.

At the same time, Italy’s labor market is governed by complex employment laws and CCNLs, with high payroll contributions, mandatory bonuses, and strict termination rules. Setting up a local entity can take months and expose companies to compliance risks.

With Gloroots as your Employer of Record in Italy, you can:

• Hire employees in 2–5 days without opening a subsidiary.
• Stay compliant with the Civil Code, Statuto dei Lavoratori, and CCNLs.
• Offer competitive employee benefits packages.
• Streamline payroll, taxes, and compliance.
• Focus on building and scaling your Italian team while Gloroots manages the complexity.

Gloroots makes global hiring in Italy simple, compliant, and fast.

Start hiring in Italy today.