Employer of Record in Italy: 2026 Cost and Compliance Guide

Italy offers strong engineering, design, manufacturing and sales talent, with hubs in Milan, Turin, Rome and Bologna. Salaries are moderate by Western European standards, but employer costs are high: social security contributions to INPS of around 27% of gross pay, workplace accident insurance (INAIL) and a mandatory severance accrual, the TFR, of about 7.4% of annual pay.

Without an Italian company, an Employer of Record (EOR) can employ your hire under an Italian contract and the applicable national collective agreement (CCNL), run payroll and handle INPS, INAIL and tax filings. You direct the day-to-day work.

Italy also restricts supplying workers to another business: it is lawful through agencies authorised under Legislative Decree 276/2003 (somministrazione di lavoro). This guide explains why that matters for EOR arrangements, along with the full cost picture, the rules that drive it, how providers compare on published pricing, and when an Italian S.r.l. makes more sense. Figures link to official sources. We do not test or use the providers listed; see our methodology.

An Employer of Record is a company with a legal entity in Italy that employs staff for foreign businesses. It signs the Italian employment contract, files the mandatory hiring notice (comunicazione obbligatoria), registers the employee with INPS and INAIL, withholds income tax (IRPEF), applies the collective agreement, accrues the TFR, and manages leave and terminations.

You pay the EOR a monthly invoice covering salary, employer contributions, the TFR accrual and its fee. The employee works in your team and follows your direction, while the EOR carries the formal employer obligations.

Italian law provides a specific route for one business to place its employees under another's direction: labour supply (somministrazione di lavoro) by an agency authorised under Legislative Decree 276/2003. If a supply contract isn't in writing, it is void and the workers count as the client's employees; if it breaches the statutory limits and conditions, the worker can ask to be employed directly by the client from the start. Ask each provider how its Italian model complies.

Italian employment cost has four layers: gross salary (usually paid in 13 or 14 instalments), employer social security to INPS (about 27%), the TFR severance accrual (about 7.4%) and INAIL insurance, plus the EOR fee.

Rates vary with the sector, company size and the employee's category under the collective agreement. The estimates below use typical rates for an office employee (impiegato) at a larger services company.

Annual cost at example salaries

What these figures include and exclude

• INPS rates differ by sector (industry, commerce, services), company size and the employee's category (white-collar impiegati, blue-collar operai, managers dirigenti). Your EOR should confirm the exact rates.
• A pension contribution ceiling (massimale) applies only to employees with no pension contributions before 1996. It is not applied in these estimates.
• Employee social security (about 9.2%) and IRPF income tax with regional and municipal surcharges are deducted from gross pay and are not employer costs.
• The TFR is a real cost even though it is paid out later: it accrues every year and is revalued annually.
• Collective agreements can add costs, such as supplementary health funds, seniority increases and additional allowances.

Estimate your own cost

Enter a salary to see the estimated annual cost, including mandatory employer contributions and an EOR fee. Change the fee to match the quotes you receive.

Italian employment is shaped by the Civil Code, specific statutes and, above all, the applicable national collective agreement (CCNL), which sets minimum pay, job levels, notice and many other terms. Your EOR should confirm which CCNL applies to your hire.

Employment contracts

A fixed-term contract can run for up to 12 months. It can run longer, up to 24 months, only in cases set by collective agreements, for technical, organisational or production needs agreed by the parties under the company's collective agreement (until 31 December 2026), or to replace other workers. Successive fixed-term contracts with the same worker for the same level of work are also capped at 24 months in total. Breaching either limit turns the contract into a permanent one.[7]

The term must be in writing (except for contracts of up to 12 days), with a copy given to the employee within five working days of starting.

Labour supply (somministrazione)

An agency authorised under Legislative Decree 276/2003 may supply its own employees to work under a client's direction and control. A supply contract that isn't in writing is void and the workers count as the client's employees; if the supply breaches the statutory limits and conditions, the worker can ask to be employed by the client from the start of the assignment.[7]

Probation period

Set by the collective agreement. Under the commerce and services agreement (CCNL Terziario), the maximum is six months for managers (Quadri) and level I, 60 days of actual work for levels II to V and 45 days for levels VI and VII. Either side can end the contract at any time during probation without notice; the employee still receives the accrued TFR, 13th and 14th salaries and holiday pay.[11]

Working time

The normal working week is 40 hours; collective agreements can set fewer hours or average them over up to a year. Average weekly working time, including overtime, can't exceed 48 hours, measured over up to four months (extendable to six or twelve months by collective agreement).[6]

Overtime

Overtime must be kept limited and is paid separately at the premiums set by the collective agreement, which can also allow compensatory rest instead of or as well as the premium. Without an applicable collective agreement, overtime needs the employee's agreement and is capped at 250 hours a year.[6]

Annual leave

At least four weeks of paid leave a year. Unless a collective agreement says otherwise, at least two weeks must be taken in the year they're earned (consecutively if the employee asks) and the rest within 18 months after that year. The four-week minimum can't be paid out instead of taken, except when employment ends.[6]

13th and 14th salaries

Set by the collective agreement. Under the commerce and services agreement, employees receive a 13th month's pay (tredicesima) on Christmas Eve and a 14th (quattordicesima) on 1 July, each equal to one month's actual pay and reduced pro rata for part-year service.[11]

Maternity and paternity leave

Compulsory maternity leave of five months: two months before the expected birth and three after, or, if doctors certify it is safe, all five months after the birth. It carries an allowance of 80% of pay. Fathers must take ten working days of paternity leave (20 for multiple births) between two months before and five months after the birth, paid at 100%.[9]

Both allowances are paid in the same way as sickness benefit. Maternity leave counts towards length of service, the 13th salary and annual leave.

Dismissal

A dismissal needs just cause or a justified subjective or objective reason. For employees hired since 7 March 2015, if a court finds no valid reason it ends the employment and awards compensation of between 6 and 36 months' pay, set by the judge. If the fact alleged to justify the dismissal is shown not to exist, the court orders reinstatement plus up to 12 months' back pay and contributions.[8]

The original formula of two months' pay per year of service was struck down by the Constitutional Court in 2018, so the amount is now set case by case within the range. Employers below the statutory size threshold pay half these amounts and aren't subject to reinstatement for non-existent facts; since a 2025 Constitutional Court ruling, their compensation is no longer capped at six months.

Notice and TFR on termination

Set by the collective agreement by job level and length of service. Under the commerce and services agreement, employer notice of dismissal ranges from 15 to 60 calendar days with up to five years' service (levels VII to I and Quadri), 20 to 90 days with five to ten years, and 20 to 120 days beyond ten years. Pay in lieu of notice includes the 13th and 14th salary accruals.[11]

The accrued TFR is paid on any termination, including resignation (Codice Civile art. 2120).

These EOR providers publish information about employing in Italy. Prices are their own published starting rates in USD. Quote-only providers are marked.

In Italy, ask each provider whether it employs through its own Italian entity, an authorised employment agency or a partner, and get the answer in writing.

For Italy-specific selection criteria and a shortlist, see best EOR providers in Italy. For each provider's products and pricing model, see the provider directory.

The main alternative is a limited liability company (S.r.l.) or a branch of your foreign company. An S.r.l. is formed by a deed drawn up by a notary (atto pubblico) setting out the shareholders, name, registered office, business purpose, capital, shareholdings, governance and directors. The minimum share capital is €10,000, but it can be set as low as €1 if it is paid in full in cash; until reserves and capital together reach €10,000, at least a fifth of each year's profits must go to a reserve. The company is then registered with the Companies Register (Registro delle Imprese) and with INPS and INAIL as an employer.

Ongoing costs come from the accountant (commercialista), the payroll consultant (consulente del lavoro), tax filings, annual accounts and banking. Company profits are subject to corporate income tax (IRES) at 24% and the regional production tax (IRAP) at a standard 3.9%, which regions can raise or lower by up to 0.92 points and which is higher for banks and insurers. A reduced 20% IRES rate applied for 2025 only, to companies that retained and reinvested profits and increased employment.

For a step-by-step version of this calculation, see EOR vs local entity: a break-even framework.

1. 1

   Define the role and annual salaryDay 0

   Agree an annual gross salary (RAL) and check it against the minimum for the job level in the applicable CCNL.

2. 2

   Identify the collective agreement

   Ask the EOR which CCNL and job level apply. They set minimum pay, the number of salary payments, notice and benefits.

3. 3

   Compare itemised quotes1–3 days

   Request Italy-specific quotes covering the fee, deposit, TFR handling, benefits, FX margin and offboarding. Use the estimator to sanity-check totals.

4. 4

   Sign the service agreement

   Review liability for dismissal costs, IP assignment, data protection (GDPR) and the provider's Italian structure.

5. 5

   Contract and hiring notice2–7 days

   The EOR issues an Italian contract and files the mandatory hiring notice before the start date. The employee provides their tax code (codice fiscale) and bank details.

6. 6

   Payroll and ongoing administrationMonthly

   Monthly payroll with IRPF withholding, INPS and INAIL contributions, TFR accrual and the 13th (and 14th) salary.

Rates and rules on this page are based on the following official sources. Numbers in brackets in the tables above link to these entries.

1. 1
   INPS: aliquote contributive

   Istituto Nazionale della Previdenza Sociale (INPS)

   IVS pension rate of 33% for employees in the general fund (AGO); other contributions depend on sector, company size, legal form and worker category (updated 27 September 2024).

2. 2
   INPS Circolare n. 88 del 31 ottobre 2023

   Istituto Nazionale della Previdenza Sociale (INPS)

   Page 10: the 33% IVS rate is split as in the general fund for employees, 23.81% employer and 9.19% employee (D.Lgs. 166/1997, art. 1).

3. 3
   NASpI and training contributions

   INPS / Normattiva

   INPS circ. 25/2022, p. 2: NASpI financed at 1.30% + 0.01% = 1.31% (Law 92/2012, art. 2(25)). INPS circ. 32/2025, p. 6: 0.30% training contribution (Law 845/1978, art. 25). Law 92/2012, art. 2(28): extra 1.4% on fixed-term contracts, +0.5 points per renewal.

4. 4
   INAIL Circolare n. 38 del 24 giugno 2025 (voce di tariffa 0722)

   INAIL

   Office work (tariff item 0722) under the 2019 tariffs: average rates of 4 per mille in Terziario, 5 in Industria and Altre attività, 6 in Artigianato (p. 5).

5. 5
   Codice Civile, art. 2120 (Disciplina del trattamento di fine rapporto)

   Normattiva

   Text in force: TFR due on any termination; annual accrual of the year's pay ÷ 13.5; annual revaluation at 1.5% plus 75% of the ISTAT price index; advances of up to 70% after eight years.

6. 6
   D.Lgs. 66/2003 (working time)

   Normattiva

   Normal 40-hour week (art. 3), 48-hour average maximum (art. 4), overtime (art. 5) and annual leave (art. 10).

7. 7
   D.Lgs. 81/2015 (employment contracts and labour supply)

   Normattiva

   Fixed-term contracts (art. 19, text in force from 28 June 2026), labour supply by authorised agencies (art. 30) and irregular supply (art. 38).

8. 8
   D.Lgs. 23/2015 (Jobs Act: contratto a tutele crescenti)

   Normattiva

   Unfair dismissal remedies for employees hired since 7 March 2015: art. 3 (6–36 months' compensation; reinstatement where the fact doesn't exist), as amended by Constitutional Court rulings 194/2018 and 128/2024; art. 9 (small employers: amounts halved; six-month cap removed by ruling 118/2025).

9. 9
   D.Lgs. 151/2001 (maternity and paternity)

   Normattiva

   Compulsory maternity leave (art. 16) and its 80% allowance (art. 22); compulsory paternity leave of 10 working days (art. 27-bis) paid at 100% (art. 29).

10. 10
    Codice Civile, art. 2463 (Costituzione della S.r.l.)

    Normattiva

    S.r.l. formed by notarial deed; minimum capital €10,000, or from €1 if paid in full in cash, with a reserve of one-fifth of profits until €10,000 is reached.

11. 11
    CCNL Terziario, Distribuzione e Servizi (CNEL code H011)

    CNEL – Archivio dei contratti collettivi

    Consolidated text (Testo Unico 30 March 2015, as deposited with the 2019 renewal): probation (art. 121), 13th and 14th salaries (arts. 220–221), notice (arts. 247–248). These articles were not among those amended by the 22 March 2024 renewal.

12. 12
    Archivio dei contratti collettivi (CNEL)

    CNEL

    National collective agreements: pay, job levels, probation, notice and salary payments.

13. 13
    Imposta sui redditi delle società (IRES): che cos'è

    Agenzia delle Entrate

    IRES at 24%, with a 20% rate for 2025 only under conditions (Law 207/2024, art. 1(436–444)); who pays IRES.

14. 14
    Taxes on corporate income (IRES and IRAP)

    Agenzia delle Entrate

    IRAP standard rate 3.9%; 4.65% for banks and financial institutions, 5.90% for insurers; regions may vary rates by up to 0.92 points.

An Employer of Record is the quickest way to hire in Italy without forming a company. Plan for an all-in cost of roughly 1.45–1.5× gross salary, including INPS contributions, the TFR, INAIL and the EOR fee.

Italy's rules on labour supply make provider structure an important question, so get a clear written answer on how each provider employs in Italy. Also confirm the collective agreement and job level, and how the TFR and dismissal costs are handled.

For long-term teams of four to six or more, compare the numbers against setting up an S.r.l. using our EOR vs local entity guide.