Cost to Hire an Employee in Italy (2026)

• Gross salary, paid in 14 instalments a year.
• Employer costs of about 34.6% at a €40,000 salary: €13,859 a year, of which the largest is pension (IVS).
• An EOR fee, if you hire without your own entity. The providers in our Italy guide publish starting prices of US$399–699 per employee per month.

Mandatory employer costs at a €40,000 salary (mid-level professional). Employee contributions and income tax come out of gross pay and aren't included.

Contribution ceilings mean employer costs can be a smaller share of higher salaries. Figures exclude the EOR fee.

• Severance fund (TFR): Annual pay ÷ 13.5 (about 7.4%), accrued every year
• Salary payments per year: Set by the collective agreement; 14 under the commerce and services agreement
• Paid annual leave: At least 4 weeks
• Standard working week: 40 hours (48-hour average maximum including overtime)

• Meal vouchers (buoni pasto, optional benefit) (€1,600 / year): A common benefit, often required by company practice rather than law.
• 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.

Without your own entity in Italy, an Employer of Record can employ your hire for a monthly fee. The alternative is setting up your own Italian S.r.l.. See the comparison in our Italy guide and EOR vs local entity.