Our guide to Payroll in Italy

Doing Business in Italy

Investing in Italy

There are a wide range of investment opportunities available in Italy, with incentives provided at European, National and Regional levels.  In most cases, foreign and local investors are treated equally and are both eligible for investment incentives.

The European Regional Development Fund (ERDF) provides monetary assistance to safeguard sustainable jobs and the European Social Fund (ESF) provides monetary assistance to encourage enterprise and job creation.

Central and Regional Government incentives include: 

• Contratto di Programma which provides investors with large scale industry incentives.

• Localisation agreements which provide Foreign Investors with Financial, Administrative and Procedural support.

• The Nation Programme for Research and Competitiveness which aims to support investors interested in research, innovation and business development.

• Grants and Subsidised loans for SMEs (Sistema Monetario Europeo).

Basic Facts about Italy

General Information:

Population: 60.36 million (Eurostat, 2019)

Capital: Rome based in Lazio

GDP: 2.084 trillion USD (World Bank, 2018)

Main Industries: Agriculture, Manufacturing, Services

Main Language: Italian

Monetary Unit: Euro

Internet Domain: .it

International Dialling Code: +39

How to say:

Hello: Ciao

Good morning: Buongiorno

Good afternoon: Buon Pomeriggio

Good evening: Buona sera!

Nice to meet you: Piacere di conoscerla

Do you speak English? Parla inglese?

Good bye: Arrivederci

Thank you: Grazie

You’re welcome: Prego

See you soon! A presto!

Dates & Numbers

Dates are usually written in the day, month and year sequence. For example, 1st July 2015 or 01/07/15.

Numbers are written with a period to denote thousands and a comma to denote fractions. For example, €1.234, 56 (one thousand, two hundred and thirty-four euros and fifty-six cents). The euro symbol appears before the numbers.

Registrations and Establishing an Entity

To process payroll in Italy, a foreign company needs to be registered with the following Italian authorities, before hiring employees and starting any activity:

• INPS (Social Security);

• INAIL (Labour Insurance);

• Sistema Regionale COB (Labour Office).

These obligations are due with a permanent establishment or a simple social security representative office.

In the event of a permanent establishment (PE), there will be additional potential tax implications for the company (corporate taxation) and the employees (the company will be obliged to perform the role of the tax-withholding agent). If the company has a stable presence in Italy the nature of the activity conducted as well as the level of autonomy and responsibility of the people involved in the activity may trigger some tax implications for the company.

A preliminary tax analysis is suggested to confirm if there is an Italian Permanent Establishment (PE) in Italy in order to set the right structure for carrying out the business in Italy. In fact, if from the analysis it arises that your Company is not putting in place any PE, a suitable solution could be the domiciliation of a Social Security Representative (SSR) in Italy in order to comply relevant domestic duties via domestic payroll. The Legal Representative of the mother Company, as well as the company needs to be fiscally domiciled in Italy in order to receive a Company Identification Number (so called “codice fiscale”).

The company will need to decide if they wish to set-up a PE or a legal entity and this may be based on the type of involvement and cost structure required Italy. This can be a branch (with an Italian VAT code) or a limited liability company (SRL or SPA).

The main types of entity in Italy are:

Partnerships (società di persone):

Assets and Liabilities are only partially segregated from the assets and liabilities of their members. There are 3 types of partnerships available; Simple Partnership (Società Semplice), General Partnership (Società in Nome Collettivo), or Limited Partnership (Società In Accomandita Semplice).

Companies (società di capitali):

Assets and liabilities are completely segregated. There are 3 types of companies: Stock Companies (società per azioni or SpA); limited liability companies (società a responsabilità limitata or Srl) and partnerships limited by shares (società in accomandita per azioni).

A company must be registered to:

The Tax Agency (Agenzia delle Entrate):/h4>

An Italian company tax code is needed; the legal representative of the Italian entity should also have a tax code. Registration could take up to 2 weeks.

The Social Security Body (Istituto Nazionale Previdenza Sociale):

Require the same data for registration as the Tax Agency, plus core business information. This should be completed by the 16th day of the following month in which the first employee has been hired in order to pay the social security contribution.

Insurance Against Accidents at Work (mandatory) (Istituto Nazionale per l'Assicurazione contro gli Infortuni sul Lavoro):

The same data as above is required, as well as the line of work (to define risks). This should be completed within the first working day of the first employee.

The Employment Agency (Centro per l’impiego):

Requires new starters and leavers information. This should be completed the day before the first working day the first employee is hired.

Banking

It is mandatory to make the F24 form payments (which cover social contribution, insurance contribution and taxes) to the authorities from an in-country bank account. All other payments can be made from anywhere.

Banks are usually open to the public Monday to Friday from 8:30am to 13:00 pm, and for 1 hour in the afternoon, between 3:00pm to 4.00pm. On working days before a public holiday, banks are open only from 8:30am to 13:00 pm.

The RiBa (Ricevuta Bancaria) is a commonly used Italian electronic bank draft. It includes a bank receipt which is issued by the creditor on the basis of an invoice and submitted to the debtor for approval. All RiBas are processed electronically and the use of cheques is in decline but they remain an important means of business payment.

Since 1 January 2008, the Italian Banking System has stipulated that the IBAN (International Bank Account Number) is the sole and exclusive standard for identification of the current account to be used in the execution of payments national payments.

The IBAN is the international code used to uniquely identify a bank account.

It is composed of the following elements: Country + EUR CIN + ABI code + CAB code + current account number.

Here's an example:

Working Week

The working week in Italy is usually Monday to Friday and weekly working hours are normally stated by the NCLA. Obviously, this depends from job to job, but it is always regulated by the relevant collective labour agreement.

Employment Law

Holiday Accrual / Calculations

The length of an employee’s annual leave entitlement is determined by the contractual agreement or may be defined by the National Collective Agreement applied. Leave entitlement ranges from 5 to 6 weeks per annum and the law defines that the minimum must be 4 weeks. Usually untaken leave cannot be exchanged for payments in lieu unless the employee’s employment ends. Any remaining leave can be carried forward to the following year until 18 months after the end of the year and these remaining leave balances cannot be taken from the employee. However, the “18 months” rule might vary depending on the relevant NCLA.

Employees are entitled to be paid at the normal rate during their leave.

Payments in lieu of untaken leave can only be made at the termination of employment.

Important: If employees carry any annual leave allowance over, they will be subject to the social security charge in accordance with Italian legislation in July for the accrued days which have been held for more than 18 months.

Maternity Leave (Art. 16 e ss. D.Lgs. 151/2001)

All Pregnant Employees possess the right to abstain from working. This leave is paid at 80 % of the last salary by the Social Contribution Body. National Collective Agreements defines an integration allowance to cover 100% of the salary.

Maternity Leave Policy

The maternity leave period covers:

• the two months before the expected date of confinement;
• the period between the expected date of confinement and the actual date;
• the three months following the confinement.

An arrangement known as “flexible maternity leave” has recently been introduced: this allows the worker to put off her maternity leave until one month before the expected date of confinement and then continue it up to four months after the birth of her child.

• A further period of 6 months may be granted either to the mother or to the father
• By certifying the lack of risks to the child the employee can work up to the 8th month of pregnancy and start the maternity leave up to 4 months after the childbirth
• During the first 12 months following the birth of the child, the Employer must allow the Employee 2 rest periods of one hour each working day if the working day is, at least, equal to 6 hours (otherwise, one hour is allowed). The remuneration of these rest periods is doubled in the case of a multiple birth and can be granted, as an alternative, to the father.
• The payment of the rest periods is advanced by the employer and adjusted when the social charges to INPS are paid.

Both parents are entitled to unpaid leave for a period of sickness of the child with the policy being as follows:

• The parent can stay off work during the whole period of sickness if the Child is under 3 years.
• From 1 January 2026, for children aged 3 to 14 each parent may take up to 10 working days per year (in alternation).

Paternity Leave (Art. 27 bis e ss. D.Lgs. n. 151/2001)

The father employee from two months before the presumed date of birth and within five months thereafter abstains from work for a period of 10 working days, not divisible into hours, to be used also not continuously. The leave is also available within the same time frame in the case of perinatal death of the child. In the case of multiple births, the duration is increased to 20 working days, this leave is also available to the father during the employee mother's maternity leave. The leave also applies to the adoptive or foster father. The leave is also granted to a father taking paternity leave. In order to exercise his right, the father notifies his employer in writing of the days on which he intends to take leave, no less than 5 days in advance, where possible in relation to the birth event on the basis of the expected date of birth.

Following Constitutional Court judgment no. 115/2025, the 10-day mandatory paternity leave also applies to the “intended mother” in a same-sex female couple who is registered as a parent in the civil status records.

Parental leave (Art. 32 D.Lgs. n. 151/2001)

For each child, employed parents may use parental leave up to the child’s 14th birthday (subject to the applicable rules and eligibility conditions).

Where the father employee exercises his right to take leave from work for a continuous or fractioned period of not less than three months, the total limit of parental leave for parents is raised to eleven months.

Within the aforementioned limit, the right to abstain from work shall accrue

• to the mother employee, after the period of maternity leave, for a continuous or fractionated period not exceeding six months;
• to the father, after the birth of the child, for a continuous or fractionated period not exceeding six months, which may be increased to seven if the father employee takes at least three consecutive months;
• for a continuous or fractioned period not exceeding eleven months, if there is only one parent or a parent to whom sole custody of the child has been ordered. In the latter case, the other parent loses entitlement to unused leave.

Leave for disabled child (Art. 33 L.104/1992, Art. 42 L.D. n. 151/2001)

The mother or, alternatively, the employee or father, including adoptive parents, of a person with an ascertained severity handicap, may take advantage of the following benefits:

• extension of the period of parental leaves up to three years;
• as an alternative to the previous point, two hours of paid daily leave up to the child's third birthday.

Disability care leave (Art. 7 Legislative Decree No 119/2011)

Civilian invalids with a reduction in working capacity of more than 50 per cent are entitled to 30 days paid annual leave, even in instalments, for treatment.

The 30 days of absence from work for treatment must be used within the calendar year from 1 January to 31 December.

Extraordinary leave (Art. 42 Legislative Decree No. 151/2001)

Extraordinary leave has a maximum total duration of two years over the applicant's entire working life for each disabled person. The leave may be taken continuously or in instalments within 30 days of the request.

Who is entitled to extraordinary leave:

• Cohabiting spouse/ the cohabiting party to the civil partnership/ the de facto cohabitee of the severely disabled person;
• Father or mother, including adoptive parents, if spouse/cohabiting civil partner/de facto cohabitee of severely disabled person is missing or deceased or suffers from a disabling condition;
• One of the severely disabled person's cohabiting children, if the spouse/domestic partner/cohabiting partner and both parents, including adoptive parents, of the severely disabled person are absent or deceased or suffer from a disabling condition
• One of the disabled person's cohabiting brothers or sisters, if the disabled person's cohabiting children the disabled person's cohabiting spouse/cohabiting civil partner/cohabiting de facto partner, both parents, and the disabled person's cohabiting children are missing, deceased, or suffer from disabling conditions
• One of the relatives or relatives-in-law within the 3rd degree of cohabitation of the severely disabled person, if the cohabiting spouse/cohabiting civil partner/cohabiting de facto partner, both parents, including adoptive parents, cohabiting children, and cohabiting brothers or sisters are missing, deceased, or suffer from a disabling condition.

Leave for women victims of gender-based violence (Art. 24, para. 1, Legislative Decree No. 80/2015)

Employees included in protection pathways related to gender-based violence, duly certified by the social services of the municipality of residence, anti-violence centres or shelters have the right to abstain from work for reasons related to protection pathways for a maximum period of 3 months.

Marital leave (Interconfederal Collective Agreement 31/05/1941)

The employee is entitled, on the occasion of a civil marriage, to fifteen days' paid leave.

Sickness

With the exceptions of certain circumstances, the employee must inform the employer of any illness. The failure to do so in the event of absence will lead to disciplinary measures (penalty, lay-off from work and salary).

The employer is entitled to control the illness by requesting the local Health Institutes for a medical evaluation report. The employee is obliged to remain home between 10:00am -12:00pm and 5:00pm - 7:00pm for the Medical Inspections as requested by the employer.

If the employee is not in their probationary period, the employer will not re-fill the job for a maximum period of 180 days (according to the NCLA “Conf-commercio”)

An employee can request for an extension of sick leave for a maximum period of 120 days; this will remain an unpaid period.

If the Employee does not return to work after the authorised periods, they may be dismissed.

During their sickness, the employee is entitled to be paid as follows (the example below refers to Trade NCA, other NCAs may establishes different rules):

• First three days called "carenza": 100% of salary to be paid by the employer; NCA can state a different percentage over a certain number of sickness periods (for example the NCLA “Conf-commercio” states that for the first two periods of sickness, the employee is due 100% of the salary, for the third one 66.66% of the salary, for the fourth period 50% of the salary. By the fifth sickness event, nothing is due to the employee by the employer for the period named carenza)
• From the 4th to the 20th day:

• 25% of their salary to be paid by the employer (according to the NCLA “Conf-commercio”)
• 50% to be paid by INPS (Social Security). This amount will be advanced by the employer who will then adjust it when paying the social charges to INPS in the same month

• From the 21st to the 180th day:

• 33,33% of their salary will be paid by the employer according to the NCA “commercio”
• 66,66% to be paid by INPS, with the same formalities and adjustments as indicated above.

National Service

In 2004, the Italian Parliament approved the suspension of the mandatory military with effect starting from 1 January 2005.

The leave listed above and sickness could be regulated by the various collective bargaining agreements in the sector, which could make changes (always respecting current legislation and not making things worse) or take over what is set out in the law.

Tax & Social Security

All companies must have:

• A tax codes
• An employment agency access code
• An INAIL code
• An INPS code

The Tax Year usually runs from 1st January to 31st December. Companies may however choose a different fiscal year.

In Italy, taxable income is subject to Personal Income Tax (IRPEF). Furthermore, a Regional Tax and a Municipal Tax are applicable, which vary according to the Regional and Municipal authorities.

Further information is available on the Government Websites:

• INPS - Social Security Authority
• INAIL - Social Security Authority
• Italy Tax Department

Income Tax

The Company Identification Number (“codice fiscale”) is required for any operation involving local authorities.

For companies without an In-Country presence: The in-country payroll office may obtain the company tax code number on behalf of the company by obtaining Italian Personal Fiscal Code and the company code. It normally takes 15 business days to process and the legal representative will be required to sign the necessary documents.

Any delays in the process will affect the implementation for a new employee as no employees can commence employment before this process is successfully completed.

A tax advisor is required to support the clients in setting up an Italian Branch, a Capital Company or a Subsidiary. They must obtain a VAT and Fiscal Code by requesting it from the local VAT Office.

Income Tax withheld to the employee must be paid to the Tax Office (Agenzia Entrate) before the 16th of the following month.

The Italian Tax Card

The Budget Law 2022 (Law No. 234/21) changed the IRPEF tax rates.

Currently, the current taxes rates are:

All the employees pay Regional and Municipal Tax according to their effective residence. An additional 10% for specific cases in the Financial Sectors on Bonuses and Stock Options.

MOD.F24 is the payment order form used by the employer to pay local authorities and is used for:

• Employer and Employee Contributions;
• Work Related Accident Insurance Payments;
• Withheld Taxes for Employees and Company/Employer liabilities for local taxes and other charges.

The MOD F24 form must be completed, signed for approval and paid within the 16th of each month. The amounts will then be debited from the account. For local authority payments, wire transfers cannot be made from abroad but must be done from an Italian bank account.

For omitted, late or insufficient payment beyond the deadline for submission of the declaration for the year following the year in which the violation was committed, or, if there is no declaration beyond 2 years from the omission or error 5.00% (1/6 of 30%) (Art. 13, c. 1, Legislative Decree 472/97). After ascertainment of the violation with a dispute report (2) Regularisation of errors and omissions, including those affecting the determination or payment of the tax, after ascertainment of the violation with a dispute report 1/5 of the minimum penalty (Art. 13, c. 1, Legislative Decree 472/97):

• Occurs, for example, when the employer delays the payment of IRPEF withholdings that he has regularly made on wages paid to employees.
• Only for taxes administered by the Internal Revenue Service.

The employer must submit their Annual Declaration by submitting:

• CU form to the tax agency;
• 770 forms to the tax agency.

Social Security

The Social Security body is named INPS (Istituto Nazionale Previdenza Sociale). A company must register with the Labor Office, the Social Security Institute and the Insurance Institute, all of which are public authorities. The core business of the company will define the “class of activity” to determine the contribution rate.

The Legal Representative of the company is required to sign the relevant documents which are then delivered to the relevant Institutions by the In-Country Payroll at the agreed schedule.

The pre-agreed schedule dates for the process:

Insurance Institute (INAIL):

Registration must be completed no later than the first day of employment.

Social Security Institute Registration:

By the 16th of the month after commencing the employment.

Labor Office Registration:

Must be completed at least 1 day prior to the start date of employment.

Penalties:

In the cases of delay, fines and interest are due to the respective authorities.

Here an example of social security contributions (INPS) (Terziario Confcommercio sector) up to 15 employees for open-ended contracts.

Social Security Contributions (INPS) for blue and white-collar workers (commerce sector)

Social Security Contributions (INPS) for Dirigente (commerce sector)

Only blue and white-collar workers have to pay the FIS in the Confcommercio sector. Always refer to your payroll specialist for more information.

All the employees registered to Social Security from the year 1996 onwards are limited to the maximum salary of €122.295 for the year 2026. Each year this ceiling may vary according to government decisions. Any further eligible salaries are subject to the minor contributions (employer charge only) depending on their sector of activity.

The MOD.F24 payment order form must include details of all Social Security deduction and payments to the Local Authorities.

Insurance policies:

It is common to grant heath care policies; collective agreements provide mandatory policies for managers or officers and employees. When policies are put in place by an employer it must add an additional social security contribution equal to 10% on the policy itself.

Social Contribution:

Delayed payment cannot be remedied directly by the employer as sanction and interest will be required by the body.

Social contributions also cover the statutory pension contribution. To obtain information regarding an employee's retirement age and how many years of social contributions he or she has paid, one should always refer to social security consultants (CAAFs and patronages), always with the employee's authorization to do so.

INAIL is in charge of company enrolments and providing indemnity to employees that have had accidents during their employment or, companies must inform INAIL about their core business and the main activities of employees to assess the risk, this is to establish the insurance amount to pay for each kind of risk. This may be reviewed based on the accidents.

Reporting

Yearly

CU Form

The Certificazione Unica (CU) is the tax document with which tax withholding agents certify employment and assimilated income, but also self-employment income, commissions and miscellaneous income.

Annual Certificates of Salaries for Tax & Social Security (for previous year) should be submitted by 31 March each year to all the employees by the payroll provider and submitted to the agency by 16 March.

Autoliquidazione INAIL

The employer subject to compulsory insurance against accidents at work and occupational diseases and the craftsman without employees pay the premium each year by means of self-assessment.

This procedure allows for the direct determination and payment of the occupational accident and illness premium as well as the special craftsman premium. The other 'special unit premiums' (pupils/students, X-ray and radioactive substances, millers, fishermen, porters, horse transporters and coachmen) are excluded from self-assessment.

With the annual self-assessment of premiums, Inail also collects membership contributions on behalf of the affiliated trade associations.

Annual report of salaries to INAIL (National Institute for Insurance against Industrial Accidents) must be submitted before 16 January of each year via F24 Form by the payroll provider.

Disabled Persons Annual Report as provided for in Law No. 68 of 12 March 1999 (Denuncia Disabili)

The Disabled Persons Annual Report is required to be submitted by 31 January of each year to the labor office for Employers with 15 Employees or more. The Disabled Persons Annual Report must necessarily be filled in electronically by the deadline indicated each year by the Ministry of Labour, under penalty of the sanctions provided for in Article 15 of Law 68/99.

The administrative penalty shall be EUR 702.43, increased by EUR 34.02 for each additional day of delay in complying with the obligations.

If there are no changes affecting the compulsory quota, the prospectus may not be forwarded.

Always consult your payroll specialist or your trusted labour consultant to submit it to the appropriate bodies.

Annual Withholding Tax Return (770 form)

Form 770 is the declaration to be filled in by tax substitutes, i.e. those entities that take the place of the taxpayer in dealing with the tax authorities, withholding taxes on remuneration, wages or pensions and then paying them to the state.

Annual Withholding Tax Return with client’s signatures is required to be submitted before 31 October each year at the Tax office by the payroll provider.

Temporary employees (Lavoratori somministrati): annual communication

Companies which, during the current year, have used temporary agency workers, must submit, by 31 January of the following year, the obligatory annual communication with the data on temporary agency contracts concluded during the current year.

The communication will have to be made to the company trade union representatives (RSA) or to the unitary trade union representation (RSU) or, failing that, to the territorial trade union bodies of the comparatively most representative trade union associations at national level.

The communication at a glance.

The mandatory data required, and which must be entered in the attached form, are

• The number of employment contracts concluded
• The duration of the contracts
• The number and qualification of employees used.
• The reference period is the current year and the communication must not include the name of the employees, but only the numerical data.

The submission may be made by:

• Hand delivery;
• Registered letter with acknowledgement of receipt;
• Certified electronic mail (PEC);
• Ordinarily, it is the temporary employment agencies that are responsible for communicating the data to the company.

Sanction

Please note that a fine of between EUR 250 and EUR 1,250 is provided for in the event of failure to comply or incorrect compliance with the reporting obligation.

Payroll

It is legally acceptable in Italy to provide employees with online payslips.

Reports

By law, payroll reports must be kept for 5 years.

Payslip Example

Below is an example payslip for local employee:

New Employees

To set up a new employee the following is required:

• A completed New Employee contract – written working contract signed by the employer and the employee. During the year 2022, the so-called Transparency Decree was adopted in Italy. The Transparency Decree came into force on 13 August 2022 and applies with regard to 'all employment relationships already established as of 1 August 2022'. With specific reference to employment relationships already established as of 1 August 2022, the regulation provides for the possibility for employees to request in writing from the employer (and the principal) an integration of the required information, a request that must be responded to within the next sixty days, under penalty of sanctions. The Transparency Decree point will explain the new regulations in detail.
• On the day before the start date, it is mandatory to send a communication (called COB) to the Labour Office before the start date. In order to do it, the employer must be enrolled with Centro per l’Impiego.
• The employee is required to produce a complete list of personal data, including Address, Place of Birth, Fiscal Code, Family Status (Wife\Husband Occupational Status, Age of Children), Date of Employment, and Former Employment Income from the same Year.
• Appropriate forms (TFR – Tax Deduction Form, SS CAP form and Privacy form) are given to the employee to collect information.

Failure by the labor office to comply will result in a penalty for each employee. Each labor office by province has its own website where this form must be submitted, which is forwarded to INAIL and INPS by the labor office.

Collective agreements provide for probationary periods, when a new employee is hired, ranging from a few days to several calendar months, during which either party may terminate the employment relationship without notice. These periods are defined according to the levels agreed upon within the collective bargaining agreements.

In case the employee is not an Italian national but is hired/assigned in Italy.

The documentation required of new expatriate employees includes the same data as above just outlined (date and place of birth, address in Italy, Italian tax code). Also required are an employment contract and an Italian tax code and, depending on the expatriate's origin, a residence permit.

For a new expatriate employee, the following information must also be provided:

• Salary and contract information
• Letter of posting
• Residence permit for all non-EU citizens
• Form A1 in Europe (if applicable)

The deadline for registering new expatriate employees with the authorities is one day prior to the start date of employment.

Note that for expatriates working in Italy, a new requirement has been introduced in addition to reporting to the labor office via the Cliclavoro online website.

Most commonly used forms of contract in Italy

In Italy, there are several forms of contract including the most commonly used ones:

Open-ended employment contract:

This is the open-ended contract that offers greater job stability, and provides a full- or part-time employment relationship without a specific expiration date.

Fixed-term employment contract:

This is an employment contract that provides for the duration of the employment relationship between the parties. The overall maximum duration between the same parties is 24 months (including renewals and extensions). Beyond 12 months, renewals/extensions require statutory or collectively agreed reasons; a further “assisted” contract up to 12 additional months is possible before the Territorial Labour Inspectorate (ITL). Maximum four extensions apply across the 24 months.

Apprenticeship contract:

This is a employment contract intended for young people between the ages of 15 and 29, aimed at training and acquiring professional skills. The duration and the specifics depend of the various CCNL.

Coordinated and continuous collaboration contract:

This is an employment contract for an indefinite or fixed term that provides for coordinated and continuous work between the parties.

Temporary employment contract:

This is a fixed-term employment contract involving the provision of personnel to a third party.

Intermittent labor contract:

This is a fixed-term/open-ended labor contract that provides for the performance of labor services on an intermittent basis, according to the needs of the company.

Always consult with your payroll specialist or labor consultant to outline and choose which employment contract is best for the new employee.

Legislative Decree 104/2022 so-called Transparency Decree (Decreto Trasparenza)

The aforementioned Legislative Decree is aimed at transposing Directive (EU) 2019/1152 on transparent and predictable working conditions in the European Union.

This directive, by replacing and repealing Directive 91/533/EEC, transposed into national law by Legislative Decree No. 152 of 1997, updates the obligations to inform employees about their working conditions and establishes minimum protections for all types of employees, providing them with greater predictability and clarity regarding the transparency of information on their working relationship and conditions.

This right to information (public and private employer) on the essential elements applies:

• To the employment contract;
• Temporary employment contracts;
• Intermittent employment contracts;
• To co.co.s (Art. 2 c. 1 Legislative Decree no. 81/15);
• To co.co.co. (Art. 409, c. 1 n. 3 c.p.c.);
• To Presto (Art. 54-bis DL n. 50/2017);
• To maritime and fishing employees;
• To domestic workers (with some exceptions).

The compulsory elements to be communicated include:

• Identity of the employer and of any co-employers;
• Identity of the user undertaking (in the case of staff leasing);
• Place of business or domicile of the employer;
• Place of work (or always different places or freely determinable);
• Classification of the employee (category, level and qualification) or, alternatively, the characteristics or summary description of the job;
• Date of commencement of the employment relationship;
• Contractual type of the employment relationship;
• End date of the employment relationship; condition or duration (fixed-term relationships);
• Duration of the probationary period;
• CCNL applied to the employment relationship (indicating the parties who signed it);
• Any second-level collective agreement (with an indication of the parties that have signed it).
• Initial amount of the remuneration, or compensation, and its constituent elements;
• Indication of the period and method of payment;
• Remuneration for overtime work;
• Scheduling of ordinary working hours, conditions for overtime and procedures for possible shift changes.

In the case of unpredictability of work scheduling:

• Guaranteed minimum paid hours;
• Remuneration for hours worked in addition to the guaranteed hours;
• Hours/days on which the employee is required to work;
• Advance notice for requesting work performance;
• Time limit within which the employer may cancel such a request (if allowed).

Other essential elements:

• Duration of holidays;
• Duration of paid leave (or how it is determined if not definable);
• Right to receive training (if provided for);
• Social security and insurance institutions receiving contributions and premiums (in whatever form);
• Duration of notice and relevant procedure, possibly separate for resignation and dismissal (where applicable).

For some elements, the relevant detailed rules may be communicated by referring to the collective agreement applied or to other company documents if they are simultaneously delivered to the employee or made available in accordance with company practice.

The employee must be informed of these elements:

• By delivery of the individual employment contract or the copy of the communication of the establishment of the relationship, before the commencement of work;
• Within 7 days of the commencement of work, these documents may be supplemented with any missing information;
• Within 1 month after the commencement of work, the above-mentioned documents may be supplemented with information following the 7-day period (such as, in the case of staff leasing, the identity of the user undertakings, the right to training, the duration of holiday leave and other paid leave, the procedure and deadlines for giving notice, the details of the CCNL - stipulating parties, etc., the bodies and institutions receiving social security and insurance contributions;
• In the event of termination within 1 month from the date of establishment, a statement with all the information, if not already provided previously, must be given to the employee at the latest at the time of termination;
• In the event of a change in any of the compulsory information during the course of the relationship: notification in writing no later than the first day on which the change takes effect, if it does not result from a change in statutory or regulatory provisions, or clauses in the collective agreement.

The manner in which the information is communicated must be made:

• By clear, complete communication, also with reference to accessibility for disabled employees;
• In written form
• In paper or electronic format;
• With proof of transmission or receipt;
• With storage and accessibility at the employee's request.

The same information must be retained and made accessible to the employee and the employer must retain proof of transmission or receipt for a period of five years from the end of the employment relationship. In addition, the employee must be informed, at least 24 hours in advance, in writing, of any change affecting the information provided and entailing changes in the conditions of employment.

The Ministry also specifies that the obligation to inform exists in the following hypotheses:

• Recruitment or assignment through the use of chatbots during the interview, automated profiling of candidates, screening of CVs, use of emotional recognition software and psycho-aptitude tests, etc;
• Management or termination of employment with automated assignment or revocation of tasks, duties or shifts, definition of working hours, productivity analysis, determination of remuneration, promotions, etc., through statistical analysis, data analytics or machine learning tools, neural networks, deep-learning, etc.

With regard to indications affecting the monitoring, assessment, performance and fulfilment of workers' contractual obligations, according to the Ministry, the employer is obliged to inform the employee of the use of such automated systems, such as - purely by way of example: tablets, digital devices and wearables, gps and geolocalisers, facial recognition systems, rating and ranking systems.

Sending employees abroad:

Legislative Decree. 104/2022 also updated the communications that the employer is required to provide to the employee who is sent abroad.

In fact, the employee must be informed in writing, and before departure, of any change in the elements of the relationship.

In particular, he must be informed of

• The country or countries in which the work abroad is to be performed and the expected duration;
• The currency in which remuneration will be paid;
• Any additional benefits in cash or in kind inherent in the tasks performed;
• If repatriation is envisaged, the conditions governing it;
• The remuneration to which the employee is entitled under the applicable law of the host Member State;
• Any specific allowances for the secondment and the arrangements for reimbursing travel, board and lodging expenses;
• The address of the institutional website of the host Member State where the information on the posting is published.

All of the above and in order to comply with the provisions of the Transparency Decree, it is necessary to prepare the information notice to be delivered to employees containing all the necessary information.

Please always refer to your trusted payroll or dedicated labour consultant when you want to hire a new employee.

Smart Working

Agile working or smart working is not a distinct type of employment relationship, but, rather, a particular mode of performance of employment introduced in order to increase competitiveness and facilitate the reconciliation of work and life times.

The reference discipline is Law No. 81 of 22 May 2017 (Articles 18-24), as amended by Article 41 bis of Decree-Law No. 73 of 21 June 2022, so-called Simplification Decree, converted with amendments into Law No. 122 of 4 August 2022. 122, according to which agile work is a mode of execution of the employment relationship established by agreement between the parties, also with forms of organization by phases, cycles and objectives and without precise time or place of work constraints, with the possible use of technological tools for the performance of the work activity.

The work is performed partly inside the company premises and partly outside, without a fixed workstation, within the limits of maximum daily and weekly working time deriving from the law and collective bargaining (Article 18, paragraph 1). The employer is responsible for the safety and proper functioning of the technological tools assigned to the employee for carrying out the work activity (Art. 18, paragraph 2). Smart working employees are also entitled to the protection provided in the event of accidents and occupational diseases in relation to services rendered outside company premises and on the journey between home and the place chosen to carry out their activity (see, in this regard, INAIL Circular No. 48/2017).

As regards the agreement on agile working arrangements, Article 19 provides that it must be drawn up in writing, for the purposes of administrative regularity and proof, and that it must regulate the performance of the work carried out outside the company premises, also with regard to the forms of exercise of the employer's management power and the tools used by the employee.

The agreement must also regulate the exercise of the employer's power of control over the service rendered by the employee outside the company premises and identify the conduct - related to the performance of work outside the company premises - that gives rise to the application of disciplinary sanctions (Article 21).

In addition, the agreement must identify the employee's rest time, as well as the technical and organizational measures necessary to ensure the employee's disconnection from technological work equipment.

The agreement may be for a fixed term or for an indefinite period and, in the latter case, termination may take place with a notice period of not less than 30 days. However, in the case of disabled workers (art. 1 of Law no. 68/1999, as subsequently amended), the term of notice of termination by the employer may not be less than 90 days, in order to allow adequate reorganization of work paths with respect to the life and care needs of the employee. In any case, if there is a justified reason, either party may terminate before the expiry of the term in the case of a fixed-term agreement, or without notice in the case of an agreement of indefinite duration.

With Ministerial Decree No. 149 of 22 August 2022 and its Annexes, the methods for fulfilling the communication obligations provided for by Article 23, paragraph 1, of Law No. 81/2017 (as amended by Article 41 bis of Law Decree No. 73/2022, converted with amendments into Law No. 122 of 4 August 2022) and, therefore, for telematically sending the information relating to agile work have been defined. According to the new regulations, it is no longer necessary to attach the individual smart working agreement signed between employer and employee (which must, in any case, be kept by the employer for the purposes of proof and administrative regularity for 5 years from the signing), but the employer must transmit the information to the Ministry in the manner identified in the Decree itself and in the Annexes which form an integral part of it.

The telematic communication must be made through the application available, through SPID and CIE authentication, on the Servizi Lavoro portal, or, alternatively, through the API REST telematic services for sending communications. For further information, always refer to your payroll specialist or dedicated labour consultant for smartworking contracts.

Leavers

Since March 2016, voluntary redundancy and consensual resolutions have been made by electronic submission. Appropriate forms will be made available on the website of the Ministry of Labour and then automatically sent to the competent territorial directorate of the Labour Authority and the employer. In addition, the online communication of termination to the Labour Office must also be completed within 5 days from the termination.

Previously the employer had to receive the resignation and provide the online communication of termination to the Labour Office within 5 days from the termination.

The procedure and the form of termination of employment by the employee is provided for by the Ministerial Decree of 15 December 2015 in implementation of the provisions of Article 26 of Legislative Decree No. 151/2015, which requires the validation of the resignation by directly accessing the website of the Ministry of Labour and Social Policies at www.cliclavoro.gov.it or through qualified intermediaries.

For regulations on the terms of notice, procedures and duration in the event of withdrawal by the employee or the employer, please refer to the CCNL in force at the time of withdrawal.

The Employees have 7 days from the day of request to withdrawn the notice given.

Employee Benefits

General expenses incurred by an employee associated with their employment are fully reimbursed upon submission of the receipt. All the original receipts should be submitted with the relevant Expense Claim Form completed in full.

Meal vouchers are exempt from tax and social contributions up to €4/day for paper vouchers and, from 1 January 2026, up to €10/day for electronic/digital vouchers. Any amount above these daily thresholds is taxable and contributable for the excess only.

The employer can pay the employee a fixed conventional value for every kilometer traveled by an employee using their own car where their job function required them to use their own car. The kilometer reimbursement has a conventional value depending on the model of the car. In this conventional value all expenses (such as fuel, insurance or mechanic) are included except motorway and parking charges. The values are published annually by the ACI. For vehicles granted with contracts signed from 1 January 2025 and newly registered and delivered from that date, the taxable benefit equals:

• 50% of the annual 15,000-km ACI cost for traditional vehicles,

• 20% for plug-in hybrids,

• 10% for battery electric vehicles.

A transitional regime applies to specific 2024 orders and to vehicles assigned between 1 July 2020 and 31 December 2024, which keep the former CO₂-based percentages until contract expiry.

A company car is a benefit since the employee benefits from the personal use of it, estimated as being 30% of the total use. This personal use has a conventional monthly value depending on the model of the car with the employee paying taxes and social security contributions on this value. The car must be owned or rented by the employer and if rented the invoice from the rental company must be addressed to the employer.

In addition, the employee could be entitled to travel expense reimbursement; these expenses must be strictly in connection with his job function (fuel, motorway and parking). The employee must provide the employer with the correct receipts.

For the 2025–2027 period, fringe benefits are tax‑ and contribution‑exempt up to €1,000 per employee, or up to €2,000 where the employee has dependent children. If the threshold is exceeded, the entire yearly amount becomes taxable and contributable. Always refer to your payroll specialist or dedicated labour advisor in case of changes.

Visas & Work Permits

To work in Italy individual requirements are defined subject to citizenship. An individual is either an EU Citizen or a Non-EU citizen for classification purposes.

EU Citizens

Residence: EU citizens may reside in Italy for less than 90 days. Beyond 90 days, they are required to register with the local town hall.

Employment: EU citizens are free to work in Italy with no permit being required.

Non-EU Citizens

Business Visits: Non-EU citizens will be required to obtain a business/tourist visa. The application should be made prior to travelling to Italy. Applicants should make their request for a visa to the Italian Embassy in their country of origin or current residence. A visa may not be required by citizens of countries that have specific arrangements with Italy, including America and Japan for example.

Employment: A foreign national must hold a Work Visa to work in Italy. The number of foreign nationals that can work in Italy is decided by the Government on an annual basis. There is an exception that can allow additional foreign nationals to be issued with a permit out-with the Government limit if a relationship exists between the Italy entity and a foreign holding or subsidiary company or in other rare cases.

Banking

• Mandatory to make F24 form payments from an in-country bank account.
  

• Banks open Mon–Fri, 8:30–13:00, and one hour in the afternoon.
  

• RiBa (Ricevuta Bancaria) is a common electronic bank draft.
  

• IBAN is required since 2008.

Further Information 

For more information, or assistance with Italy tax enquiries please contact: gi@activpayroll.com

About This Payroll and Tax Overview 

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.