4. Types of leave

There is no information about the types of leave for this country.
Learn more about types of leave >

Paid time off

Employees will roll over accrued paid leave days through the next year, but they must be used by June 31st. Any PTO that is left over will be cashed out.

Employers have control over whether employees take leave. In addition, the arrangement should specify whether or not holidays should be carried over. The employee should take the following leave:

In the case of a worker order, you must be available for at least two weeks. or in the 18 months after the vesting year's end, the final two weeks. From the moment of hire, the leave matures during the working partnership.

PermessiEx-FestivitĂ  (suppressed holidays) are granted to all employees regardless of seniority or the National Labour Agreement, and they are granted as a result of the abolition of four bank holidays. Employees are offered 32 hours of paid time to compensate for the days they may have been on vacation.

Employees who are in their third year of employment are eligible for Permessi ROL (reduction of working hours), which are 28 hours a year. They begin accruing 56 hours a year after their fifth year of work.

Public holidays

There are 11 national holidays and one regional holiday in Italy.

If a national holiday occurs on a Sunday, it is either rescheduled for the next day or paid in return.

Sick days

The employee is entitled to a 100% salary for the first three days, which is paid by the boss. This is true for the first two diseases of the year; the third disease is covered at 66 percent, while the fourth illness is covered at 50 percent. The person is not covered for the first three days of sickness after that.

Between the fourth to the twenty-first day of the injury, the employee is entitled to 75 percent of his or her wages, with the government covering half and the company covering the other half.

From the 21st day forward, the employee is entitled to 100 percent, with the government covering 66 percent and the company covering the remaining.

Maternity leave

Maternity leave is granted to mothers for a period of five months. Before giving birth, two months must be taken. The employee will be compensated in full. Employers make the charge and will later request an INPS refund of up to 80%.

Paternity leave

The employee is entitled to a 100% salary for the first three days, which is paid by the boss. This is true for the first two diseases of the year; the third disease is covered at 66 percent, while the fourth illness is covered at 50 percent. The person is not covered for the first three days of sickness after that.

Between the fourth to the twenty-first day of the injury, the employee is entitled to 75 percent of his or her wages, with the government covering half and the company covering the other half.

From the 21st day forward, the employee is entitled to 100 percent, with the government covering 66 percent and the company covering the remaining.

Parental leave

In Italy, an employee can take up to 10 months of unpaid parental leave.

Other leave

Paid permits, also known as "Permessi Retribuiti" are a special kind of paid leave that can only be used for particular purposes specified in each CCNL, the most important of which are:

A family member's death or serious illness;

Harassment by a friend of the family; and

Reasons related to family.

5. Employment termination

There is no information about employment information for this country.

Termination process

Employee firing is now prohibited under COVID-19 until June 30, 2021.

In Italy, the employee must be notified in writing. If a labor court rules that the termination was unjust, the company must either restore the employee or compensate the employee.

Employers are required to offer notice of termination for all forms of terminations, unless the termination is for grave disciplinary reasons. Notice periods may be specified in the collective bargaining agreement, or a payment in lieu of notice may be made. A contract of employment may be terminated in one of the following ways: resignation, employer dismissal (including for "good cause"), expiration of a defined period, mutual consent, or retirement.

Notice period

If the employer initiates the termination, employees shall be given 30 days' notice, and managers will be given 60 days' notice. Employees shall receive 30 days' notice and managers will receive 45 days' notice if the termination is instigated by the employee.

Probation period

Probationary periods may last up to six months for managers and up to two months for employees below the managerial level.

Severance pay

Employers in Italy are required to set aside funds for severance (TFR) for their employees, which must be paid out within six months of the employee's departure. The TFR is calculated by dividing the gross annual salary from January 1st to December 31st by 13.5 and subtracting taxable income (pension, social security) before multiplying by 50 percent. The final TFR amount is increased by an additional percentage determined by the National Statistical Institute.

6. Working hours

There is no information about the working hours for this country.

General working schedule

The standard workweek is 40 hours spread across five days, and employees are not permitted to work more than 48 hours spread across seven days, including overtime, on an average basis over four months. Collective bargaining agreements may slightly alter these rules. Although there is no legal limit to the number of hours an employee can work in a single day, there is a practical one, as employees must take 11 consecutive hours of rest every 24 hours. Workers under the age of sixteen may not work more than seven hours per day, and workers between the ages of sixteen and eighteen may not work more than eight hours per day.

Overtime

The amount of overtime an employee is permitted to work is generally determined by contract or collective bargaining agreement, but overtime cannot exceed 250 hours per year. Collective bargaining agreements establish pay rates for overtime and work on holidays. Night work (work performed between the hours of 12 a.m. and 5 a.m.) is limited to eight hours in a 24-hour period and is typically limited to 80 nights per year. Collective bargaining agreements may modify some of these terms.

7. Minimum wage

There is no information about the working hours for this country.

In Italy, there is no minimum wage at the national or regional level, but a CBA (contract between an employer and employee) can force one. Employees are entitled to a salary that enables them to live comfortably. Even if your company does not comply with the minimum wage law, courts will look to a negotiated minimum wage as being a contractually agreed-upon rule.

While 13th-month and annual bonuses are not required by Italy's compensation laws, these bonuses are prevalent in the majority of CBAs. Many employers will offer employees a bonus before Christmas, and according to CBA regulations, companies that are subject to the law are required to pay employees 14th month salary during the summer months.

8. Employee benefits

There is no information about the working hours for this country.

The National Health Service (SSN) manages national health insurance in Italy, and it is funded through direct taxation as well as indirect taxation by employers and employees. When you register with the Local Health Service, you will be given a social security number and a health card. The employee's health card entitles him or her to low-cost or no-cost treatment.

There is also the option of purchasing private health insurance. Individuals with private insurance can freely choose their own doctor and specialist, be treated at private hospitals, and so on. Many residents have private health insurance policies that cover the portion of medical bills not covered by social security.

Some employers offer allowances for company cars, cell phones, and meal vouchers. Training is frequently provided by high-tech companies.

9. Taxes

There is no information about the working hours for this country.

Corporate tax

Business Income Tax, IRES (Imposta sul reddito delle societĂ ), and Regional Production Tax, IRAP (Imposta regionale sulle attivitĂ  produttive), apply to Italian corporate organizations. Italy has one of the highest corporate taxes in the European Union, with a current rate of 24 percent. The average tax rate in the EU is 21.3 percent.

Corporate income tax (IRES) is levied at a rate of 24%. Charitable foundations, religious organizations, and sports clubs, for example, are free from corporate tax.

The normal rate of regional tax (IRAP) is 3.9 percent; however, regional authorities have the authority to raise or reduce the standard rate of tax by up to 0.92 percent. Furthermore, different IRAP rates are applied on various sectors of the economy in each area. For banks and other financial institutions, for example, the rate is 5.57 percent in Abruzzo, Apulia, Lazio, Lombardy, Piedmont, and Veneto, but just 4.65 percent in Emilia-Romagna. The tax is computed differently than IRES, taking into account the cost of fixed-term employees (before 2016 the cost of every employee was counted). In determining the tax base for corporate income tax (IRES), up to 10% of regional tax (IRAP) is deducted.

Individual income tax

All employees are subject to a progressive income tax known as IRPEF (Imposta sul reddito delle persone fisiche). The government sets the tax rate based on income, but regions may add an extra 0.7 percent to 3.33 percent. In addition to a regional income tax, each area may levy a municipal income tax ranging from 0.1 percent to 0.9 percent. Municipalities may also impose progressive tax rates based on the national income band.

The tax rate is 23% if the taxable individual earns between €0 and €15,000 per year.

The tax rate is set at 27 percent if the taxable individual earns between €15,000 and €28,000 per year.

If the taxable individual earns between €28,000 and €55,000, the tax rate is set at 38%.

If the taxable individual earns between €55,000 and €75,000, the tax rate is set at 41%.

If the taxable individual earns more than €75,000, the tax rate is set at 43%.

VAT, GST and sales tax

Value-added taxation (VAT) (Imposta sul valore aggiunto, abbreviated IVA) is a consumption tax levied at a fixed rate of 22 percent that has not altered in years. The Italian government lowered VAT rates to 10% for certain listed medicines and power supplies, non-exempt passenger transportation, admissions to cultural and entertainment events, hotels, and restaurants, and to 4% for listed food, beverages, and agricultural goods.

The Italian VAT system is a component of the European Union's value-added tax system. Specific market-supplied products, such as education, healthcare, hospitals, and public postal services, are legally exempt from VAT, as are specifically specified financial transactions, such as money transfers and business portion transfers. In the event of a taxable person (a person who has a VAT number), input VAT on purchases of goods and services linked to business activity is usually recoverable. Specific products are subject to further restrictions (e.g. cars, entertainment expenses).

10. VISA and work permits

There is no information about the working hours for this country.

Foreigners wishing to work in Italy must get a work visa, a national visa, or a D-Visa, which enables admission into the country within eight days of arrival. To remain in Italy, however, further authorisation (a residency permit - permesso di soggiorno) is necessary. All visa applications must be made via the corporate province's (Preffetura's) Immigration Office (Sportello Unico d'Immigrazione – SUI) using a Nulla Osta document.

The Italian government has a limited amount of granted work permits and only accepts work permit applications on a limited basis (for a few months every one or two years), depending on the state of the Italian labor market at the time. (Flussi's Decree.)

11. Employer Of Record service terms

There is no information about the working hours for this country.

Employment contracts

In Italy, an employment contract may be either oral or written, and there is no set format to follow, however written contracts are the standard. All fixed-term contracts must be in writing, and any probation period or non-competition restrictions must also be in writing. Furthermore, the employer is obligated to give the employee with a written statement revealing specific facts within 30 days of the commencement of work.

Minimum assignment length

Employment contracts may be indefinite or for a set period of time. Fixed-term contracts may be for no more than 12 months and may be extended for up to 12 months if there is a compelling cause. A fixed-term contract may be renewed four times in a 24-month period.

Payment currency

Euro (EUR)

13.Opening a subsidiary in Italy

There is no information about the working hours for this country.

How to set up a subsidiary

Many aspects must be considered before launching your subsidiary. Italy is an ideal site to start a company since there are no special criteria for foreigners and travel to other European Union (EU) nations is simple. However, you must evaluate the sort of business you want to operate, the location of your headquarters, and if you already have any trade links. All of these elements might have an impact on your subsidiary arrangement.

The location of your subsidiary, in particular, may have a significant influence on how you run your firm. Distinct towns or areas often have different laws or regulations that you will need to be aware of before establishing your subsidiary.

The next step is to choose which sort of company structure is ideal for you. A societá a responsabilitá limitata (S.r.l.) is the most frequent subsidiary form, and it is similar to a private limited liability corporation. Although the decision ultimately relies on how active you want to be in Italy, a S.r.l. provides greater organizational flexibility and shareholder autonomy.

The following are the stages to forming a S.r.l.:

1. Before a public notary, execute a public deed of incorporation and business by-laws.

2. Make the registration tax payment.

3. Purchase business and accounting books.

4. Contribute to the post office current account the government grant tax.

5. Register the business with Comunicazione Unica.

6. Notify the competent Labor Office (DPLMO) whenever you hire new employees.

Subsidiary laws

Subsidiary rules in Italy differ depending on the sort of company you establish. A S.r.l. needs a minimum investment capital of 10,000 euro, with at least 25% paid before registration. There is no minimum number of shareholders required to incorporate, and no Italy subsidiary regulations define where shareholders must reside or what nationality they must possess.

Subsidiaries of S.r.l. benefit from flexible management laws. In the Articles of Association or bylaws, shareholders may specify how the firm will be managed. They have the authority to nominate a managing director or a whole board of directors. When hiring non-EU nationals as directors, you must keep a few things in mind.

Every business must preserve books and records of its finances, including original papers supplied and received. These accounting documentation must be kept for a minimum of 10 years. Audits are not required for all Italian subsidiaries, but your S.r.l. will need one if you fulfill specific criteria for total assets, personnel count, and sales and services income.

13. Why choose Rivermate as your Employer of Record / PEO in Italy

Establishing an entity in

Italy

to hire a team takes time, money, and effort. The labor law in

Italy

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Italy

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Italy

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Italy

via our Employer of Record / PEO solution.

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