In Italy, statutory annual leave cannot be forfeited. Employees must take at least 2 weeks in the year earned, and the remaining statutory leave must be taken within 18 months after year-end.
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Payroll and Benefits Guide Italy
Last updated: Mar 03, 2026
Currency
Euro (EUR)
Employer Taxes
29.40% - 41.00%
Payroll Frequency
Monthly
Employee Costs
10.00%
Capital
Rome
Date Format
dd/mm/yyyy
Fiscal Year
1 January - 31 December
Contribution
| Employer Payroll Contributions | |
|
29.00% – 32.00%
|
Social Security (including pensions, disability and survivors’ benefits, sick leave, maternity, paternity, parental leave) |
|
0.40%- 1.00%
|
Injuries at Work Insurance (INAIL)- varies by Occupation |
| 0.00% | TFR (Severance Pay) |
| 29-32% | Total Employment Cost |
| Employee Payroll Contributions | |
| 9.19% | Social Security |
| 9.19% |
Total Employee Cost
|
| Employee Income Tax | |
|
23.00%
|
Up to 28,000 EUR Annually
|
|
33.00%
|
28,001 – 50,000 EUR Annually
|
|
43.00%
|
Over 50,000.01 EUR Annually
|
| 1.23%-3.33% |
Regional Tax
|
|
0.00%-0.90%
|
Municipal Tax
|
Employer taxes
Highest
Lowest
Employee taxes
Highest
Lowest
Minimum Wage
General
There is no statutory minimum wage in Italy. Minimum wage levels are set by the applicable national collective bargaining agreements (CCNLs), which establish minimum pay by sector, job classification, and seniority. Minimum wage rates therefore vary depending on the applicable CCNL.
MINIMUM WAGE (PER MONTH)
Highest
Lowest
Payroll
Payroll Cycle
The payroll cycle in Italy is typically monthly. Salary payment timing is determined by the employment contract or applicable collective bargaining agreement (CCNL) and must be made regularly and without undue delay.
13th Salary
Italian employment compensation is typically paid on a monthly basis. A 13th salary installment is provided for by most national collective bargaining agreements (CCNLs) and is usually paid in December. Some CCNLs also provide for a 14th monthly installment, generally paid in June.
Working Hours
General
Standard working hours in Italy are 8 hours per day, 40 hours per week.
Overtime
Work performed beyond normal working hours qualifies as overtime and is regulated by the applicable employment contract or collective bargaining agreement (CCNL). Italian law establishes maximum overtime limits, which are further detailed in collective agreements.
Leave
Annual Leave (vacation)
Italian law provides a minimum of four weeks of paid annual leave per year. Applicable collective bargaining agreements (CCNLs) may grant additional leave beyond the statutory minimum.
PTO carryover
Public Holidays
If a public holiday falls on a Sunday, there is no automatic carryover to Monday under Italian law. Depending on the holiday and the applicable collective bargaining agreement (CCNL), employees may be entitled to additional pay in lieu. In addition to national public holidays, regional or local holidays may apply based on the employee’s place of work.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 6 January 2026 | Tuesday | Epiphany | Standard holiday |
| 5 April 2026 | Sunday | Easter Sunday | Standard holiday |
| 6 April 2026 | Monday | Easter Monday | Standard holiday |
| 25 April 2026 | Saturday | Liberation Day | Standard holiday |
| 1 May 2026 | Friday | Labour Day (May Day) | Standard holiday |
| 2 June 2026 | Tuesday | Republic Day | Standard holiday |
| 15 August 2026 | Saturday | Assumption of Mary | Standard holiday |
| 4 October 2026 | Sunday | St. Francis of Assisi | Standard holiday |
| 1 November 2026 | Sunday | All Saints’ Day | Standard holiday |
| 8 December 2026 | Tuesday | Immaculate Conception | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
| 26 December 2026 | Saturday | St. Stephen’s Day (Boxing Day) | Standard holiday |
Sick Days
Employees in Italy are entitled to paid sick leave. Sick pay is provided through a combination of INPS benefits and employer payments, in accordance with the applicable collective bargaining agreement (CCNL).
INPS generally pays sickness benefits from the fourth day of illness, up to a maximum of 180 days per year. Employers may be required under the applicable CCNL to cover the initial waiting period and to supplement INPS payments. Sick pay rates and employer contributions vary by sector and collective agreement.
Employees are required to submit a medical certificate issued electronically by a doctor to INPS from the first day of illness.
Maternity Leave
All female employees in Italy are entitled to 5 months of mandatory paid maternity leave, generally taken two months before the expected due date and three months after childbirth. Subject to medical certification, maternity leave may be advanced earlier or postponed partially until after childbirth, in accordance with statutory rules.
During maternity leave, the employee is entitled to 80.00% of her regular salary, paid by the employer and reimbursed by INPS.
After maternity leave, parents may take parental leave, which is subject to statutory limits and partial pay conditions. In addition, working mothers are entitled to daily breastfeeding breaks, allowing reduced working hours until the child reaches one year of age.
Paternity Leave
The father is entitled to receive 100.00% of the regular salary and compulsory paternity leave of 10 days within five months of the child’s birth.
Parental Leave
In Italy, parents are entitled to up to 10 months of parental leave, which may extend to 11 months if the father takes at least three months. Parental leave is partially paid, subject to statutory limits.
From 1 January 2023, Italian law introduced one month of parental leave paid at 80% of salary, usable alternatively by either parent. This enhanced paid month must be taken within the child’s first six years.
Other leave
Bereavement Leave – In the event of the death or serious illness of a family member (up to the second degree), paid leave is granted up to a maximum of 3 days per year. The days of leave may be used by the employee within seven days of the death.
The worker is required to document the event with the relevant certification, the worker must inform the employer in advance of the event giving entitlement to the leave and the days on which it will be used.
Wedding Leave – Employees are eligible for a one-time period of 15 calendar days in the event of marriage.
Vacation Days
Public Holidays
Highest
Lowest
PAID MATERNITY LEAVE (DAYS)
Highest
Lowest
Termination
Termination Process
Termination must fall under one of the below specific causes:
- Just cause- a serious breach of trust constituting a grave violation of contractual duties. In this case, the employment relationship may be terminated without notice.
- Justified reason– which may be subjective (a less serious breach of contractual obligations) or objective (such as economic reasons or redundancy). In these cases, termination occurs with notice. Dismissal must be communicated in writing to the employee. Following dismissal, the parties may negotiate a settlement agreement, which is common in practice.
Mutual termination agreements are permitted and commonly used, particularly to reduce litigation risk. Any agreement must comply with statutory formalities to be valid.
Termination is prohibited if based on discrimination or retaliation, and is restricted during pregnancy, maternity leave, and until the child reaches one year of age, except in limited statutory cases. Dismissal during sick leave is restricted until the protected period expires. Special protections apply to employees with disabilities, subject to statutory conditions.
| Salary payment interval / date | Final payment on termination | Bank account payment requirement |
|---|---|---|
| Employees are typically paid monthly, with payment by the end of the month or shortly thereafter; pay intervals are set by contract, collective agreement or custom. | Upon termination, employers must pay all earned wages and the mandatory severance pay. TFR must be paid after termination within the timeframe set by law, applicable collective bargaining agreement (CCNL), or established practice. | Salary payments must be made using traceable payment methods. Cash payments are prohibited; permitted methods include bank transfer or other traceable instruments. |
Notice Period
The length of the notice period is determined by the applicable collective bargaining agreement and is dependent on enrollment level, category, and tenure. The employer may pay in lieu of notice. Garden leave is not possible under Italian Law.
Severance Pay
In Italy, severance pay (TFR) accrues for employees regardless of the reason for termination. Upon termination, the employee must be paid the Trattamento di Fine Rapporto (TFR), which is accrued annually by the employer.
TFR is calculated each year as the employee’s gross annual salary divided by 13.5. The accrued amount is revalued annually at a rate of 1.5% plus 75% of the inflation rate, as provided by law.
Any additional amounts paid to the employee as part of a settlement agreement are separate from and in addition to the statutory TFR.
Probation Period
In Italy, probation periods are not fixed by statute by job role. The probation period must be expressly agreed in writing and is determined by the applicable collective bargaining agreement (CCNL) or employment contract.
CCNLs typically set maximum probation periods, often up to six months, depending on role and classification.
Common Benefits
- Mobile phone allowances may be provided at the employer’s discretion and are not required by Italian law.
- Meal vouchers — electronic vouchers (non-taxable up to €8 in value each for each working day), paper vouchers (non-taxable up to €4 in value for each working day)
- Additional healthcare coverage is not required by law unless stipulated in a relevant collective labor agreement.
- Car allowances may be offered as a discretionary benefit and are subject to specific tax rules depending on usage.
- Wellness-related benefits are discretionary and not mandated under Italian employment law.
-
INAIL (Istituto Nazionale per l’Assicurazione contro gli Infortuni sul Lavoro) is Italy’s national authority that provides mandatory insurance coverage for workplace accidents and occupational diseases. Employers contribute to INAIL as part of their statutory employment obligations, and contribution rates are linked to workplace safety records. As of January 1st, 2026, INAIL contribution rates have been reduced by GoGlobal due to the absence of workplace accidents. This adjustment represents a very minimal decrease in employer contribution costs, as applied by the public authority.
Immigration
Foreign nationals coming to work in Italy generally require a national (D) work visa. After entering Italy, the worker must apply for a residence permit (permesso di soggiorno) within eight days of arrival in order to lawfully stay and work in the country.
Before the visa application, the employer must obtain a Nulla Osta (work authorization) through the Sportello Unico d’Immigrazione (SUI) at the competent Prefettura.
Work permits are subject to annual quotas established by the Italian government under the Decreto Flussi, and applications are accepted only during the officially designated filing periods.
VAT
General
The standard rate of VAT in Italy is 22.00%.
Stay up to date on payroll & employment law changes
Version History
June 5, 2024
NCBA renewal – Bonus for Dirigenti workers
January 1, 2021
Paternity leave increase from 7 to 10 days
Questions & Answers
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Payroll and Benefits Guide
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Payroll and Benefits Guide
in Italy
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
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All questions are answered by our in-house compliance department working in conjunction with our local in-country partner for this specific country
Public Holidays Calendar
Italy
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ICS
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 6 January 2026 | Tuesday | Epiphany | Standard holiday |
| 5 April 2026 | Sunday | Easter Sunday | Standard holiday |
| 6 April 2026 | Monday | Easter Monday | Standard holiday |
| 25 April 2026 | Saturday | Liberation Day | Standard holiday |
| 1 May 2026 | Friday | Labour Day (May Day) | Standard holiday |
| 2 June 2026 | Tuesday | Republic Day | Standard holiday |
| 15 August 2026 | Saturday | Assumption of Mary | Standard holiday |
| 4 October 2026 | Sunday | St. Francis of Assisi | Standard holiday |
| 1 November 2026 | Sunday | All Saints’ Day | Standard holiday |
| 8 December 2026 | Tuesday | Immaculate Conception | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
| 26 December 2026 | Saturday | St. Stephen’s Day (Boxing Day) | Standard holiday |
With companies moving to telework, are there any restrictions on hours or days worked?
The decision on whether a workforce works at home ore in an office is individual for every company. It does not have any impact on the labor laws between employees and employers.
Is there any compliance about payment of Social Security / Pension / Health insurance to Italy employees?
Hi Liron, employers in Italy are obligated to pay social security at a rate of 29%-32% and to withhold social security from employees at a rate of 10%. Italy has health care through the National Health Service provided to all Italian citizens and funded by taxes, and an old-age pension provided by the government. Collective bargaining agreements, however, may require employers to supplement what the government provides.
Which legal entity is the employee hired from? Do you have a collection of available legal entities?
Hi Edmondo, Everything we do is tailored for each company’s specific needs. I recommend you reach out to our sales team and they will find the right EoR for you. https://www.papayaglobal.com/contact-us/
If the agency worker works on a public holiday, are they entitled to a premium? If so, what is that?
Hi Wendy, usually work on holiday is paid at the rate of 130% of the regular pay, however, if a collective bargaining agreement is in place, it could be more.
We have received a request to pay one of Italian employees 12k euros towards study costs – please advise if there are any payroll actions re taxes / social security / informing Italian authorities.
Hi Sue, thank you for your question. Can you please provide some more information? Are you looking to pay for a specific course for your employee or is this a flat sum you’d like to give them? Do their studies have anything to do with the qualification of your employee? Lastly, will the employee be absent from work due to their studies?
Hi. Italy work law question. Please explain if you are sick while on vacation and get a doctors letter for the sick days, can/should the affected vacation days be amended to sick leave (as in UK). Thanks
If a worker can provide all the proper documentation (DR and INPS) and prove that they are ill, then those days should be considered sick days, not vacation days.
Thank you so much Erez.
Really appreciate your insight.
The Doctors medical certificate is proof of the illness and states the period “not fit for work”. (Date from: xxxx Date to: xxx)
Would be useful to know where this (illness during vacation days) is covered in Italian law…searching in English doesn’t find much!
All the best
Tim
Glad to help. A guide (unfortunately in Italian) can be found on The National Institute of Social Security (INPS) website explaining what to do if a worker becomes ill while on vacation. https://www.inps.it/news/malattia-allestero-cosa-fare-in-caso-di-assenza-dal-lavoro
Absolutely awesome. That is excellent info – straight to the right place. Thank you so much for your knowledgable guidance. Kind regards. Tim
Hi, is there any usual car allowance amount for sales person in Italy? Thank you.
Hi Jana, there is not.
hi. my company provides a fully paid car incl petrol with no limit. however they decided to remove this from us. as an employe do they have to pay us compensation on a monthly basis so we can commute from our home to the office and back? is there a legal obligation for the employer to keep providing us with the personal cars owned by the company, or any monthly allowance? thanks a lot.
A short drive to the company office is not considered a business trip and no reimbursement is required.
Should the Company’s office be very far from the employee’s home, it could be provided a reimbursement of expenses in case the employee is requested to reach the company’s office. However, such payment is not mandatory.
Different rules apply for travel and business trips requested by the company. In this case, the employee is entitled to receive reimbursement of expenses and travel allowance provided by the applicable NCBA.
Hi Erez,
Is it statutory to record employee expense reimbursement in payroll in Italy?
Thank you,
Gabi
Yes, it is
Hi,
If indian employee coming to italy abs spent 2 years,
Can he collect social security amount while leaving from italy.
Also italy has 70% exception law in salary for new talent. Is it applicable to Indian citizen coming to italy and staying minimum 2 years?
Foreign citizens who possess specific documentation, such as a residence permit, are enrolled in the social security system. An individual must reside in Italy for more than 183 days a year and not have been in Italy during the two tax periods prior to the transfer in order to qualify for tax relief; they must reside in Italy for a minimum of two years; they must work primarily on Italian soil.
Yes, I am selected In Italian Company and they are giving me the family visa.
I will be also register with Social security.
we are going to spent more than 2 years in Italy.
so can I get 70% tax relief ?
Hi Erez,
Thanks for your reply
Yes I am selected in Italian Company and they are proving family visa.
I will be also going to register with social Security in Italy.
This is first time I am coming to Italy in 1 week of October
So can I say, I will get tax relief of 70% ?
You mentioned pay rates for working on a public holiday. Is time off in lieu permissible in Italy?
In most companies, only the days worked by certain levels of employees are tracked, so weekend work and public holidays are automatically recorded. Overtime would be paid automatically on weekends and public holidays.
If the net income is 52500, how do you calculate the gross salary, which includes all government fees and taxes as well as additional benefits?
The calculation of net to gross cost in Italy is contingent on various factors, including the classification of the worker, collective bargaining agreements (CBA), the type of occupation, and other relevant factors. It is important to consider these variables when determining the net to gross cost for employees in Italy.
While Papaya do not provide a net to gross cost calculator, I would advise to explore other resources, consult with a professional accountant, or tax advisor who can assist in accurately calculating the net to gross cost based on the specific circumstances and variables involved.
On Paternity Leave of sales workforce who have a base salary + bonus, does an average bonus amount need to be provided to them in the calculation of the paternity leave?
Paternity Leave
The father is entitled to receive 100.00% of the regular salary and compulsory paternity leave of 10 days within five months of the child’s birth.
Paternity pay is calculated on the basis of the average salary of the previous month.
What European countries have mandatory base salary increases in 2024?
Currently, this matter is being discussed in several European countries. One anticipated location for an increase is Luxembourg; however, the exact date has not been finalized yet.