# Hiring in Italy: employment costs, payroll and compliance

> Machine-readable page from EOR Overview (https://eoroverview.com/), an independent research platform for Employer of Record services.
> Canonical page: https://eoroverview.com/hiring-guides/italy/
> Methodology: how providers are researched, scored and compared is documented at https://eoroverview.com/methodology/.
> Disclosure: EOR Overview is free to use. We may earn a referral fee from some providers; this never affects a rating or ranking position (https://eoroverview.com/disclosure/).
> Statutory data last updated: 2026-02-23. Every figure below carries its own source year.

## Country

| Field | Value |
|---|---|
| Region | Europe |
| Currency | EUR (Euro) |

## Pay & working time

| Field | Value | Source year |
|---|---|---:|
| Average wage | 51,019 | 2024 |
| Statutory work week | 40 hours/week | 2024 |
| 13th-month salary | mandatory | 2026 |

## Employer cost & tax

| Field | Value | Source year |
|---|---|---:|
| Employer social security | 31.6% | 2025 |
| Employee social security | 9.5% | 2025 |
| Total tax wedge | 45.8% | 2025 |
| Corporate tax rate | 27.8% | 2025 |

## Termination

| Field | Value | Source year |
|---|---|---:|
| Notice period | 4.5 weeks | 2019 |
| Severance pay | 0 weeks | 2019 |
| Employment protection | 2.9 | 2019 |

## Leave & time off

| Field | Value | Source year |
|---|---|---:|
| Paid annual leave | 20 days | 2026 |
| Public holidays | 12 days | 2026 |
| Maternity leave | 21.7 weeks | 2024 |
| Paternity leave | 14.9 weeks | 2026 |
| Parental leave | 26 weeks | 2024 |

## Labour market

| Field | Value | Source year |
|---|---|---:|
| Retirement age | 64 | 2024 |
| Unemployment rate | 6.4% | 2025 |
| GDP per capita | $40,385 | 2024 |
| Union density | 30.2% | 2024 |
| Collective bargaining coverage | 100% | 2024 |

## Overview

Italy's employer social security contribution sits at 31.58% of gross salary, and that number shapes your entire cost model before you factor in a single benefit or bonus. What you get in return is access to a labour force of over 25.5 million people, a statutory framework that is detailed and well-established, and collective bargaining agreements that cover 100% of the workforce. Using an Employer of Record (EOR) means you can hire without setting up a local entity, while the EOR handles the contributions, contracts, and compliance that Italian law demands.

The average annual wage runs to just over 51,000 EUR, and the total tax wedge lands at 45.8%, so Italy is not a low-cost market. Employees also contribute 9.49% of gross in social security themselves, which affects how candidates read their net pay. A statutory 40-hour work week applies, and the notice period for a standard termination is 4.5 weeks. Getting these basics right from day one matters, because Italian employment law leaves very little room for informal arrangements.

## Cost context

The main driver of employer cost in Italy is the social security contribution rate of 31.58% of gross salary, paid on top of whatever you agree to pay the employee. This single charge covers pensions, healthcare, and other statutory insurance schemes. With the employee contributing a further 9.49% on their side, the combined social security burden on any given salary is substantial, which is why Italy's total tax wedge reaches 45.8% and why gross-to-net calculations here look very different from lower-contribution markets.

## Things to watch

A few specifics about Italy tend to catch foreign employers off guard, so it is worth knowing them before you make an offer.

- Employer social contributions add 31.58% on top of gross salary. Budget for this from the start. On a salary near the average of 51,000 EUR, the employer cost is meaningfully higher than the headline figure an employee sees.

- Collective bargaining agreements apply to everyone. With CBA coverage at 100%, the relevant national contract for your employee's sector sets minimum pay, working conditions, and often additional entitlements. There is no opting out.

- The total tax wedge is among the highest in Europe at 45.7%. Candidates may push for higher gross salaries to compensate for their own 9.49% social security deduction, so factor that into offer negotiations.

- Employment protection is strict. Italy's overall employment protection legislation score is 2.9 on the OECD scale, covering both regular and temporary contracts. Dismissals require documented justification, and the process for ending employment needs to follow the applicable CBA as well as the law.

Providers ranked for Italy: https://eoroverview.com/best/italy/