Italy

Contracts can be fixed term for a maximum of 36 months, or 60 months for senior managers (dirigenti) including any extension. Five extensions are permitted and there must be a gap between contracts unless the previous contract was for less than 6 months. For longer contracts there should be a gap of 20 days. Other contract types are indefinite, full-time, part-time and on call. On call contracts are similar to zero hours contracts allowing an employee to be called in for a short-term period at short notice. Fixed term contracts cannot exceed 20% of the workforce.

Probation

Probation cannot be more than 6 months, and is agreed in writing in the contract, subject to the collective bargaining agreement (CCLA). Up to 6 months for managerial roles and up to 3 months for probation for those below managerial level.

Working Hours

40 hours, 8 hours per day

Overtime

Limited to 2 hours per day and must be approved. Total hours cannot exceed 48 hours per week or 250 hours per year. There is no regulation governing overtime rates except that it must exceed salary by 10% and should be agreed in the contract between the employer and employee. The number of hours worked should be stated on the payslip.

Other Financial

A 13th month or annual bonus is paid in December. Some CCLAs also provide employees with a 14th month salary paid in June. These are paid proportionately if the employee has only worked for part of the year. They accrue during leaves of absence (sickness, maternity etc) except parental leave and unpaid absences.

Other

Paydays are the 27th of the month. Each industry has a National Collective Labour Agreement (CCLA) and this will determine many of the terms of the contract such as length of probation and notice period and these cannot be altered. In addition the terms of CCLA will vary according to the classification of the employee.

Corporation Tax 2024: 24%

Banks and other financial institutions are subject to a corporate tax of 27%.

Consumption Tax: 22%

Employers’ Social Security: 29.4% – 33%

Employees’ Contributions: 10%

Income Tax Rates: 

Up To 28,000 EUR – 23%

28,000-50,000 EUR – 35%

Over 50,000 EUR – 43%

Employees are also subject to regional at 1.23% to 3.33% and municipal income taxes of up to 0.9%. There are additional taxes for bonuses.

Notice

The notice period will vary according to the CCLA in force, but can be between 30 days and 12 months when notice is given by the employer, and between 30 days and 4 months for the employee.

Payment in lieu of notice is allowed.

During Probation

Each party is free to terminate the contract without notice and without having to pay in lieu of notice.

In Italy employees on permanent contracts cannot be terminated without just cause, eg gross misconduct. There are specific procedures to be followed for any form of termination.

Severance Pay

The employer must set aside funds for severance to be paid out within 6 months of leaving company. This end of service allowance, known as “trattamento di fine rapporto” is mandatory and must be paid for any kind of termination. The amount which should be set aside for this is around 7.4% of employee’s pay.

National Public Holidays: 11 national, 1 regional

New Year’s Day – 1st January

No day given in lieu

Epiphany – 6th January

No day given in lieu

Easter Monday – 1st April

Day given in lieu N/A

Liberation Day – 25th April

No day given in lieu

Labour Day – 1st May

No day given in lieu

Republic Day – 2nd June

No day given in lieu

Assumption of the Blessed Virgin Mary – 15th August

No day given in lieu

All Saints’ Day – 1st November

No day given in lieu

Immaculate Conception Day – 8th December

No day given in lieu 

Christmas Day – 25th December

No day given in lieu

Second day of Christmastide / St. Stephens Day – 26th December

No day given in lieu

If a public holiday falls on a Tuesday or Thursday then due to the “bridge” concept employees can take off the Monday or Friday to make a long weekend.

Public holidays falling on a Sunday are not included.

All leave entitlement is based on a 5 day working week. The number of days quoted are working days unless stated otherwise.

Paid legal entitlement (working days)

20 days plus 32 hours of paid leave. At least 2 consecutive weeks must be taken during the year which may not be replaced by monetary compensation. The CCLA may provide for more holiday – typically 26 or 29 days depending on the employee’s job classification. From the second year of employment, employees earn additional leave each month worked of 2.66 hours per month known as ROL. This leave must be paid out if not used.

Carry over permitted

Any unused holiday can be carried over and must be used within 18 months from the end of the accrual year. After this period employees may be paid for any remaining unused holiday.

Timings

The holiday year starts on January 1st.

Payment in lieu allowed

No, unless holiday entitlement exceeds 20 days, except in the case of leave carried over as described above.

Sick

Employees are entitled to paid leave of 180 working days per year in the event of a serious illness (a doctor’s note is required). The first three days are paid 100% by the employer. From the 4th to the 21st day, 50% of sick pay is covered by the government and 50% by the employer. From the 21st day onwards, 66% of sick pay is covered by the government and 34% by the employer. Leave of up to 2 years may be allowed for serious, documented family reasons. When the employee has exhausted the 180 days’ sick leave in total in one calendar year (not necessarily in one block) then he may be terminated.

Maternity

In Italy, new mothers are entitled to leave for two months prior and three months following the due date, though these timings can change depending on medical circumstances. Maternity pay is equal to 80% of salary, paid by the Social Security System via the employer. Some CCLAs require employers to top up maternity pay to 100%. In addition, new mothers cannot be dismissed from the 1st day of maternity leave until the child is 1 year old, except in special circumstances.

Paternity

Fathers are entitled to 10 days’ (20 for multiple births) paid leave within the first 5 months of the child’s birth. If the mother does not take her full maternity leave the father is entitled to the remainder due. Employees must notify the employer 5 days prior to taking the leave. If the mother dies, becomes seriously ill, leaves the father with custody of the child or the father has exclusive custody, then the father is entitled to full maternity leave and rights. New fathers are protected in the same way as mothers from dismissal.

Parental

Up to 10 months parental leave may be taken at 30% of salary. Since 2023 an additional month’s leave may be taken paid at 80% of salary. All parental leave is to be used before the child is 12. If a mother chooses not to take leave after her maternity leave, she is entitled to work 6 hours a day until the child is 12 months old.

Study

Employees with at least 5 years’ service may request a maximum of 11 months unpaid leave to attend an educational establishment.

Marriage

Usually 15 days of paid leave.

Bereavement

Employees are entitled to paid leave of three working days each year for the death of a spouse or second degree relative.

Other

Continuous or discontinuous leave of up to two years may be allowed for serious, documented family reasons.

Medical

Medical insurance supplementary to the state system is often provided by employers under schemes such as the Fonde Est. which is specific to the collective bargaining agreement for each company. In many cases the scheme will not allow the addition of family members and there are waiting periods before employees can register. Some companies may offer an allowance to cover enhanced medical insurance.

Life

Life insurance is not usually offered.

Other

Some companies offer allowances to cover items such as mobile phone expenditure.