Aside from the picturesque views and the rich cultural heritage that the country has to offer, Italy boasts of a progressive financial standing, being the 9th largest economy in the world. Their economy focuses mainly on the services and manufacturing sector, which makes up three quarters of their GDP.
Italy’s achievements can only be attributed to their highly skilled workforce. People in Italy tend to be traditional and have a high sense of history, even with their approach to business. It is because of this that the country’s culture and practices are recognized distinctly across the world, having their own people as the country’s ambassadors.
More information about average salaries in Italy can be found on SalaryExplorer.
Employers need to contribute 32.4% of the wages to social security.
Employees pay 10% into the state fund for unemployment benefits.
Income tax is levied at a progressive rate on all annual income as follows:
More information on income taxes levied can be found here.
There is no minimum wage set by law.
Workers are paid once a month. Paydays are generally on the 27th of the month.
13th month salary
Quite a few employees in Italy are entitled to additional month’s remuneration (13th month salary) which is generally paid in December and referred to as Christmas Bonus when it applies to factory or manual workers.
The standard working hours in Italy are 40, with about 8 hours a day on an average.
Any hours exceeding the regular 40 working hours a week is considered overtime and should get paid at 10% over their regular rate. 8 hours of overtime can be approved and fixed by the company.
There are a total of 12 public holidays in Italy. The list of public holidays can be found here.
The Civil Code provides a minimum leave of eight days for domestic workers only. Depending on the collective agreement between the employer and employees, leave is given to employees. However, they are generally not less than four weeks of paid leave in a year.
Employees are entitled to sick pay starting from the 4th day of absence from work. Statutory paid sick leave is for a maximum of 180 days a year.
Employed working mothers are given upto 5 months - a period of obligatory absence from work for the period of pregnancy and postnatal recovery.
Paternity paid leave of 7 days is offered and can be claimed within five months of the child’s birth and granted at the same time as the maternity leave.
The contract can be terminated if the employment relation cannot be maintained:
Notice period is decided by collective bargaining agreement.
A severance pay is not a requirement in Italy. However, employees who have been dismissed or have resigned are legally entitled to the Trattamento di Fine Rapporto (TFR).
According to the Italian Civil Code, any employee terminated, regardless of the reason, has the legal right to receive a leaving indemnity or the TFR. The calculation of it is as follows:
Generally, probation periods in Italy depend on the employer's discretion. However, it is expected that an employee’s probation period will not last longer than six months.
Italians and foreigners currently residing in the country have access to the healthcare system through the National Health Service (SSN). But for employees particularly, employers must enroll them in the National Insurance System to give them coverage in case of accidents during work or diseases. This insurance is controlled and managed by the National Institute for Insurance against Accidents at Work and Occupational Disease (INAIL).
Both employees and their employers are mandated to pay their contributions. In the event of sickness or tragedies, employees can avail of their insurance either in kind or in cash.
In Italy, employers are free to offer a share plan to their employees, may be in publicly listed companies or may be given as an incentive in a private equity sector. Employees may subscribe to a certain number of shares after the vesting period of three years. Shares that are issued are either through a share capital increase or through an existing share. For a general overview of Italy’s ESOP, you may refer to this link here.
Italy’s VAT for 2021 is 22% and is projected to remain as is until 2022.
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