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Italy

Basic Economic Summary

Overview

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. 

Basic Information

  • Local Languages: Italian, English
  • Capital: Rome
  • Currency: Euro
  • Population: 59.53 million (2022)
  • Date Format: dd/mm/yyyy

Useful Information

  • GDP Per Capita (in USD): 35,200.00 USD (2022)
  • Exchange Rate (EUR/USD): 1.13
  • PISA Ranking (2018): 34*
  • Number of University Graduates: 399,800* (2018)

Local Universities

Top Local Universities

University No. of graduates Rankings
University of Bologna 18,000 Ranking in Italy: 1, World Ranking: 112
Sapienza University of Rome 23,062 Ranking in Italy: 2, World Ranking: 121
Università degli Studi di Padova 38,495 Ranking in Italy: 3, World Ranking: 140
Università degli Studi di Milano 40,000 Ranking in Italy: 4 World Ranking: 145
Università degli Studi di Napoli Federico II 30,000 Ranking in Italy: 5, World Ranking: 150

Salary Data

Average Salary of Jobs (Per Month)

Job Title Salary Range (in EUR) Salary Range (in USD)
Technical Product Engineer 1,540 - 5,340 1886.38 - 6541.10
Software Developer 1,950 - 5,750 2388.60 - 7043.32
Data Analyst 1,650 - 5,260 2021.13 - 6443.11
UX Designer 1,260 – 4,000 1543.41 - 4899.70
Project Manager 2,170 – 6,390 2658.09 - 7827.27
Sales Executive 2,320 – 24,100 362.79 – 876.08
Chief Accountant 1,520 - 7,550 1852.64 – 9202.24

More information about average salaries in Italy can be found on SalaryExplorer.

Talent Sourcing Tips

Taxes

Employer Payroll Tax

Employers need to contribute 32.4% of the wages to social security.

Employee Payroll Tax

Employees pay 10% into the state fund for unemployment benefits.
Income tax is levied at a progressive rate on all annual income as follows:

Tax Rate Income Group
0.00% Up to 15,000
27.00% 15,000 - 28,000
38.00% 28,000 - 55,000
41.00% 55,000 - 75,000
43.00% Over 75,000

More information on income taxes levied can be found here.

Minimum Wage & Payroll

Minimum Wage

There is no minimum wage set by law.

Payroll Cycle

Workers are paid once a month. Paydays are generally on the 27th of the month.

Bonus

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.

Working Hours & Statutory Leave

Working hours

The standard working hours in Italy are 40, with about 8 hours a day on an average.

Overtime pay

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.

Public Holidays

There are a total of 12 public holidays in Italy. The list of public holidays can be found here.

Leave

Annual Paid Leave

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.

Sick Leave

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.

Parental Leave

  • Maternity Leave

Employed working mothers are given upto 5 months - a period of obligatory absence from work for the period of pregnancy and postnatal recovery.

  • Paternity Leave 

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.

Offboarding & Termination

Termination Process

The contract can be terminated if the employment relation cannot be maintained:

  • Incase of breach of employment contract
  • When such an event occurs, even outside the employment relationship, which has an impact in the working environment causing the deterioration of the relationship between the employer and the employee

Notice Period

Notice period is decided by collective bargaining agreement.

Severance Pay

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: 

  • Employee’s gross annual salary divided by 13.5. 
  • Deduct a withholding tax of 0.5% for the Italian Social Security / pension agency (INPS). This payment will fund the INPS to ensure that workers receive their TFR in the event that the company is incapable of doing so.

Probation period

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.

Employee Benefits

Insurance

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. 

Employee Stock Ownership Plan (ESOP)

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.

VAT

Italy’s VAT for 2021 is 22% and is projected to remain as is until 2022. 

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