PEO Italy

Professional Employer Organization (PEO)

Employer of Record (EOR) | Remote Work

peo italy

World Bank Ease of Doing Business Ranking

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  • DB Rank – 58
  • DB Score – 72.9

Rankings on Doing Business topics – Italy

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Topic Scores

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Global PEO in Italy

Italy, as a Professional Employer Organization (PEO) destination, offers a unique blend of rich cultural heritage and a burgeoning business landscape. Nestled in the heart of Europe, Italy’s allure as a PEO country lies in its skilled workforce, well-developed infrastructure, and strategic location for accessing European markets. With a diverse range of industries including fashion, automotive, manufacturing, and technology, Italy provides ample opportunities for companies seeking to expand their global footprint. The country’s commitment to innovation and entrepreneurship is reflected in its thriving startup ecosystem, making it an attractive choice for enterprises looking to tap into creative talent and cutting-edge ideas. Moreover, the country’s high quality of life, renowned cuisine, and stunning landscapes make it an enticing destination for both employees and employers. As a PEO destination, Italy not only offers access to a skilled labor pool but also a vibrant cultural experience that can enrich the professional journey for businesses and their employees alike.

What Is a PEO?

A PEO, or Professional Employer Organization, is a company that provides a range of HR and payroll services to small and medium-sized businesses. These services can include employee benefits, payroll, compliance with labor laws, and recruiting and training.

PEOs work by entering into a co-employment agreement with the businesses they serve. In this arrangement, the PEO becomes the employer of record for the business’s employees, taking on responsibilities such as payroll, tax withholding, and employee benefits. The business, however, retains control over its day-to-day operations and the supervision of its employees.

PEOs can help businesses streamline their HR and payroll processes, reduce costs, and free up time and resources to focus on their core business activities. They can also provide access to a range of benefits and resources that small businesses may not be able to afford or manage on their own.

PEOs are also understood as employer of record / EOR at times.

Italy – Country Overview

Italy, a country with a long Mediterranean coastline, has over 60 million people and a rich, historical, and worldwide popular culture in arts, architecture, music, and food. Popular architectural sites in Italy include the Leaning Tower of Pisa, the Basilica of St. Mark, and the Coliseum. In addition, cities such as Venice, Florence, and Rome, which are among the oldest cities globally, are popular tourist destinations.

Capital City



Euro (EUR) 

Principal Language



Parliamentary Republic

Employment Contracts in Italy

It is permissible under Italian labor law to draw up permanent employment contracts in writing, but it is not required. 

Some of the details typically mentioned in the written contract include: 

  • The start date, length of the employment relationship, and the type of employment relationship 
  • Duration and conditions of the notice period 
  • and more 

The different types of employment relationships are: 

  • Permanent Employment – Unless specified in the employment contract, employment in Italy is deemed indefinite. 
  • Fixed-Term Contracts – Per Italian law, fixed-term contracts should not exceed 24 months, including renewal. Employers can renew fixed-term agreements up to 4 times as long as the total length does not exceed 24 months. The contract becomes permanent after five renewals. 
  • Temporary Employment – The term “temporary employment” is not defined explicitly in Italian labor law. It does, however, provide for a variety of flexible work arrangements, including:  
    • Fixed-term work  Intermittent work 
    • Solidarity contracts 
    • Apprenticeships 

Probationary Period 

In Italy, a probationary period lasts up to 6 months for managerial employees, and for all other employees, it could last up to 3 months. However, the maximum probationary term may vary depending on the industry or the relevant collective bargaining agreement. 

Working Hours in Italy

A typical workday is 8 hours long, while a standard workweek is 40 hours long (based on a 5-day cycle). 

Employee Leave in Italy


Employees in Italy are entitled to the following leaves: 

  • Annual leave– Per Italian labor law, employees are usually entitled to at least four weeks of paid annual leave. 
  • Maternity leave – Italy’s female workers are typically entitled to at least 20 weeks of paid leave under Italian labor legislation. It is usually divided into eight weeks before birth and 12 weeks following birth, with the latter two being variable. 
  • Sick leave – Employees in Italy are generally entitled to three days of paid sick leave per year. The National Institute for Social Security reimburses employers for providing a statutory sick benefit to their employees (INPS). 
  • Paternity leave – Per the Italian labor law, fathers continue to be absent from work for the duration of the maternity leave. 

Public Holidays 

The following are the statutory national holidays observed in Italy: 

  • January 1 – New Year’s Day 
  • January 6 – Epiphany 
  • April 4 – Easter Sunday 
  • April 5 – Easter Monday 
  • April 25 – Liberation Day 
  • May 1 – Labor Day / May Day 
  • June 2 – Republic Day 
  • August 15 – Assumption of Mary 
  • November 1 – All Saints’ Day 
  • December 8 – Feast of the Immaculate Conception 
  • December 25 – Christmas Day 
  • December 26 – St. Stephen’s Day 

Other Paid Leave

  • Employees in Italy are entitled to four weeks of paid annual leave
  • Employees may also be entitled to additional paid leave, depending on their contract of employment
  • Employees who work shifts or irregular hours may be entitled to additional paid annual leave.


Income tax

If you’re a foreign resident working in Italy, you’re only taxed on the income earned in the country. The tax rates are progressive and range from 23% to 43%.

Additional taxes of up to 3.33% can be levied at regional and local levels.

Italy corporate tax rate

The corporate tax rate is 24%. Additional taxes are due at the regional and local level of up to 3.9% – and more depending on the sector, for example, banking.

Employee Termination in Italy

The Italian Civil Code does not mandate the length of the notice period. Nonetheless, the employee’s years of service and professional level and the relevant collective bargaining agreement are usually the determining factors. 

Global Mobility in Italy

Italy is part of the Schengen Borders Agreement, together with 25 other European countries. 

Foreigners with a Schengen sojourn permit from another Schengen country do not require a visa for stays of less than three months if they are not coming to work or study. 

There are typically three categories of visas issued by the Italian Ministry of Foreign Affairs and International Cooperation: 

  • Uniform Schengen Visas (USV)– Uniform Schengen Visas are type C visas (short-stay or travel visas) valid for up to 90 days and single or multiple entries into all Schengen countries. 
  • Limited Territorial Validity Visas (LTV) – Limited Territorial Validity Visas are only valid in the Schengen country from which they were issued and are valid for humanitarian or national interest purposes. 
  • Long Sojourn or National Visas (NV) – Long Sojourn or National Visas are type D visas valid for stays longer than 90 days for single or multiple entries. 

Different immigration rules apply to foreign workers of various nationalities. For example, the European Union (EU) and the European Economic Area (EEA) nationals can work in Italy without a work permit. However, before entering Italy, foreign nationals from non-EU/EEA countries must typically have a valid work permit from their Italian employer and obtain a work visa from the Consulate of Italy in their country of residence. 

Employee Benefits in Italy

In Italy, the Ministry of Labor and Social Security governs the National Social Security Institute (INPS), which provides different pension benefits. 

Some examples of social insurance programs are: 

  • Dependents’/Survivors Benefit – If the deceased employee made at least 780 weekly contributions or 260 weekly contributions, at least 156 of which were made in the five years preceding the date of death, then the survivors are eligible for a pension. The survivor’s benefit is calculated based on the retirement of the deceased employee. 
  • Life and Disability Insurance/Benefit – Invalidity pensions are paid to insured workers who suffer from a permanent inability to perform any work. They have contributed for at least five years, three of which were in the five years preceding the application. 
  • Unemployment Insurance – The New Social Insurance for Employment (NASpI) is a monthly payment made to those laid off involuntarily. 

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