Global Expansion Resources | Italy
Italy Payroll Solutions
Ensure a smooth and compliant expansion into Italy with Leap29’s expert Italy payroll services
Italian payroll services tailored to your business
Expanding into Italy offers your business the potential to access the country’s highly educated workforce with 63% of 25-34 year-olds now going on to further education as of September 2025. There are also valuable opportunities to grow your existing customer base and leverage financial incentives, such as the 20% R&D (Research & Development) tax credit. Sounds great, right?
But global expansion isn’t easy. To ensure a smooth and compliant process, you’ll need specialist support tailored to your business – exactly what Leap29’s Italy payroll solutions can offer you.
- Company-wide payroll management via a single point of contact.
- Less stress and administrative burden, allowing you to focus on core business management.
- Guaranteed compliance with Italian payroll regulations.
- Optional API integrations with your HR, finance and accounting packages.
How do you run payroll compliantly in Italy?
To run payroll compliantly in Italy, some of the steps your business will need to take include:
- Registering with an Italian notary.
- Registering with the Agenzia delle Entrate (Tax Office/Italian Revenue Agency), Ministero del Lavoro e delle Politiche Sociali (Ministry of Labour and Social Policies), Istituto Nazionale Previdenza Sociale or INPS (Social Security) and Istituto Nazionale per L’Assicurazione contro gli Infortuni sul Lavoro or INAIL (Insurance Institute).
- Submitting the necessary documents to the Italian Business Register.
- Obtaining a VAT number and taxpayer number.
- Opening a local bank account.
Want to expand into Italy?
Contact us today to see how Leap29 can be the trusted partner that supports your global expansion.
"*" indicates required fields
What’s included:
HR software
Bespoke employee management software included in our PEO service.
Global compliance
We have expert teams across the world to ensure global compliance.
Transparent pricing
Avoid hidden costs and account for our fee with our transparent pricing.
Italy: Payroll & Expansion Advice
Italian Wages & Pay
Italian Minimum Wage
Rather than a government-set minimum wage, Italian wages are usually governed by Collective Bargaining Agreements (CBAs), which are negotiated by trade unions and employer associations. Covering numerous sectors and regions across Italy, these agreements set different minimum wage standards for different types of jobs and industries.
Italian Sick Pay
Italian employees are entitled to 180 working days of paid leave per year in the event of a serious illness, but a doctor’s note is required. The exact amounts and percentages paid depend on the CBA, but generally are as follows:
- Days 1-3: Paid 100% by the employer.
- Days 4-20: 50% is paid by the government and the other 50% by the employer.
- Days 21-180: 66% is paid by the government and 34% by the employer.
Italian Severance Pay
Severance pay, or ‘trattamento di fine rapporto’, is mandatory for all types of termination in Italy and must be paid out within six months of leaving a company. The employer must set aside ~7.4% of the employee’s pay to cover this.
For more information on maternity, paternity, parental, study, marriage and bereavement leave in Italy, please see our Italy location page.
Employment Deductions in Italy
Income Tax in Italy
Italy uses a progressive personal income tax system, known as Imposta sul Reddito delle Persone Fisiche (IRPEF).
|
Annual Income (€) |
Tax Rate (%) |
|
Up to €28,000 |
23% |
|
€28,001 – €50,000 |
35% |
|
Over €50,000 |
43% |
Employees are also subject to regional taxes at 1.23% – 3.33% and municipal income taxes of up to 0.9%. There are additional taxes for bonuses.
Social Security in Italy
Compulsory for both employers and employees, social security contributions in Italy are used to fund important employee benefits such as healthcare, pensions and unemployment support. Rates differ depending on the sector, company size and specific employee circumstances.
- Employers: ~28% – 33% of the employee’s gross salary (the exact figure depends on the sector and the employee’s role).
- Employees: ~9.19% – 10.49% of their gross salary (the rate varies depending on the employee’s earnings).
Pensions in Italy
Managed by the INPS, public pensions in Italy are based on a pay-as-you-go model, which means current workers’ contributions fund the pensions of retired individuals via their social security payments. Both employers and employees contribute to the Italian pension system.
There are also voluntary workplace pension schemes available, which allow employers and employees to benefit from tax advantages. These schemes can be part of CBAs in certain sectors and there are different types, including:
- Closed pension funds (fondi pensione chiusi)
- Open pension funds (fondi pensione aperti)
- Individual pension plans (PIPs)
Italian Leave & Time Off
In Italy, employees are entitled to:
- 20 working days (plus 32 hours) of paid leave
- 11 national public holidays and 1 regional holiday (public holidays falling on a Sunday are not included)
All leave entitlement is based on a 5-day working week.
Employee Benefits in Italy
Compulsory employee benefits in Italy include:
- Paid leave (including sick, maternity and paternity leave)
- 13th and 14th month salary (depending on the CBA)
- Health insurance
- Accident insurance
- Family allowances
- Meal vouchers (depending on the sector and whether a CBA is involved)
Common voluntary benefits include:
- Workplace pension plans
- Performance bonuses
- Flexible working
- Additional paid leave
- Childcare assistance
- Relocation assistance
- Wellness programmes
- Private health insurance
What are the benefits of expanding your business into Italy?
The benefits of expanding your business into Italy include, but are not limited to:
- Access to the 8th largest economy in the world, with a nominal GDP (Gross Domestic Product) of $2.74 trillion as of 2026 (according to the International Monetary Fund).
- Strong, well-established trading links with Europe, America, Africa and Asia due to its strategic location at the centre of the Mediterranean Sea.
- Tariff-free access to over 440 million consumers in the EU (European Union).
- A 10% tax credit for eligible costs incurred from technological and digital innovation investment activities, among others.
How can Leap29’s Italy payroll solutions support your expansion?
Despite Italy offering promising trade opportunities, access to EU markets and plenty of incentives for FDI (Foreign Direct Investment), your business will need compliant payroll processes in place to ensure a smooth expansion.
If you’re concerned about having the right amount of knowledge, time and technology to keep up to speed with Italian payroll requirements, allow Leap29 to handle the complexities for you, including:
- Calculating employee salaries (including the 13th/14th month payments).
- Creating and issuing monthly payslips.
- Calculating tax-free allowances and applicable tax rates.
- Filing and submitting monthly payroll reports and tax withholdings to Agenzia delle Entrate.
- Complying with Italian immigration, tax and social security laws.
- Processing multi-currency payments across different time zones.
- Complying with Italian employment laws regarding contracts, taxation, termination, leave and any applicable employee benefits/insurance.
Why choose Leap29 to be your Italy payroll provider?
With over 25 years of experience across 180+ countries, our global expansion team knows international payroll like the back of their hand.
Think of us as an extension of your team, there to help you every step of the way. Offering a flexible service, our specialists can adapt to meet your business’ needs. If all you need is payroll, we’ve got you covered. But if you’re also looking for a full HR service to support you in dealing with employment contracts, country-specific benefits and individual employee queries – we can help in this department too.
Whether you want to expand into Research & Development, or maybe you’re just getting started with renewables, Leap29 have supported business expansions across a multitude of industries, including:
- Aerospace
- Construction & Engineering
- Education
- Life Sciences & Pharmaceuticals
- Manufacturing
- Medical & Healthcare
- Oil & Gas
- Renewable Energy
- Technology
- Transport & Logistics
To find out more about how our Italy payroll solutions can support your global expansion, call our experts today on +44 (0) 20 8129 6860 or email us at expansion@leap29.com.
Worried about the financials? Try our Employee Cost Calculator to find out the figures behind employing internationally in seconds. Just enter your chosen country and base salary, and your estimate will show up on-screen straightaway.
Don’t take our word for it!
“
Talk to an expert today
Contact us today to see how Leap29 can be the trusted EOR partner that supports your global expansion.
"*" indicates required fields
Italy
Expansion Resources
Local expertise, global reach
Employ people compliantly in 180+ countries – with or without your own foreign entities. We can help you set up and manage foreign entities – or act as an Employer of Record. We can also help with multi-country payroll and all your HR management. Wherever, whenever and however you want to employ people, we can help.
180+
We make expansion in Italy simple
Employing people compliantly across international borders can be challenging but we make it simple, bringing down barriers and making light work of the complexities. We offer the full range of compliant global expansion solutions so that wherever, whenever and however you want to employ people, we can support you.
EOR Services
Employ people compliantly in 180+ countries – without setting up new entities. We’ll shoulder responsibility as Employer of Record (EOR), making sure all your international employment is fully compliant.
We can also take care of your global HR from multi-country payroll to onboarding and offboarding.
Payroll Solutions
Getting global payroll right is one of the hardest challenges for any business expanding into new countries. We can shoulder this burden, freeing up valuable in-house resource to focus on growing your business.
Consider us an extension of your HR team, ready to answer all your questions large and small.
Global Mobility
Mobilise your people across borders with ease. Relocating to work abroad can feel daunting. But with Leap29 at your side, your employees can feel safe and supported.
We’ll guide your employees through the complexities of working in another country, helping them settle in fast.
Entity Services
Follow the opportunities to grow your business – wherever they take you.
We lighten the load of establishing and managing foreign entities and can help you solve all your entity challenges from running compliant, accurate multi-country payroll to local accounting and financial reporting.
PEO Solutions
Employ international talent wherever and whenever you need it – and enjoy the peace of mind of knowing you’re fully compliant. Our Professional Employer Organisation (PEO) services allow you to focus on growing your business while we handle compliance, multi-country payroll and your global HR.
Support & Advisory
The help you need to make your global growth effortless – trusted guidance and advice on your expansion challenges large and small.
HR Support
When you’re employing people in lots of different countries, answering just a simple query can take a disproportionate amount of time for your in-house HR team. Our HR Support service reduces this burden, saving you time and money and giving you the confidence of knowing your employees are well looked after, whatever their location.
Contractor Payroll
Enjoy compliant contractor payroll that meets all local requirements for tax, social security and employment legislation. We understand the importance of compliant contractor payroll to the success of your business and will pay your contractors on time, every time.
Start hiring today – and onboard within hours.
Pricing
Budget confidently with transparent, competitive fees and no hidden costs.
Want us to shoulder employer liability and take care of your global HR through our EOR solution? No problem. Just want global payroll? You can have that too. Pick the solutions that your individual business needs.