Accountancy in Italy

>> Employment in Italy


There is no general requirement for a contract to be in writing although most collective labour agreements do so. However, all part-time and fixed-term contracts must be in writing. Enterprises with 15 or more employees must recruit personnel from “protected categories” including widows, orphans, refugees  and disabled people.

Collective agreements regularly define minimum levels of wages and benefits and they usually provide 13 or 14 payment periods per year.

Working time

The average working day is 8 hours. Including overtime, the maximum working week is 48 hours over a reference period of a maximum of 4 months. Overtime cannot exceed 250 hours per year and the employer may incur administrative fines if this limit is not respected.

In Italy, there are 11 religious and national holidays. Everyone is granted 1 day of rest per week and an annual holiday period of 4 weeks.

Changes to the employment market  (Jobs Act)

The aim of the “Jobs Act” is to help create new jobs, reduce the cost of permanent employment and make the labour market more modern and competitive. The main developments in the Jobs Act are:

  • A new permanent employment

contract providing increasing levels  of protection to employees, as the length of time they work for an employer increases

  • Reduced social contributions on new hires for their first three years of employment. If the new employee was not a permanent employee for another employer for six months before recruitment, the employer benefits from exemption for social contributions of up to €8,060 per year.
  • Financial compensation for sacked workers rather than compulsory reinstatement.
  • Worker duty flexibility.
  • Simplification through reducing the number of contract types.
  • Unemployment benefits
  • Simplification of apprenticeship contracts.
  • Wider opportunities to use “work vouchers” to pay for casual jobs.

Termination of employment

When an employee is dismissed, for whatever reason, he is entitled to the following mandatory payments:

  • Severance Pay (“Trattamento di Fine Rapporto”): the amount is determined by dividing the annual gross salary by 13.5; severance pay is taxable but free of social security contributions.
  • Other Sums: this includes pay for unused holidays, allowances, and thirteenth and/or fourteenth monthly pay.
  • Notice Period: employees dismissed for reasons other than Just Cause are entitled to a notice period which depends on the type of employee and the length of the service.

Social security system

The Italian Social Security System, managed by INPS (“Istituto Nazionale Previdenza Sociale”), is compulsory and provides comprehensive benefits for all employees. Employees and employers jointly finance social security costs, which are based on gross earnings. Employers pay two thirds of contributions whilst employees pay the remaining third.

The compulsory state pension system in Italy is financed by social contributions paid by employers. The retirement age ranges from 60 to 66 years, although retirement is also allowed after 42 years  of contributions (41 for women).

It is possible to sign up for supplementary pension provision.

Latest version updated 31st October 2017

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