Italian 2027 Finance Draft Law (subject to Parliamentary debate and approval) – Key Tax Measures: Increase of middle tax band upper threshhold | Flat-tax Regime Forfettario threshold adjustments | Flat tax regime for employment income extended | New Exit Tax for individuals | "Bonus Casa" - real estate restructing relief extended to 2027 | Vehicle Tax Exemptions | Flat tax (Cedolare Secca) extended to commercial lettings | Fixed Rents for Under 36's | Introduction of Sugar and Plastic Taxes postponed to 1 July 2027 | Tax Credits For Cloud Software | Special bank and energy sector levies

Employment

8.1 Employment Contracts

Italian employment contracts must comply with national labor laws and collective bargaining agreements (CCNL). Contracts may be:

  • Permanent (tempo indeterminato) – Default form with full protections
  • Fixed-term (tempo determinato) – Allowed for specific projects or seasonal work
  • Apprenticeship (apprendistato) – Combines training with employment
  • Freelance/Consultant (collaborazione) – Used for independent contractors

Contracts must specify duties, compensation, working hours, and termination terms.

8.2 Working Hours and Leave

Standard working hours are 40 per week, with a legal maximum of 48 including overtime. Employees are entitled to:

  • At least 4 weeks of paid annual leave
  • 11 public holidays
  • Sick leave and maternity/paternity leave

Collective agreements may grant additional benefits or leave entitlements.

 

8.3 Social Security and Benefits

Employers must register with:

  • INPS – National social security agency
  • INAIL – Workplace injury insurance
  • Other institutions such as those managing supplementary pension  and unemployment benefit schemes, life and health insurance where applicable

Contributions cover pensions, unemployment, disability, and parental leave. Rates vary by sector and employee category.

For more information see this article

 

8.4 Termination and Severance

Termination must follow legal procedures and may require justification. Employees are entitled to:

  • Notice period (depends on assigned level within national collective bargaining agreements, can range from 15 days to several months)
  • Severance pay (Trattamento di Fine Rapporto or TFR)
  • Unemployment benefits if eligible

Unjustified dismissal may lead to reinstatement or compensation. Collective agreements often define additional rules.

If you have any questions, feel free to contact us.

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