Working as an employee full time in Italy
Liability of the employer to Italian social security
- under EU rules if you are a posted worker, or working and living in different EU countries);
- or under a specific treaty (e.g. the U.S./Italy social security treaty or the UK/Italy social security treaty for a limited time), depending on nationality, the facts and, sometimes, your choice.
Apart from pension and healthcare contributions employers need to make payment of premiums for insurance covering accidents at work.
Application of Italian employment law
You will need to evaluate whether Italian employment law applies to the work you will be doing as an employee in Italy – and especially whether TFR is due. Even if you decide to apply non Italian law to the contract of employment you need to be aware that certain mandatory terms of Italian employment law may apply anyway to the contract by operation of law. Examples of these terms are: the provisions governing minimum wage, minimum notice periods, maximum probation periods, maternity/paternity benefits, remuneration for sickness, remote-working, data protection and worked holidays.
Liability to withhold tax at source
The PE issue
Hiring through a staff agency or employer of record
Recent years have seen a growth in businesses – both at international and local level – offering to hire an Italian employee, manage all of the payroll, tax and social security compliance, recharging the cost with a mark-up. These businesses can offer a cost effective and flexible alternative to hiring an employee directly.
If you are thinking of hiring an employee in Italy, or moving someone who already works for you to Italy and would like to speak to a specialist, please click here.