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Italy Country Guide 2022

Italy

The Republic of Italy is a country in Southern Europe with stunning scenery, great weather and a fascinating history. People in Italy are very friendly and family-oriented, which makes it easy to integrate into the local culture; Italy also has great public transport, and education is of a high standard and very affirdable.

Italian healthcare is one of the best in the world, but public services can be difficult to navigate.

The job market is extremely competitive due to a high unemployment rate, so it can be difficult to secure a job as a foreigner, also considering the fact that knowledge of the Italian language is often a requirement. The cost of living can also be quite high in the main cities, however, smaller towns are much more affordable.

  • Capital: Rome
  • Spoken Languages: Italian
  • Currency: Euro (EUR)
  • Minimum monthly wage: N/A

Entry Visa

Citizens of EU/EFTA Member States and Switzerland can enter Italy with an identity card or a valid passport; other foreign citizens may enter with a valid Schengen visa.

Work Permit / Residence Permit

Citizens of EU/EFTA Member States and Switzerland can live and work without a work or residence permit in Italy. However, if they intend to stay for more than 3 months, then need to apply for a Residence Permit.

Other foreign nationals must obtain a Work Visa, and a Residence Permit. In order to obtain a work visa, the employer must first apply for a work permit. This can only be done during a few months every one or two years, depending in the job market, and Italy has a limit on the number of work permits that can be issued.

If the work permit is approved, the employee can apply for a work visa at the Italian Representation in their home country; the work visa allows the employee to enter Italy. Within 8 days of entering the country, the employee must apply for a Residence Permit at the local post office; after receiving this permit, the individual can live and work in Italy.

Social Security Registration

Individuals living and working in Italy need to apply for a Tax Code at the Revenue Agency; this code is required for paying social security contributions, opening bank accounts, signing leases and applying for the National Health Service (SSN)

Working Hours

A standard working week in Italy or 40 hours/week; overtime may not exceed an average of 48 hours per week. It is common to take long lunches (2 – 2.5 hours) and then work until late in the evening.

Public Holidays

  • 01 January (New Year’s Day)
  • 06 January (La Befana)
  • Easter Monday (Not a standard date, usually March/April)
  • 25 April (Liberation Day)
  • 01 May (Labour Day)
  • 02 June (Republic Day)
  • 15 August (Ferragosto)
  • 01 November (All Saint’s Day)
  • 08 December (Immaculate Conception Day)
  • 25 December (Christmas Day)
  • 26 December (St. Stephen’s Day)

There are also various regional holidays that are only celebrated in specific regions, and are not considered official public holidays.

Vacation Allowance

Employees in Italy are entitled to 26 days paid leave each year. Unused leave can be carried forward into the next year, but only until the end of June; after that, the unused leave must be compensated monetarily by the employer. Employees must also take at least two consecutive weeks of leave in each 18 month period.

Sick Leave

Employees in Italy are entitled to 3 fully paid sick days a year. If they get sick more than once in a year, the second leave is paid at a 66% rate for the 3 days, the third leave is paid at a 50% rate, and subsequent leaves are unpaid. If an employee is sick for more than 3 days at a time, after the 4th day they receive 75% of their regular pay, half of which is contributed by the government; this is provided the illness is legitimate and is backed by a medical certificate.

Maternity / Paternity leave

  • Maternity: 5 months (additional 12 weeks for multiple births): 2 months before expected date of delivery, 3 months after the birth. Employees receive 80% of their salary during the whole period from Social Security; employers may top up this amount up to 100%.
  • Paternity: 10 days within the first 5 months of birth, 100% paid. The mother may also transfer an extra day of their maternity leave to the father.

Termination & Severance

After termination of employment, there is no official severance pay; however, an employee is entitled to receive a TFR, which is a part of the workers’ wages that is calculated and and set aside by the employer, and then returned upon termination with interest. It is calculated according to the formula of a year’s overall salary / 13.5  (minus a 0.5% tax to be paid to social security), plus 1.5% for each year of service, plus inflation.

Notice Period

Notice periods in Italy are dependent on the collective agreement, and may vary based on seniority, staff level and the size of the company. On average, they range from 10 to 75 days, and can be as long as 180 days.

Social Security

Employee social security contributions are deducted automatically from the wage (provided the employer is registered with the Italian Social Security Administration (INPS)), while employer contributions are paid by the employers themselves. Approximately 33% of the total rate is paid into the National Pension Fund; the rest is paid to Unemployment, Sickness, Maternity and Social Mobility.

CategoryEmployer (%)Employee (%)
Social Insurance30%9,49%

The cap for social security contributions for employees registered with the INPS after January 1966 is EUR 105.014.

Pension

Pension in Italy is covered by social security contributions to the national Pension Fund, and foreigners that have accrued at least 20 years of contributions are also eligible.

Taxation

The Italian fiscal year runs from January 1 to December 31.

Tax Rates

The following progressive rates apply for 2022;

Taxable Income (EUR)Rate (%)
0 – 15,00023%
15,001 – 28,00025%
28,001 – 50,00035%
50,001 +43%

Tax Returns

The annual income tax return must be filed electronically by 30 September the following year.

Double Taxation

Italy has tax treaties with multiple other countries, which can reduce payable tax on certain incomes. It is also possible to obtain tax relief in either Italy or the individual’s home country to avoid double taxation on the same income.

Health Insurance

Italy’s public healthcare (SSN) is available to everyone who is a resident in Italy, and members of the EU; foreigners not from the EU are only eligible once their residency status has been finalized – before then, they must have a private health insurance.

Cost of Living

The cost of living in Italy is on the below average side. The estimated monthly cost for a single person is around EUR 1,400 – 1,600, with 750 – 850 going to rent.


How We Can Help

We provide a full set of services in Italy allowing corporate clients, recruitment agencies and professional contractors to operate in an optimal manner while ensuring that all local employment obligations are taken care of.

Access Financial offers the following solution in Italy:

  • Self-Employed

If you would like to discuss how Access Financial can help in Italy, please contact us.

Disclaimer

WE HAVE PREPARED THIS AS A GUIDE ONLY; IT DOES NOT FORM PART OF AN OFFER. PLEASE REQUEST ILLUSTRATIONS BASED ON YOUR SPECIFIC CASE FROM ONE OF OUR SOLUTION MANAGERS.